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Atlatsa narrows Q2 headline loss, restructure plan set for Q4 completion

14th August 2018

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

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JSE- and TSX-listed Atlatsa Resources’ headline basic and diluted loss a share narrowed to $0.04 in the second quarter, ended June 30, from $0.22 in the second quarter of 2017.

The company on Tuesday said this movement was based on the loss attributable to the shareholders of the company of $23.4-million, compared with the loss attributable to the shareholders of the company of $121.4-million in the same period last year.

Meanwhile, Rustenburg Platinum Mines (RPM) and Atlatsa anticipate that closing of the 2017 restructure plan will be completed during the fourth quarter of the year, with care-and-maintenance costs for the Bokoni mine, in the second quarter, having amounted to $11-million, equal to about R105.8-million.

Care-and-maintenance costs, Atlatsa explained, included shaft and plant maintenance costs, pumping to prevent flooding of working areas, safety inspections, as well as general and administrative expenses to safeguard to the Bokoni mine assets, located on the eastern limb of the Bushveld Complex.

Meanwhile, in April, Atlatsa had entered into a transaction cost facility agreement with RPM in terms of which RPM has, subject to an agreed budget and approval process, made available to Atlatsa a loan facility of $4.8-million, or about R50.3-million, for Atlatsa to fund transaction costs associated with the implementation of the 2017 restructure plan.

In June, an amendment to this facility was signed, increasing the budget and facility to $5-million, about R52.3-million.

Atlatsa’s total liabilities, at June 30, amounted to $380.5-million, equal to just over R3.9-billion, including drawdowns on the care-and-maintenance facility and the transaction costs facility.

BACKGROUND

Throughout this year, RPM and Atlatsa have continued to work towards the implementation of the 2017 restructure plan by fulfilling the terms and conditions as contemplated in the agreement.

Agreement terms stated that Atlatsa was to place the Bokoni mine on care and maintenance, where RPM would fund all costs associated with the process from August 1, 2017, until December 31, 2019.

RPM will then suspend the servicing and repayment of all the current and future debt owing by Atlatsa to RPM until December 31, 2019.

As a consequence, Atlatsa has restructured itself to reduce its corporate head office and associated overhead costs.

In October last year, Atlatsa entered into a care-and-maintenance term loan facility agreement with RPM, in terms of which RPM has, subject to an agreed budget and approval process, made a loan facility of $49.9-million, about R521-million, available to Atlatsa, for the duration of the care-and-maintenance period.

This will enable Atlatsa to fund its pro rata, or 51%, share of care-and-maintenance costs at Bokoni mine and the Atlatsa corporate restructure costs.

RPM has, since then, agreed to suspend servicing and repayment of all current and future debt incurred by Atlatsa and owing to RPM and its related entities until December 31, 2019.

During the financial restructure of Atlatsa, 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 $28.7-million, or about R300-million.

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.

Atlatsa and RPM will retain their 51% and 49% respective shareholdings in the Bokoni joint venture (JV).

Further, in November last year, Bokoni mine started treating ore for RPM from its Mototolo JV operations, based on a limited six-month ore sale agreement, which generated revenue of $1-million, about R10.4-million, for the Bokoni mine in the second quarter of 2018.

The balance of the revenue was generated from the last remaining ore sales from Bokoni mine to RPM.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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