northam platinum limited - this will soon be the new...

2

Northam Platinum Limited

3

• Listed on JSE since 1987. Admitted to JSE Social Responsibility Index in 2006

• Wholly owns and operates the Northam platinum mine. Finalised terms to acquire 100% of Booysendalplatinum project

• Set to increase resource base from 18Moz to 121Moz

• Only independent, fully integrated PGM producer with ownership of full beneficiation stream

• Strategic advantage as major BEE-controlled operator

Introducing Northam

4

• Twin shaft system, with mining depths of between 1,200 and 2,200m

• Two concentrators, smelter and base metals removal plant on site

• Access to independent precious metals refining

• Independent metals marketing to established global customer base

• Pioneered the low environmental impact hydro-powered mining methods in South Africa

• Patented, innovative metallurgical applications reduce chrome build-up and improve precious metals recovery

Capacity, infrastructure, expertise

5

Where we are

Everest

LimpopoN

Dwaalkop

Booysendal JV

Legendowned by Mvela

owned by Northam

6

Northam mine – quick overview

4.4Moz (4E)Produced to date

16 years*LOM

18.2 Moz*Resources

9.9 Moz*Reserves

R183 million*Capex

$584/oz*Cash costs

324 296oz (4E)*Production

2.27 Mt*Tons milled

1993First production

*Financial year 2007

Source BJM

7

Established track record

*After dividend distributions

8

UG2 increasingly important

2.5:1 2.2:1 2.0:1 1.6:1 1.4:1 1.4:1

Ratio %

9

… helped by the rhodium price

MERENSKY

UG2

Metal splits Revenue

R 377 000/kg

R 439 000/kg

Metal prices usedPt – $1 700 /ozPd – $370 /ozRh –$7 000 /ozAu - $820 /oz

10

Sustained growth in basket prices

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

Jul-0

6Aug

-06Sep

-06Oct-

06Nov

-06Dec

-06Ja

n-07

Feb-07

Mar-07

Apr-07

May-07

Jun-0

7Ju

l-07

Aug-07

Sep-07

Oct-07

Nov-07

Dec-07

Jan-0

8Feb

-08Mar-

08

US$

/oz

150 000

200 000

250 000

300 000

350 000

400 000

450 000

R/k

g

Basket Price (US$/oz) Basket Price (R/kg) Ave Basket H107 Ave Basket H207 Ave Basket H108

R304 494/kg

R264 866/kg

R291 547/kg

H2 2008 average (to date) – R398 517/kg

11

Northam in context

Northam

Company Reports, BJM Calculations, February 2008

Recovered yield: 6E g/t Pt g/t*

* Dec 2008

12

Northam in context

Company Reports, BJM Calculations, February 2008

Northam

Cash operating costs: R/oz Pt*

* Dec 2008

13

Northam in context

Northam

Total costs: 6E including capex*

* Dec 2008

14

Yet, constraints remain…

• Current life of mine of 16 years

• Limited production growth within Northam lease

• Risk associated with single operating asset

• Power and safety: potential impact on performance (23 days production lost in H1 2008)

• Current shareholding structure restricts corporate and management flexibility

15

Booysendal Transaction Overview

16

Transaction overview

• Mvela Resources acquiring, for R4 billion in cash, Anglo Platinum’s

• 50% interest in Booysendal

• entire interest of 53 million Northam shares

• Northam to acquire full ownership of Booysendal (100%) for 121 million new ordinary shares

• Mvela Resources to become controlling shareholder of Northam with 62.9% shareholding

The only, fully independent, black-owned and controlled, fully integrated PGE producer,

with substantial life

17

Shareholding - Fully BEE compliant

Current structure Resultant structure

Northam mine

Booysendal

MvelaHoldings

AfripalmResources

MvelaResources

Anglo Platinum

Northam

22.7% 19.1%

22.4%21.8%

100%

50%50%

Northam mine Booysendal

MvelaHoldings

AfripalmResources

MvelaResources

Northam

22.7% 19.1%

63.4%

100% 100%

Empowered

Empowerment

18

Key factors for Mvela Resources

4.31g/t (3PGE+Au)4.35g/t (3PGE+Au)

Control pipeline from mine to market – no value leakageValueControl of decision makingIndependentEstablished, technically competent managementExpertiseAlternative organic growth optionsGrowthUG2 Merensky

Grade: in situ

High platinum (ratio of 1.8:1 Pt:Pd)Prill splitDip 8° - 10° westSurface access

Quality

14.5 km strike lengthApprox 15 130 hectares103 million oz resource

Size

A new value proposition for Mvela Resources

19

Rationale for Mvela Resources

• Excellent fundamentals for the platinum sector:

• Positive outlook for PGM prices

• Sector previously identified for growth

• Size and quality of Booysendal resource – world class

• Technical and operational experience and stability of, Northam management – offer key competencies

• Fragmented nature of the junior PGM sector will continue to offer opportunities – provides platform for growth

2020

Time line to completion

Circular to shareholders March 2008

Shareholders’ meetings April 2008

Conclusion of transaction May 2008

2121

Why Booysendal?

22

What the transaction brings to Northam

• Larger asset base –significantly reducing risk profile

• Potential to at least double production

• Quality resource: 103 Moz (4E) ± 100 yrs LOM

• Reduction of average unit costs

• Control of fully independent beneficiation stream - mine to market

• Strategic advantage as major BEE-controlled operator Source: BJM

2323

Progress to date

Completed• Agreement reached with Anglo Platinum on

ancillary assets:• Electrical power (16MVA)• Water (7 Megalitres per day)• Tailings dam and rock dump waste sites (Der Brochen or

Booysendal)• Access to Booysendal (over Der Brochen)

• Competition Board approval obtainedOutstanding• CPR in progress – completion by begin Feb 2008• Shareholders’ approval – April 2008 IN PROGRESS

Ensuring the viability and sustainability of Booysendal

2424

Project context: the neighbourhood

Two Rivers

Mototolo

Eastplats

Eastplats - Sylvania

BooysendalEverest South

Der Brochen37km

14.5km

5 km

N

MRUG2

2525

Getting to know the project8km

14.5km

ConcentratorTailings

Roads,power& water

Projectboundary

UG2outcrop

Merenskyoutcrop

NSt George’s Fault

Der Brochen Valley

2626

Project context: completed drilling

Buttonshope51 JT

Draaikraal48 JT Sheep-

run50 JT

Uysedoorns47 JT

Pietersburg44 JT

Johannes-burg45 JT

Booysendal43 JT

Kliprivier73 JT

Der Brochen7 JT

Hebron5 JT

N

LegendUG2 OutcropMerensky OutcropBoreholes

0 4km

Initial target area7.5km

2727

Merensky & UG2 reefs

8kmUG2

Merensky

Land surface

Everest

Northern boundary

28

Indicative mine planning – initial target area

UG2stoping

UG2 decline systems

Merensky decline systems

1.5km

1.5km 7.5km

2km

Initial target area – 30 year life

28

2929

Conceptual capital forecasts

• Total estimated capex of R7.1 billion (excluding smelter capex of ±R1.2 billion) covers 30 year LOM for first phase

Mining54%

Concentrator28%

Tailings dams8%

Surface infrastructure

6%

Housing4%

3030

Capex underpinned by production build-up

0

500

1000

1500

2000

2500

3000

0

50

100

150

200

250

300

350

400

450

2009 2010 2011 2012 2013 2014

Build-up (ktpm) Initial Capex (R million)

ktpm R million

3131

Rapidly into production2008 2009 2010 2011 2012 2013 2014

Pre feasibility studyBankable feasibility study

Mining Decline 1 PortalMining

Decline 2 PortalMining




Concentrator Order MillsConstruction

Tailings Dams Construction

SurfaceInfrastructure

RoadsWaterElectricity

Housing

commission concentrator

production from underground

3232

Smelting and refining

• Possible R1 200 million for centralised smelting facility at Northam

• Base metal removal and nickel refining capacity

• Second DC ARC furnace to provide flexibility

• Opportunity to treat additional concentrate

• Long-term plan to expand the independent Heraeus refinery in Port Elizabeth

3333

Putting Booysendal in context

34

A great deal….

0

10

20

30

40

50

60

70

80

Xstrata

/Eland

Xstrata

/Eland

(incl.

Madi)

Wesizwe/A

frica W

ideAfrio

re / L

onmin

Afr.Pt /

Impla

tsS.Plat

/ Lon

minNHM/Boo

ysend

al

US$/4E oz Transaction cost – US$/resource oz

350

50

100

150

200

250

300

350

400

450

500

Attr

ibut

able

PG

M 4

E k

ozProject context: mineral resources

35

36

Project context: Mineral resourcesA

ttrib

utab

le P

GM

4E

koz

36

0

20

40

60

80

100

120

Smok

ey H

ills

Mar

eesb

urg

Gro

otbo

om

Pant

on

Gra

ss V

alle

y

Kalp

lats

De

Wild

t

Blue

Rid

ge

Aur

ora

Mot

otol

o

WBJ

V

Pila

nesb

erg

Dre

nthe

Ledi

g

M'Pha

tlel

e

Cro

c Ri

ver

Sedi

belo

Sheb

a

Mok

opan

e

Elan

d

Rooi

poor

t

Aka

nani

Tjat

e

Spitz/

KV

Ga

Phas

a

Leeu

wko

p

Booy

send

al

Lebo

wa

0

1

2

3

4

5

6

7

Moz gradeRBC research February 2008

Booysendal

37

Project context: Resource and value

37

NPV (size of 'bubble')

Caledonia

Nkwe

Aquarius

Northam

Eastplats Anooraq

Eland

Jubilee

Barrick

PlatAus

PTM

Ridge

Wesizwe

Platmin

PanPalladiumAIM

-1

0

1

2

3

4

5

6

7

-20 0 20 40 60 80 100 120 140

Attributable Resource (Moz PGM)

Ave

rage

PG

M y

ield

(g/t)

RBC research February 2008

38

Project context: Metal content

38

Project 4E % prill split

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

Sheb

a

Aur

ora

Rooi

poor

t

Mok

opan

e

Pant

on

Dre

nthe

Gra

ss V

alle

y

Ga

Phas

a

Aka

nani

Smok

ey H

ills

Tjat

e

Kalp

lats

Lebo

wa

M'P

hatlel

e

Sedi

belo

Mar

eesb

urg

Gro

otbo

om

Spitz/

KV

Booy

send

al

De

Wild

t

Leeu

wko

p

Mot

otol

o

Pila

nesb

erg

Blue

Rid

ge

Cro

c Ri

ver

Elan

d

WBJ

V

Ledi

g

Pt Pd Rh AuRBC research February 2008

Booysendal Pt content similar to w Limb projects

39

Project context: Depth

39

Average project depth (metres)

-1,600

-1,400

-1,200

-1,000

-800

-600

-400

-200

0

Aka

nani

Leeu

wko

p Tj

ate

Blue

Rid

geLe

dig

WBJ

VEl

and

Pant

on

Gro

otbo

omRo

oipo

ort

Spit

z/KV

Ga

Phas

a

Lebo

wa

Cro

c Ri

ver

Sedi

belo

M'P

hatl

ele

Sheb

aD

e W

ildt

Booy

send

alPi

lane

sber

g

Aur

ora

Kalp

lats

Dre

nthe

Gra

ssSm

okey

Hill

s

Mar

eesb

urg

Mot

otol

o

Mok

opan

e

Booysendal


40

Project context: Relative capex and production

40

PGM ounce per annum per USD of Capex

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

Dre

nthe

/

Mar

eesb

urg

M'P

hatlel

e

Elan

dsfo

ntei

n

Kala

hari P

latinu

m

Ga

Phas

a

Smok

ey H

ills

Sedi

belo

Pila

nesb

erg

Cro

codi

le R

iver

Pant

on

Gra

ss V

alle

y

Leeu

wko

p

Aur

ora

De

Wild

t

Ledi

g Fr

isch

Spitzk

op/K

enVa

le

Aka

nani

WBJ

V

Mok

opan

e

Blue

Rid

ge

Rooi

poor

t

Sheb

a's Ri

dge

Tjat

e

Booy

send

al

Gro

otbo

om

Mot

otol

o

PGM

oz

Booysendal


41

Project context: Sensitivity

41

% Change in NPV for a 20% change in the platinum price

00.10.20.30.40.50.60.70.80.9

1

Mok

opan

eR

ooip

oort

Dre

nthe

Pant

onK

alpl

ats

Boo

ysen

dal

Ledi

g Fr

isch

Lebo

wa

Pila

nesb

erg

De

Wild

tG

rass

Mot

otol

oTj

ate

Aka

nani

Ga

Phas

haEl

and

Aur

ora

Leeu

wko

pSe

dibe

loW

BJV

Blu

eRid

geSp

itz/K

VM

'Pha

tlele

Gro

otbo

omSh

eba'

sM

aree

sbur

gC

rocR

iver

Smok

ey

Rooipoort and Makopane well over 100%

Based on our estimates for Booysendal, it also seems to be very highly geared to the platinum price


42

Bringing Northam down the cost curve

Northam‘New’NorthamBooysendal

43

Indicative Phase 1 NPV table1

4 1733 7593 3472 9342 5152 094NPV @ 15.0% (Rmillion)

6 0995 5745 0494 5243 9943 461NPV @ 12.5% (Rmillion)

8 8948 2117 5296 8476 1595 468NPV @ 10.0% (R million)

13 04612 13511 22410 3139 3978 478NPV @ 7.5% (R million)

8.007.757.507.257.006.75ZAR/US$ Exchange Rate

1 Illustrative values based on preliminary technical scoping studies – subject to change pending completion of pre feasibility and bankable feasibility study.

Phase 1 mine – 30 years and ± 15% of resource

Note: LT prices used: Pt 1 500. Pd 350, Rh 5 000, Au 550, Ni 16 000, Cu 3500Capex R8.250bn (includes R1.2 billion for smelter, but no assumed revenue from smelter)Opex R372/tonne (average including smelting and refining costs)

44

Relative per ounce values of listed juniors

53.624025 398554.8299.7313.423Wesizwe

63.194741 77560.49829.343.745PTM

46.113465 88693.08963.2317.020Platmin

30.0022513 946532.27126.2061.990Eastern Platinum

12.83962 03090.72822.3721.093Ridge

15.891191 013155.1506.538.501Nkwe

24.181814 891148.22033.0026.967Anooraq

Value per PGE(4)oz $ (at 7.50)

Value/oz (R)

Market Capitalization

(Rm)

No. of shares (M)

Share Price (R)

Weighted Attributable

PGE(4) Moz *Company

At $10/oz remaining Booysendal resource worth over $800 million

45

Key points

• Additional area secured for Booysendal – extended outcrop on strike

• Power - 16MVA from Mototolo JV until Booysendalsubstation built (dependent on ESKOM)

• Water – 7Ml/day from existing Lebalelo Pipeline, thereafter allocation from De Hoop Dam

• Tailings – potential sites identified on Booysendal, additional assessment on Der Brochen underway

• Access – possible access over Der Brochen to north or Schaapkraal to east

46

Key points, cont’d

• Conceptual throughput of 400ktpm from up to five decline systems

• Conceptual capex of R7.1 billion secures life of up to 30 years

• Possible expansion of smelting facility at Northam –additional revenue stream?

• Significant growth potential risk diversification and value accretion

4747

Corporate Information

48

Northam Platinum Limited

56%Free float

PlatinumSector

92%Liquidity (% of free float mkt cap 12m)

NHMJSE Share code

R60.80 (US$7.81)Share price

238.38Shares in issue (m) #R14,494 (US$1,863m)Market Capitalisation (m)

Market Statistics*

*JSE market closing price – 21 February 2008Rand/US$ R7.78 Website: www.northam.co.za

Rene Rautenbach: [email protected]

Damian Smith: [email protected]

49

Mvelaphanda Resources Limited

66%Free float

General MiningSector

81%Liquidity (% free float mkt cap 12m)

MVLJSE Share code

R52.10 (US$6.70)Share price

209.08Shares in issue (m) #R11,186 (US$1,438m)Market Capitalisation (m)

Market Statistics*

*JSE market closing price – 21 February 2008Rand/US$ R7.78 Website: www.mvelares.co.za

James Wellsted: [email protected]

northam platinum limited - this will soon be the new...

Documents