Royal Bafokeng Platinum Limited (RBPlat or the Company) today announced its results for the year ended 31 December 2011. Good progress was made against its strategic objectives and a steady operational performance was achieved, despite considerable challenges that characterised the year for the company and the sector as a whole.
Key features for the year:
RBPlat Chief Executive Officer, Steve Phiri, stressed that although the current economic climate remains challenging, the company’s outlook remains positive. “Nobody in the sector would deny that it has been a difficult year, and we have experienced our fair share of those challenges. But we have learnt from them, and have managed to achieve some significant performance achievements in the face of these difficult conditions. Safety, recovery, efficiency… these were important areas of improvement during the year and I am proud of our team for the effort it took to achieve them.”
Looking to the year ahead, Mr Phiri anticipates that market conditions will remain difficult. “Reducing operating costs will constitute a core focus in 2012, particularly as we see ourselves through this economic climate. In terms of progress on our longer-term project development, we remain confident about our Styldrift I Project and we are looking forward to intersecting the Merensky reef towards the end of 2012.”
Extensive safety stoppages in the first and fourth quarters in particular made it difficult for the platinum industry to achieve production targets. Despite these safety stoppages, the safety performance has been excellent with no fatal injuries incurred in 2011, a 10% improvement in the lost time injury frequency rate and a 12.1% improvement in the serious injury frequency rate year on year. By year end, RBPlat had achieved 1.8 million fatality-free shifts and it was with great sadness that post year end, the Company reported a fatal fall of ground accident at Bafokeng Rasimone Platinum Mine (BRPM). We remain committed to our goal of zero harm and will work closely with the Department of Mineral Resources (DMR) to ensure a safe working environment for all our employees.
These safety stoppages, a contractor strike of nine days, unusually high labour turnover and the failure in the third quarter of our North shaft Phase II decline conveyor, all contributed to lower tonnages mined, with a total of 2 284 000 tonnes delivered to the concentrator, and to the 2.2% reduction in 4E concentrate produced at 281 598 ounces. The lower volumes and rising net costs, in particular the increases in labour and electricity costs, contributed to a 10.7% and 8.4% increase in cash costs to R782/tonne and R6 399 per 4E ounce respectively.
On the positive side, there were improvements in concentrator recovery levels, which finished at a weighted average of 87.47%. Our full-time employee stoping teams worked with improved efficiency of 11.6%, reaching 310m² per crew per month. Run-of-mine Merensky grade also increased by 3% to 4.44g/t (4E), which allowed us to increase our 4E built up headgrade from 4.31 to 4.35g/t. Good progress was also made on the Phase I and Phase II replacement projects at BRPM, both of which remained on schedule and under budget. Styldrift I also remains on course to save R1 billion on completion with declared savings to date of R323 million.
Finally, significant improvements were realised on the shaft sinking rates at Styldrift, which caught up after a slow start at the beginning of the year to achieve the anticipated shaft advance rates. The main shaft reached 219m and the service shaft, 152m by year end.
Revenue increased by 41.2% year on year, as a result of the change in control and basis of accounting during 2010, which contributed 39.1% of this increase. Actual BRPM revenue of 2.1% was responsible for the remainder of the increase.
Headline earnings remained relatively flat at R273.7 million for 2011, compared to R270.2 million for 2010, reflecting a full consolidation of the BRPM results. Headline earnings per share fell 12.6% from 191 cents per share to 167 cents per share.
Downward pressure remained hard on PGM prices throughout the year as a result of continuing global economic uncertainty. The first half of 2011 was dominated by the devastating earthquake and subsequent tsunami in Japan and in the second half, any hope of cementing the initial recovery in the platinum market was dispelled as the depth of the European debt crisis was exposed. Europe accounts for approximately half of industrial platinum demand, so as the region once again entered recession the platinum price, which had temporarily lifted to almost US$1 900/oz at the end of August, settled at just below US$1 400/oz by year-end. While the basket price for PGMs improved by 4.7% in nominal terms, other inflationary pressures and production interruptions meant that in real terms, RBPlat’s PGM basket price and our margins contracted in 2011.
RBPlat will host a results presentation to discuss these annual results today, 28 February 2012, at 10:00 Central African Time (CAT) at the JSE Auditorium. A conference call facility will be available, with the following call-in details:
|Johannesburg, South Africa||10:00 (local time)||Toll||+27 11 535 3600|
|Johannesburg, South Africa alternate||Toll||+27 10 201 6616|
|Cape Town, South Africa||Toll||+27 21 819 0900|
|South Africa||Toll-free||+27 800 200 648|
|United Kingdom||08:00 (local time)||Toll-free||+44 800 917 7042|
|International||Toll||+27 11 535 3600|
|International alternate||Toll||+27 10 201 6616|
The results presentation will be available to download from the company’s website, www.bafokengplatinum.co.za, at 09:30 (CAT) and a webcast of the live presentation will be accessible at results.antfarm.co.za/royal/february_2012_01/.
A playback facility will also be available following the live presentation.
|South Africa||Code 20106#||Toll +27 11 305 2030|
|Australia||Code 20106#||Toll-Free +61 1 800 091 250|
|United Kingdom||Code 20106#||Toll-Free +44 808 234 6771|
|Other countries||Code 20106#||Intl Toll +27 11 305 2030|
For further enquiries, please contact:
Royal Bafokeng Platinum Limited
Investor Relations Manager
Tel: +27 (0)10 590 4517
Mobile: +27 (0)82 920 7803
The information presented in this media release is of a general nature and the forward looking information, opinions and beliefs of the Company and its affiliates are based on various market related assumptions. Changes in market circumstances after the production of the information may impact on the accuracy thereof. No assurance can therefore be given as to the accuracy of any information after publication.
Before relying on the information, investors or potential investors should carefully evaluate the accuracy, completeness and relevance of the information and should preferably obtain professional relevant advice.
The Company, its directors, officers, managers or employees, advisers or representatives accept no responsibility or liability whatsoever for any loss howsoever arising from any use of this media release or its contents or otherwise arising in connection with this media release.
This media release also includes market share and industry data obtained by the Company from industry publications and surveys and the Company does not have access to the facts and assumptions underlying the numerical data, market data and other information extracted from publicly available sources. As a result, the Company is unable to verify such numerical data, market data and other information. The Company assumes no responsibility for the correctness of any market share or industry data included in the materials and media release.
Royal Bafokeng Platinum
No 1 Monte Casino Boulevard
Block C , Floor 4
Tel: +27 (0) 10 590 4517
Fax:+27 (0) 86 219 5131
Mobile: +27 (0) 82 920 7803
A compelling platinum investment (PDF - 3.7MB)