JOHANNESBURG, May 15, 2018 /CNW/ - Atlatsa Resources
Corporation ("Atlatsa" or the "Company") (TSX: ATL;
JSE: ATL) announces its operating and financial results for the
quarter ended March 31, 2018. This
release should be read together with the Company's unaudited
condensed consolidated interim financial statements for the three
months ended March 31, 2018 (the
"Consolidated Financial Statements") and the related
Management's Discussion and Analysis of Financial Condition and
Results of Operations filed on http:///www.sedar.com, which are
also available at www.atlatsa.com. Currency values are presented in
South African Rand (ZAR), Canadian Dollars ($) and United States
Dollars (US$).
The 2017 Restructure Plan
On July 21, 2017, the Company
announced that it had entered into an agreement
("Agreement") with Rustenburg Platinum Mines Limited
("RPM"), a subsidiary of Anglo American Platinum Limited,
outlining key terms agreed in relation to a two-phased restructure
plan (collectively, the "2017 Restructure Plan"),
comprising:
- a care and maintenance strategy for Bokoni Mine; and
- a financial restructure plan for Atlatsa and its subsidiaries
("Atlatsa Group").
The salient terms of the Agreement are as follows:
Bokoni Mine care and maintenance:
- Atlatsa was to place the Bokoni Mine on care and
maintenance;
- RPM will fund all costs associated with the care and
maintenance process ("Care and Maintenance Funding") from
August 1, 2017 up until December 31, 2019 ("Care and Maintenance
Period"); and
- RPM will suspend the servicing and repayment of all the current
and future debt owing by Atlatsa Group to RPM until December 31, 2019 ("Debt
Standstill").
Financial restructure of the Atlatsa Group:
- RPM will acquire and include into its adjacent Northern Limb
mining rights the resources specified in Atlatsa's Kwanda North and Central Block prospecting
rights, for a cash consideration of $32.6
million (ZAR300 million)
("Asset Disposal").
- Subject to implementation of the Asset Disposal, RPM will write
off all debt owing by Atlatsa Group to RPM, including debt incurred
during the Care and Maintenance Period ("Debt Write
Off").
- Atlatsa and RPM will retain their 51% and 49% respective
shareholdings in the Bokoni joint venture.
Implementation of the 2017 Restructure Plan
Bokoni Mine care and maintenance
The Bokoni Mine was placed on care and maintenance on
October 1, 2017. The process entailed
the following:
- ceasing all production related activities;
- completion of a Section 189A retrenchment process at the Bokoni
Mine; and
- appointment of a care and maintenance team to execute the care
and maintenance strategy at Bokoni Mine.
During the Care and Maintenance Period, Atlatsa and RPM will
review various alternatives in respect of Bokoni Mine's future
sustainability and, depending on future circumstances, reconsider
its care and maintenance status.
Care and Maintenance Funding and Debt Standstill
RPM has funded all once-off costs associated with placing Bokoni
Mine on care and maintenance, as well as ongoing care and
maintenance costs up until December 31,
2019. As a consequence, Atlatsa has restructured itself to
reduce its corporate head office and associated overhead costs
("Atlatsa Corporate Restructure").
On October 12, 2017, the Atlatsa
Group entered into a Care and Maintenance Term Loan Facility
Agreement with RPM ("Care and Maintenance Facility") in
terms of which RPM has, subject to an agreed budget and approval
process, made available to the Atlatsa Group a loan facility in an
amount of $56.7 million (ZAR521 million) for the duration of the Care and
Maintenance Period to enable the Atlatsa Group to fund its pro
rata (51%) share of care and maintenance costs at Bokoni Mine
and the Atlatsa Corporate Restructure costs.
RPM has agreed to suspend servicing and repayment of all current
and future debt incurred by the Atlatsa Group and owing to RPM and
its related entities until December 31,
2019 ("Debt Standstill Period"). Upon implementation
of the Asset Disposal, all debt incurred during the Debt Standstill
Period will be written off, in accordance with the Debt Write
Off.
Transaction Costs Facility
On April 16, 2018 Atlatsa Group
entered into a Transaction Cost Facility Agreement with RPM
("Transaction Costs Facility") in terms of which RPM has,
subject to an agreed budget and approval process, made available to
the Atlatsa Group a loan facility in an amount of $5.4 million (ZAR50
million) for Atlatsa Group to fund transaction costs
associated with the implementation of the 2017 Restructure Plan. To
date an amount of $1.04 million
(ZAR9.6 million) has been advanced by
RPM to the Atlatsa Group in terms of this agreement.
The Atlatsa Group's total liabilities as at March 31, 2018 were equal to $412.0 million
(ZAR3,786 million), including
drawdowns on the Care and Maintenance Facility and Transaction
Costs Facility.
Debt Write Off conditional on Asset Disposal
Atlatsa does not have short-term plans to develop the resources
at its Central Block and Kwanda
North prospecting rights. These prospecting rights border
the north of RPM's Northern Limb operations. The incorporation of
these prospecting rights into RPM's operations will increase the
probability of their development, which could lead to potential
future mining and employment opportunities, contributing to the
regional and national South African economy.
As stated above, the Agreement provides for both the Asset
Disposal and the Debt Write Off. Atlatsa and RPM continue to work
towards this. Implementation of such transactions remain subject to
completion of definitive transaction agreements, all required
regulatory approvals and all required corporate approvals,
including the approval of Atlatsa shareholders.
Should the Asset Disposal be implemented, RPM will, inter
alia, implement the Debt Write Off, which will reduce the
Atlatsa Group's debt owing to RPM to zero.
Update on 2017 Restructure Plan
During 2018, RPM and Atlatsa will continue to work towards
implementation of the 2017 Restructure Plan by fulfilling the terms
and conditions as contemplated in the Agreement.
Financial Results – Quarter ended March 31, 2018 ("Q1") 2018
Set out below are summaries of key financial results for the
Atlatsa Group for the quarter ended March
31, 2018.
Financial results
– Atlatsa
|
Expressed in Canadian
Dollars (000's)
|
Q1
2018
|
Q1
2017
|
%
change
|
Revenue
|
4,032
|
38,360
|
-89%
|
Cost of
sales
|
(4,019)
|
(54,058)
|
-93%
|
Gross profit
(loss)
|
13
|
(15,698)
|
-99%
|
General,
administrative and other expenses
|
(2,063)
|
(5,626)
|
-63%
|
Care and maintenance
costs
|
(16,594)
|
-
|
n/a
|
Other
income
|
2
|
3
|
-33%
|
Operating
loss
|
(18,642)
|
(21,321)
|
-13%
|
Net finance
costs
|
(17,905)
|
(6,795)
|
164%
|
Income tax
|
-
|
427
|
-100%
|
Loss for the
period
|
(36,547)
|
(27,689)
|
32%
|
Loss attributable to
Atlatsa shareholders
|
(26,237)
|
(17,505)
|
50%
|
Basic loss per share
– cents
|
(5)
|
(3)
|
67%
|
Headline loss per
share – cents*
|
(5)
|
(3)
|
67%
|
*
Headline loss per share is not a
recognised measure under IFRS and should not be construed as an
alternative to basic earnings or loss determined in accordance with
IFRS as an indicator of the financial performance of Atlatsa. It is
an additional earnings number used as a way of dividing the IFRS
reported profit between re-measurements that are more closely
aligned to the operating / trading activities of the entity, and
the platform used to create those results. The starting point is
basic earnings excluding "separately identifiable re-measurements"
(as defined in Circular 2/2015 issued by the South African
Institute of Chartered Accountants), net of related tax (both
current and deferred) and related non-controlling interest other
than re-measurements specifically included in headline earnings
("included re-measurements", as defined).
|
Financial results
In November 2017, Bokoni Mine
started treating ore for RPM from its Mototolo joint venture
operations, based on a limited six-month ore sale agreement. This
agreement generated revenue of $4.0
million (ZAR38.1 million) for
Bokoni Mine during Q1 2018.
Care and maintenance costs for Q1 2018 were $16.6 million (ZAR156.9
million). Care and maintenance costs include shafts and
plant maintenance costs, pumping to prevent flooding of working
areas, safety inspections as well as general and administrative
expenses necessary to safeguard the Bokoni Mine assets.
Loss per share
The basic and diluted loss per
share was $0.05 for Q1 2018 compared
to $0.03 in Q1 2017. The basic and
diluted loss per share is based on the loss attributable to the
shareholders of the Company of $26.2
million compared to the loss attributable to the
shareholders of the Company of $17.5
million in Q1 2017.
Reconciliation of headline loss attributable to Atlatsa
shareholders
Expressed in Canadian
Dollars (000's)
|
Q1
2018
|
Q1
2017
|
Loss attributable to
Atlatsa shareholders
|
(26,237)
|
(17,505)
|
Adjustments:
|
|
|
Impairment
loss
|
-
|
-
|
Loss on disposal of
property, plant and equipment
|
-
|
109
|
Total tax effects of
adjustments
|
-
|
(30)
|
Total non-controlling
interest effects of adjustments
|
-
|
-
|
Headline loss
attributable to Atlatsa shareholders
|
(26,237)
|
(17,426)
|
The basic and diluted headline loss per share was $0.05 for Q1 2018 compared to $0.03 in Q1 2017. The basic and diluted headline
loss per share based on the headline loss attributable to the
shareholders of the Company for Q1 2018 is $26.2 million, compared to a headline loss of
$17.4 million for Q1 2017.
Issued share capital
As at March 31, 2018 Atlatsa had
554,421,806 issued and outstanding common shares.
Queries:
On behalf of Atlatsa
Joel
Kesler
Chief Commercial Officer
Office: +27 11 779 6800
Email: Joel@atlatsa.com
JSE Sponsor:
One Capital Sponsor Services
Proprietary Limited
Taryn
Carter
Office: +27 11 550 5000
Email: sponsor@onecapital.co.za
Cautionary note regarding forward-looking
information
This document contains "forward-looking statements" within the
meaning of the applicable Canadian securities laws, that are based
on Atlatsa's estimates and projections as of the dates as of which
those statements are made, including statements relating to
anticipated financial or operational performance. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology including without limitation,
statements relating to potential acquisitions and/or disposals,
future production, reserve potential, exploration drilling,
exploitation activities and events or developments that Atlatsa
expects such statements appear in a number of different places in
this document and can be identified by words such as "anticipate",
"estimate", "project", "expect", "intend", "believe", "plan",
"forecasts", "predicts", "schedule", "forecast", "predict", "will",
"could", "may", or their negatives or other comparable words. Such
forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause Atlatsa's actual
results, performance or achievements to be materially different
from any future results, performance or achievements that may be
expressed or implied by such forward-looking statements.
Atlatsa believes that such forward-looking statements are based
on material factors and reasonable assumptions, including the
following assumptions: placing the Bokoni Mine on care and
maintenance; safe guarding of all assets and the maintenance of
major equipment; implementing the terms of the Letter Agreement and
Debt Standstill as contemplated in the 2017 Restructure Plan; and
meeting the conditions precedent of the 2017 Restructure Plan.
Forward-looking statements, however, are not guarantees of
future performance and actual results or developments may differ
materially from those projected in forward-looking statements.
Factors that could cause actual results to differ materially from
those in forward looking statements include: uncertainties related
to placing the Bokoni Mine on care and maintenance; uncertainties
related to the implementation of the 2017 Restructure Plan;
uncertainties related to meeting the conditions precedent of the
2017 Restructure Plan; changes in and the effect of government
policies with respect to mining and natural resource exploration
and exploitation; continued availability of capital and financing;
general economic, market or business conditions; failure of plant,
equipment or processes to maintain the Bokoni Mine on care and
maintenance; labour disputes, industrial unrest and strikes;
political instability; suspension of operations and damage to
mining property as a result of community unrest and safety
incidents; insurrection or war; the effect of HIV/AIDS on labour
force availability and turnover; delays in obtaining government
approvals; and the Company's ability to satisfy the terms and
conditions of the loans and borrowings, as described under "Going
Concern" in Note 2 of the unaudited condensed consolidated interim
financial statements for quarter ended March
31, 2018. These factors and other risk factors that could
cause actual results to differ materially from those in
forward-looking statements are described in further detail under
"Description of Business - Risk Factors" in Atlatsa's Annual
Information Form for Fiscal 2017, which is available on SEDAR at
www.sedar.com.
Atlatsa advises investors that these cautionary remarks
expressly qualify in their entirety all forward-looking statements
attributable to Atlatsa or persons acting on its behalf. Atlatsa
assumes no obligation to update its forward-looking statements to
reflect actual results, changes in assumptions or changes in other
factors affecting such statements, except as required by law.
Investors should carefully review the cautionary notes and risk
factors contained in this document and other documents that Atlatsa
files from time to time with, or furnishes to; Canadian securities
regulators and which are available on SEDAR at www.sedar.com.
SOURCE Atlatsa Resources Corporation