Northam Platinum Holdings Limited · JSE:NPH
Northam Platinum — HSBC Conference, Sandton 2015
21 slides from Northam Platinum's conference presentation, Nov 19, 2015
Slide 1: Northam Platinum HSBC Conference
NORTHAM PLATINUM LIMITED HSBC CONFERENCE SANDTON 19 NOVEMBER 2015
Slide 2: Disclaimer
Disclaimer Certain statements in this presentation (other than the statements of historical fact) may contain forward-looking statements regarding Northam’s operations, economic performance or financial condition, including, without limitation, those concerning the economic outlook for the platinum
Slide 3: Northam – who we are
Northam – who we are • Only mid-tier, integrated PGM producer • full control of metal from mine to market • Fully empowered with 35.4% HDSA holding secured for 10 years • Strong balance sheet • Diverse operating assets • Booysendal North – shallow, modern and mechanised, ramping up to steady state 1
Slide 4: Northam – asset portfolio
Northam – asset portfolio Zondereinde mine 100% & metallurgical processing Resource: 81.1Moz 100% Booysendal mine Resource: 102.3Moz 100% Northam Chrome Producers Cr2O3 concentrate 100% Booysendal South (Everest) Resource: 3.1Moz 7.5% Pandora Attributable resource: 2.1Moz 50% Dwaalkop Attributable r
Slide 5: 2015 – key developments
2015 – key developments • Heraeus partnership secures investment in new smelter • Booysendal ramping up to steady state • Labour risk mitigated – three year wage deal • Unit costs well contained • F2015 operating profit recovers to R596 million • Group production higher at 378 070oz • Landmark HDSA
Slide 6: Five year impression
Five year impression Sales revenue (ZAR billion) PGMs sold (oz) 7 450 000 422 630 6.0 400 000 6 5.3 344 128 350 000 315 941 320 861 317 392 5 4.2 300 000 4 3.7 3.6 250 000 3 200 000 150 000 2 100 000 1 50 000 0 0 2015 2014 2013 2012 2011 2015 2014 2013 2012 2011 Capital expenditure (ZAR million) 1 8
Slide 7: Two-pronged strategy
Two-pronged strategy • Internal operational optimisation • Zondereinde • increasing LoM and further exploiting UG2 • metallurgical processing - leveraging advantages and reducing risks • Booysendal • continued ramp-up • improving concentrator recoveries • evaluate growth opportunities • Evaluating e
Slide 8: Zondereinde − established producer
Zondereinde − established producer • Zondereinde – mature, reliable and long-life operation • twin shaft system • mining both Merensky and UG2, producing ~280 000oz 4E annually • highest average grades in the industry • pioneers of low environmental impact hydropowered mining technology • 20 year Lo
Slide 9: Zondereinde − internal optimisation
Zondereinde − internal optimisation • Zondereinde – unlocking the value • deepening project on track • infrastructure suite to provide good quality Merensky reef • underground refrigeration plant on 13 level installed to improve environmental conditions underground • shifting the mining mix to UG265
Slide 10: Booysendal North − modern, mechanised
Booysendal North − modern, mechanised • Booysendal UG2 North – shallow, mechanised, scaleable • infrastructure completed for steady state production • UG2 reef initial target • shallow ounces, surface outcrop • 2016 capex of R363 million (R113m stay in business; R250m project capex) • excellent safe
Slide 11: Booysendal − internal optimisation
Booysendal − internal optimisation • Booysendal Merensky expansion • pre-feasibility to determine viability of mechanised Merensky reef mining • bulk sample and trial mining to be completed by Dec 2015 • potential for 75 000 additional 4E oz per annum at a capital cost of R800 million • potential mo
Slide 12: External expansion − Everest
External expansion − Everest • Booysendal South (Everest) • acquisition cost of R450 million • surface infrastructure includes: • 250ktpm concentrator • tailings facilities • water allocation • power allocation • offices and workshops • target mining area is Booysendal South orebody containing some
Slide 13: Leveraging our smelting capacity
Leveraging our smelting capacity • Integrated metals processing • two concentrators, smelter, base metals removal on site at Zondereinde • patented, innovative metallurgical applications reduce chrome build-up and improve precious metals recovery • long-standing partnership with Heraeus for precious
Slide 14: BEE transaction − main features
BEE transaction − main features • Landmark R6.6 billion BEE equity transaction • Effective net 35.4% HDSA ownership (including the Toro Trust) • R4 billion net cash injection to fund growth aspirations • 10-year security of HDSA ownership, ensuring Mining Charter compliance • Immediate economic valu
Slide 15: BEE transaction − structure
BEE transaction − structure TRANSACTION STRUCTURE New ordinary shares issued: 112.1 million BEE representation: 22.0% Value: R4.6 billion BEE SPV (US$418 million) Total shares: 159.8 million Existing ordinary shares: BEE representation: 31.4% 47.7 million Value: R6.6 billion BEE representation: 9.4%
Slide 16: BEE transaction − structure (cont)
BEE transaction − structure (cont) Total HDSA interest = 35.4% BEE SPV Toro Trust 31.4% effective 4.0% Strategic Employees Communities HDSA women partners 3.0% 5.0% 6.0% 17.4% Khomelela Atisa Booysendal Employee Trust Women’s Consortium Community Trust Consortium 4.0% Malundi Zondereinde Consortium
Slide 17: BEE − final structure
BEE − final structure R4 billion (US$364 million) net cash injection Back-up guarantee provided by Northam 31.4% 4% 35.4% HDSA Toro Trust effective shareholding credits HDSA ownership Preference shares BEE SPV Other Preference 100% of HDSA SPV’s shareholders ordinary shares HDSA participants HSBC Co
Slide 18: Mining in SA − risk factors
Mining in SA − risk factors • Labour relations and inter-union rivalry • Legislative environment • mineral rights and security of tenure • Mining Charter review • Mining input costs • Education and skills void • Community concerns HSBC Conference, Sandton | 19 November 2015 18
Slide 19: Investment case
Investment case • Energetic and competent leadership • Innovative technology • Solid operating platform • Large resource base • Optionality at Booysendal • Empowerment credentials in place • Strong balance sheet • Well-positioned for industry consolidation HSBC Conference, Sandton | 19 November 2015
Slide 20: Shareholder information
Shareholder information • JSE listing since 1987 • Share code: NHM • Admitted to the Socially Responsible Investment Index since 2006 • Shares in issue: 509 781 212 (Jun 2015) • Market cap of R15.8 billion (US$1.15 billion) (Nov 2015) HSBC Conference, Sandton | 19 November 2015 20
Slide 21: Contact details
Contact details 1st Floor, 1A Albury Park Magalieszicht Avenue Dunkeld West Johannesburg 2196 South Africa New registered office (Effective 1 January 2016) Building 4, 1st floor Maxwell Office Park Magwa Crescent West Waterfall City Shareholder information Jukskei View 2090 Name Northam Platinum Lim