Sterling performance for RBPlat in first reporting year
RBPlat Chief Executive, Steve Phiri said, “We are pleased to have established a robust operating platform in 2010 that will support our strategic objective of business growth through operational excellence.”
Key features for the year
- PGM (4E) concentrate production increased by 7% to 288,100 ounces
- Tonnes milled increased by 12% to 2,407,000 tonnes
- Unit costs remained steady at R707/t milled; cash operating costs per platinum and PGM ounce up by only 5%
- RBPlat revenues improved to R2,1 billion on the back of a 29% actual increase in BRPM revenues as a result of stronger metal prices and increased production
- RBPlat’s strong operational cashflows – R777 million generated, with cash and cash investments of R1,15 billion
- BRPM’s capex of R967 million fully funded from cash flows generated by operations – Styldrift on schedule and within budget
- Highly successful listing, raising R2,98 billion from local and international investors of which R1 billion was new injection of capital into RBPlat
Commenting on the year’s results, Steve Phiri said, “The 2010 financial year has been one of extraordinary achievement for RBPlat. In assuming operational control of BRPM in January, we transformed from being a partner in a mining venture to being fully responsible for performance. Our employees have risen to the challenge”.
“Increased tonnages and steady cost control are a credit to BRPM management, and were achieved against a background of increased potential risk during the transition from Anglo Platinum.
“The listing of RBPlat is remarkable in a number of ways. It is the first time that there has been a community-driven initial public offering (IPO) of a Company on the JSE in which the community not only has a controlling shareholding, but also operational control. RBPlat will continue to target the sustainable use of mineral resources in pursuit of an ambitious socio-economic development agenda.”
Operating and financial results
RBPlat’s first year of operational control at BRPM was focused on securing a steady transition with little disruption to the ongoing operations and capital projects. The operational strategy implemented aimed to optimise throughput and revenue and identify and take advantage of cost reduction opportunities. Tonnes milled increased by 12% to 2,407,000 tonnes and 4E ounces produced also increased by 7% to 288,100 PGM ounces. This advancement was driven by improved stoping crew efficiency and ore transport capacity. The reduction in 4E head grade by 4.6% to 4.31g/t is an area of concern and factors contributing to the decline include a reduction in geological block grades and inadequate stoping width control. These are aggressively being addressed.
Operating on-mine cash costs remained steady at R707/t milled (2009: R704/t milled) although the on-mine cash cost per platinum ounce delivered rose by R447, a 5% increase to R9,076, a reflection of the disappointing head grade recovered. A cost optimisation strategy was implemented in the third quarter of 2010 with specific attention placed on labour efficiencies, drill and blast designs and practices, as well as procurement processes. The benefits of this strategy will start to bear fruit in 2011.
Sales revenues increased to R2,1 billion, reflecting the change in control and basis of accounting during 2010, with the actual increase in revenue at BRPM of 29%.
RBPlat’s profit for the year attributable to owners of the Company was R3,2 billion, resulting in R22.43 earnings per share for the period.This includes a once off profit on remeasurement of the previously held interest in BRPM of R2,9 billion. RBPlat’s headline earnings for the year were R271,7 million resulting in headline earnings per share of R1.92. Based on its current business plan, the Company does not intend to declare a dividend until 2017 at the earliest, with operational cash flow reinvested into ongoing capital expenditure requirements.
Capital expenditure, including stay-in-business, replacement and expansion capital expenditure at BRPM, amounted to R967 million for the year (2009: R754 million). Pleasingly, all capital expenditure has been funded from cash flows generated by the operations. Due to the accelerated development of the Styldrift 1 Merensky project, total capital for BRPM is anticipated to increase significantly in 2011. RBPlat’s cash and cash investments at year end amounted to R1,15 billion.
The safety performance at BRPM has been mixed for the period under review, with the lost-time injury frequency rate (LTIFR) improving to 1.0 (2009: 1.2). However, it is with great regret that BRPM reports three fatalities during the year. We remain uncompromising in our commitment to safety and our vision ‘Safety and People First’ will continue to underpin this strategy.
The Styldrift project continued to progress well through 2010 and is currently on budget and ahead of schedule. The bulk earthworks and bulk site infrastructure constructions have been completed and the sinking of the main and service shafts has begun. The power supply agreement for Styldrift has been accepted by Eskom and permanent power supply is planned for 2014.
RBPlat successfully listed on the JSE Limited on 8 November 2010, trading under the share code RBP. The listing floated 30.3% of the Company’s share capital, with the balance held by Royal Bafokeng Holdings (RBH) (57.1%) and Anglo Platinum (12.6%) respectively. The strongly subscribed listing raised R2,89 billion of which R1 billion was a new injection of capital into RBPlat and the balance to RBH and Anglo Platinum. The share has traded steadily in a band around R65.00 per share since listing at R60.50 per share.
2010 has been a year of successful transition, and continued consolidation of BRPM’s operational performance will form the cornerstone of 2011’s strategy. RBPlat’s healthy financial position and organic growth opportunities aligned with cash generative operations should position the Company favourably in a forecasted deficit PGM market environment.
For further enquiries, please contact:
Royal Bafokeng Platinum Limited
Investor Relations Manager
Tel: +27 (0)11 530 8056
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.
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