Review of operating activities and capital expenditure in response to prevailing market conditions
The Company is of the view that current market conditions are likely to prevail for the remainder of the year and going into 2013, and has therefore decided in this first phase of the Review to introduce the following cash preservation measures:
- Deferment of exploration drilling at BRPM and Styldrift II
This includes drilling at Bafokeng Rasimone Platinum Mine’s (“BRPM”) North shaft as part of the Phase III replacement project, which is scheduled to be completed by August 2017, and drilling at the Styldrift II project. This deferment will not impact on the completion of studies for Styldrift II, with the pre-feasibility still scheduled for completion by the end of 2014. A total amount of R71.7 million planned for the 2012 and 2013 financial years will be deferred.
- Deferment of construction of a chairlift at BRPM’s South shaft
An amount of R20.5 million has been spent on this project to date. Construction of the chairlift at North shaft will proceed as planned. An amount of R90.7 million planned for the remainder of the 2012 financial year and the whole of 2013 is estimated to be deferred.
- Deferment of BRPM concentrator upgrade
Plans to upgrade the existing BRPM concentrator have been deferred. The upgraded BRPM concentrator facility with a capacity increase from 200,000tpm to 230,000tpm was scheduled to come on-stream by the end of 2013. The additional capacity would have enabled the treatment of ore comprising up to 30% UG2, from the current limit of 8% UG2. The existing arrangement to treat ore comprising in excess of 8% UG2 at Anglo Platinum’s Waterval concentrator remains in place. Approximately R300 million of the amount planned to be spent during the 2012 and 2013 financial years will be deferred.
RBPlat will continue to review capital and other expenditure and to optimise operations while at the same time avoiding any material impact on production and the long-term sustainability of operations. The Company remains confident that long-term fundamental demand for PGMs remains in place, supporting its long-term growth objectives.
21 June 2012
Macquarie First South Capital (Pty) Limited
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