Platmin loss widens to $11.1m

[] — PLATINUM junior Platmin, which is developing mines in South Africa, reported the widening of its loss to $11.1m for the 10 months to end December 2009 from $9.8m for the year to end February 2009.

The consolidated financial statements are for a period of 10 months, ending December 2009 after the company changed its financial year end from end February
to end December.

A loss of 0.02 US cents per share was reported for the period to end December 2009, compared to a profit of 0.04 cents a share for the period to end February 2009.

These losses arose from costs associated with building-up operations at Pilanesberg
Platinum Mines (PPM) that were not capitalised and from other corporate overheads.

As at end December, the project capital expenditure for the development of PPM
had accumulated to $407.8m (R3.0bn).

This total includes concentrator capital expenditure of $264.6m, capitalised pre-production mining costs of $172.6m and an offset of revenue from metal sales during the pre-production phase of $29.4m.

Capital expenditure required to complete the construction phase is estimated at
$16.4m, bringing the total projected capital expenditure to $424.2m.

There were about $16.4m in existing development commitments for completion of the Pilanesberg projects PPM as at end December 2009.

The company is dependent on the successful completion of PPM to generate cash flows to fund its operations and pay debt as it becomes due.

Platmin raised $59.4m in capital by way of a private placement during May 2009 and had $29.4m in cash and cash equivalents at end December to fund development activities and meet its contractual obligations.

“The build up to full capacity at PPM continues, with increased exposure of reef expected to translate into higher production shortly,” said Platmin CEO Tom Dale.

“Subject to the normal uncertainties associated with mine planning during the start-
up of a new mine, we expect to reach an annualised production rate of 160 000 ounces of 3PGE+Au during FY2010, and the targeted annualised production rate of 250 000 ounces per annum early in 2011,” Dale said.

In the ten-month period Platmin dispatched and sold 27 685 (3PGE+Au) ounces,
earning revenue of $29.4m.

The 3PGE+Au basket price received was $1 096/oz (R8 629/oz at an average
exchange rate of R7.91 equivalent to $1.00).

Subsequent to the year end, a subsidiary of Platmin entered into a R191m promissory note facility with Pallinghurst Resources and it later executed a subscription agreement with Temasek Holdings for the issuance of a $100m non-interest bearing secured convertible debenture.

The company also announced that it intended to retain agents for a potential global
equity offering to raise up to an additional $250m.

At 16:50 shares in Platmin were unchanged at R10.20 on the JSE.