Northam Platinum Holdings Limited · JSE:NPH
Northam Platinum — FY2008 Earnings Presentation
34 slides from Northam Platinum's earnings presentation, Aug 25, 2008
Slide 1: Annual Results Presentation 25 August 2008
Slide 2: A year of fundamental change
A year of fundamental change • Booysendal transaction consummated, growth path secured • size – 103Moz, 14.5km strike length • access from surface, with shallower growth prospects • lower quartile cost profile • Northam mine continues to generate strong cash flows • Offtake agreement signed with Pil
Slide 3: Simplified corporate structure
Simplified corporate structure • Strategic alignment with major shareholder Mvela Afripalm Holdings Resources • New structure creates 19.4% 30.7% corporate flexibility Mvela Resources • BEE credentials firmly in place 62.8% Northam Northam Booysendal mine 3
Slide 4: Taking empowerment to the workplace
Taking empowerment to the workplace • EETF (Employee empowerment trust fund) • extensive consultation process with all unions • 4% of after tax profits allocated to trust • first payout after five years • beneficiaries protected from share price volatility R 000s Af After tax profits fi 4
Slide 5: Safety review
Safety review Annual injury rates per 200 000 man hours LTIIR (p (per 200 000 man hours)) RIIR (p (per 200 000 man hours)) 5
Slide 6: Positive performance in tough operating year
Positive performance in tough operating year • 12.6% increase in after tax profits to R1.5 billion • 12.0% increase in headline earnings to 627 cents per share • Cash on hand of R1.5 billion • Final dividend of 185 cps (330 cps for the year) • Strong balance sheet – no gearing R 000s C hb Cash balan
Slide 7: Operating performance
Operating performance F2008 F2007 Change Total development metres 12 732 14 822 -14.1% Merensky square metres 205 251 249 812 -17.8% Merensky head grade (g/t) 5.6 5.6 - UG2 square metres 158 294 146 698 7.9% UG2 head grade (g/t) 4.4 4.4 - Total square metres mined 363 545 396 510 - 8.3% Total tonnes
Slide 8: Merensky / UG2 production ratio
Merensky / UG2 production ratio 2.5:1 2.2:1 2.0:1 1.6:1 1.4:1 1.1:1 8
Slide 9: Mining operations – optimising the ore reserves
Mining operations – optimising the ore reserves eastern transition zone possible normal reef 41 20 LJD 37 9
Slide 10: Key focus on metallurgical operations
Key focus on metallurgical operations • UG2 plant modifications • installation of HPGR crusher • improved throughput • reduced p power consumption p • convert rod mill to ball mill • better grind • Overall effect: • better recoveries, lower operating costs • Smelter shutdown in October /November • d
Slide 11: Income statement
Income statement F2008 F2007 Change (R000) (R000) Sales revenue 3 886 137 3 739 805 3.9% Cost of sales 1 608 648 1 727 945 -6.9% Operating profit 2 277 489 2 011 860 13.2% Investment income 97 507 83 643 15.0% Net sundry y income 1 824 5 287 -65.5% Booysendal expenditure (17 969) - Profit before tax
Slide 12: Sales volumes
Sales volumes F2008 F2007 Change (kg) (kg) Platinum 5 275 6 609 -20.2% Palladium 2 523 3 013 -16.3% Rhodium 643 877 -26.7% Gold 146 204 -28.4% T t l (3PGE+Au) Total (3PGE+A ) 8 586 10 702 -19.8% 19 8% Ruthenium 1 059 1 046 1.2% Iridium 208 270 -23.0% 23.0% Copper (tonnes) 573 733 -21.8% Nickel (tonn
Slide 13: Revenue contributions
Revenue contributions 100% = — = a 7 oll 60% 6 6 40% 20% 0% 7 T T F2001 2002 2003 F204 F2005 F2006 F2007 F2008 80% @ Platinum Palladium mRhedium mGod ~ Nickel m Other 13
Slide 14: Cost of sales
Cost of sales 2008 2007 Change (R000) (R000) Cost of sales 1 608 648 1 727 945 (6.9%) Operating costs 1 626 610 1 360 818 19.5% Concentrates purchased - 106 447 Refining and realisation 75 540 91 816 (17.7%) D Depreciation i i 149 32 325 129 040 1 % 15.7% Change in metal stocks (242 827) 39 824 (709
Slide 15: Unit cash costs
Unit cash costs F2008 F2007 Change R d / ttonne mined Rand i d 683 37 683.37 526 00 526.00 29 9% 29.9% Rand / tonne milled 789.34 601.19 31.3% Rand / kilogram (3PGE+Au) 175 197 135 248 29.5% produced 15
Slide 16: Unit cash costs
Unit cash costs R/kg (3PGE+Au) PPI 16
Slide 17: Capital expenditure
Capital expenditure Actual F2008 F2009 R million R million Deepening project 68.8 106.0 Metallurgical plants 32.7 65.5 Access infrastructure to 1 level 21.2 3.5 Ventilation - 12.0 Development 18.9 20.2 Backfill reticulation 11.0 13.2 Underground equipment 23.1 13.9 Power management g 15.8 11.0 Emplo
Slide 18: Annual Results Presentation August 2008
Annual ResulfsPreshatition 25 August 2008
Slide 19: Metal prices
Metal prices 11 000 $ 2 276/oz 2 000 10 000 $ 10 100/oz 9 000 1 600 8 000 Pt, Pd, Au Rhodium 1 200 7 000 $ 1 023/oz 6 000 800 $ 588/oz 5 000 400 4 000 0 3 000 07 08 07 08 06 M 7 07 M 8 D 6 M 7 S 7 D 7 M 8 08 07 07 08 08 06 07 07 7 8 0 0 0 0 0 0 0 l0 l0 ay ay ar ar ug ug pr pr n n n n ov ov b b ct ct
Slide 20: Basket price US$/oz
Basket price 2 300 700 000 2 100 600 000 1 900 1 700 500 000 R 501 285/kg 1 500 R 467 300/kg US$/oz R/kg 400 000 1 300 R 409 159/kg 1 100 300 000 R 291 547/kg R 304 494/kg 900 200 000 700 500 100 000 07 08 07 07 7 08 08 8 07 7 07 7 7 08 8 08 7 07 08 07 08 l-0 l-0 -0 -0 -0 -0 -0 p- p- - - n- n- n- n-
Slide 21: F2008: robust metal demand
F2008: robust metal demand F2008 • Increased autocat demand Pt • diesel vehicles, particulate filters, after treatment applications 54% • Growth in industrial applications • electrical, electronic, glass, petroleum refining • Further support for ETFs • Increased autocat demand Pd • new vehicles and
Slide 22: Outlook remains sound
Outlook remains sound • Recent slump in prices – negative autocat sentiment, disinvestment • global decrease in vehicle sales appears inevitable • recycling, thrifting and substitution to continue • but but, sell off in speculative positions on TOCOM and NYMEX as well as in ETFs appears to have ende
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Slide 24: To recap – locality
To recap – locality 1A 1B 1D 1C 14.5km 24 24
Slide 25: To recap – Booysendal brings to Northam
To recap – Booysendal brings to Northam • Larger, more diverse asset base - significantly reducing risk profile • Potential to at least double production • Mineral resource ± 100 yrs LOM • Ph Phase 1 mine i only l extracts t t 15% off orebody b d over 30 years • Reduction of average unit costs • Con
Slide 26: Where are we now…
Where are we now… • Transaction concluded • Established project team in place • Application for mining authorization lodged • P f Pre-feasibility ibilit review i complete l t • Baseline environmental studies updated • Bankable feasibility study underway • Site establishment planning underway 26
Slide 27: Pre-feasibility review complete
Pre-feasibility review complete • Objectives of the three month review: • consolidate and review prior studies • review geology and mineral resources • investigate mining method and production options • determine principal project elements: • metallurgy • bulk infrastructure, engineering, access and
Slide 28: Pre-feasibility review findings
Pre-feasibility review findings • Eleven production scenarios ranging in scale from 120ktm to 480ktm considered and based on: • 120ktm production modules • standalone Merensky reef mine • standalone UG2 reef mine y reef production • combinations of UG2 and Merensky p • Review results suggest: • UG2
Slide 29: Setting the scene
Setting the scene NORTH 2KM MR North Decline UG2 North Decline 8KM MR South Decline UG2 South Decline UG2 Outcrop p MR O Outcrop t 29
Slide 30: Bankable feasibility study
Bankable feasibility study • Experienced project team • 25 members with combined experience of over 500 years • Duration 12 to 15 months – expect to be complete during H2 2009 • Budget R50 million 30
Slide 31: Key issues for F2009
Key issues for F2009 • Northam mine • wage negotiations • deepening project • implementing EETF • Booysendal project • complete BFS • construction to start in 2010 • p Corporate • evaluate optimal Booysendal funding mechanism • strengthen offshore shareholder base • explore potential for further cor
Slide 32: Northam – growth you can count on
Northam – growth you can count on • Track record of consistent delivery to shareholders • Experienced PGM mine operators • Cash generative and ungeared • Near-term expansion through acquisition of world-class asset • Processing solutions for emerging producers • Further value unlocking opportunities
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Slide 34: Sales revenue
Sales revenue 2008 2007 Change g (R000) (R000) Platinum 2 093 212 1 837 462 13.9% Palladium 239 379 238 849 0.2% Rhodium 1 151 946 1 074 565 7.2% Gold 28 662 30 826 -7.0% Total (3PGE (3PGE+Au) Au) 3 513 199 3 181 702 10.4% Ruthenium 105 123 87 308 20.4% Iridium 21 427 25 221 15.0% C Copper 30 769 36