SOURCE: African Platinum PLC

September 15, 2006 08:55 ET

African Platinum plc announces Preliminary Results

London -- (MARKET WIRE) -- September 15, 2006 -- African Platinum plc

Ticker: APP

Index: AIM

Sector: Platinum and precious metals


African Platinum plc ("the company") announces its preliminary results for the year ended 31 March 2006.


* Definitive feasibility study confirms Leeuwkop as one of the most attractive
development opportunities on Bushveld Complex.
* Resource now 92 million ounces, making the Greater Leeuwkop Project one of top
four PGM resource bases in South Africa.
* Significant progress in Black Economic Empowerment (BEE) negotiations and
securing of new order rights.


Since the publication of our last annual report, your company has made significant advances on all fronts, and our vision of building it into one of the world's premier platinum businesses has become an increasingly tangible reality.

The highlights of this busy period were:
* The completion of a definitive feasibility study on our flagship Leeuwkop
project, which provided confirmation that this is indeed one of the most
attractive development opportunities on the Bushveld Complex.
* A resource update on the adjacent Imbasa and Inkosi properties, which
increased the 4E mineral resource in the Greater Leeuwkop Project to 92 million
ounces. Afplats and its BEE partners are now ranked fourth in terms of its
platinum group metals resources in Southern Africa (behind the majors Anglo
Platinum, Impala and Lonmin), and has a published resource base which is
significantly larger than those of its junior peers.
* Significant progress in negotiations with our prospective black economic
empowerment partners and in securing the appropriate mining and prospecting
* The further strengthening of our management team through the appointment of an
international PGM authority, Dr Jock Harmer, as exploration manager.
* The marshalling of a formidable support team, including SRK as independent
engineers, Rand Merchant Bank as advisor on the structure and funding of the
Leeuwkop project and JPMorgan Cazenove as nominated advisor and broker.
* The groundwork has been advanced to raise the necessary funds for the
development of the first phase of the Leeuwkop project, which is planned to be a
low-cost mine producing some 300 000 ounces of 4E per year by 2011.
* The appointment of Shaft Sinkers as the preferred tenderer for the development
of the Leeuwkop Phase 1 twin shaft system and the signing of an agreement with
Impala Refining Services (IRS), the world's largest purchaser of PGM concentrate
for the sale of 10 years of Leeuwkop's production.


These developments took place against the backdrop of a market which continued to be characterised by strong positive fundamentals and robust demand for all PGMs.

The platinum and rhodium markets experienced supply deficits and the palladium market experienced a surplus for the fifth year in a row. Metal prices were well supported, with the 2005 basket price averaging US$803/oz, up 20% on the previous year. The best performer for the year was rhodium, which increased by 114% to an average of US$2 031/oz.

Platinum production and demand are forecast to grow in 2006, with the current marginal deficit remaining. The expected growth in production is dependent on South African expansion programmes ramping up as planned. Beyond 2006 demand is likely to remain strong, albeit that the price-sensitive jewellery market will continue to soften the positive impact of the burgeoning industrial and automotive sectors. The further tightening of emission regulations in the developed world, and the introduction of such regulations in developing regions, will underpin demand in the automotive sector.

Palladium supply is expected to increase on the back of the South African expansion programmes. The overhang from Russian stockpiles - without which palladium would have been in deficit in 2005 - remains a significant factor in the market.

Although rhodium represents only 10% of the metal in the Leeuwkop concentrate, its high price makes it a major revenue driver. We expect supply to increase in line with the other metals, but at the same time demand will be driven upward by a combination of rising consumption in the automotive sector and the glass industry, specifically in Asia where there has been a rapid expansion of LCD glass manufacturing capacity.


In the relatively short time since its admission to trading on the AIM market of the London Stock Exchange, Afplats has grown rapidly from an entrepreneurial start-up venture into a business of real substance which is on the brink of developing its first mine.

In a market which is very buoyant and likely to remain so for the foreseeable future, the company's exceptional asset base, prime location, enormous expansion potential and clear, practicable business strategy have placed it at the forefront of the new generation of platinum juniors. Our ultimate aim is to elevate it to the top of the mid-tier level of the PGM companies - an ambition which is clearly within our reach.

While much has been achieved, much more remains to be done. Management's focus now is on completing the project finance structure and raising the development capital, settling the BEE partnerships and securing all the required rights.

In the year ahead, we plan to start the main development of Leeuwkop Phase 1 and to complete a scoping study of the expansion potential along strike of the Greater Leeuwkop Project, encompassing the Imbasa and Inkosi properties. Exploration within this area as well as elsewhere in Africa will continue.

In April this year, the company advised shareholders that it had withdrawn its application for a listing on the American Stock Exchange. After giving this matter a great deal of consideration, the board concluded that the effort and expense involved in such a listing could not be justified at a time when our small management team and limited resources were fully focused on the development of Leeuwkop. It is worth noting that none of the platinum majors has a US listing and that most of our North American shareholders are in any event able to trade on AIM. In consultation with our advisors, the board continues to review an overseas listing and related opportunities to complement the London listing.


At an extraordinary general meeting on 25 July 2006, shareholders voted to remove the then chairman Charles Hansard as a director of the company. Dr Mark Bristow resigned as an independent non-executive director. Following that meeting I accepted appointment as chairman, on the basis that I would hold office until an external candidate for the role was identified and appointed.

On behalf of the board I thank Charles and Mark for the considerable contributions they made to Afplats at a critical stage of its development. I should like to express my appreciation to my colleagues for their counsel and support during what has been a challenging time for the board and the company. I should also like to express the board's appreciation to chief executive Roy Pitchford and his team for the substantial progress the company has made.

Brian Moritz


15 September 2006

CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 March 2006

£000                                                    2006    2005
TURNOVER                                                 -       -
Net operating expenses                                  (3 398) (2 213)
Impairment of acquisition, exploration and 
   development                                  Note 4  (4 310)      -
OPERATING LOSS                                          (7 708) (2 213)
Interest receivable                                     632     452
Taxation on loss on ordinary activities                  -       -
Minority interests                                       -       13
LOSS FOR THE FINANCIAL YEAR                             (7 076) (1 748)
Basic and diluted                                       (1.71p) (0.54p)
The operating loss for the year arises from the group's continuing operations. There were no differences between reported profits and losses and historical cost profits and losses on ordinary activities before taxation.


£000                                                    2006    2005
Loss for the financial year                              (7 076) (1 748)
Foreign currency translation adjustments relating 
    to subsidiary                                        914     (79)
Total recognised gains and losses for the year           (6 162) (1 827)

at 31 March 2006

£000                                                   2006        2005
Intangible assets                                      12 762      9 951
Tangible assets                                        154         123
Investments                                            307         307
                                                       13 223      10 381
Debtors                                                309         521
Cash at bank and in hand and on deposit                11 050      17 718
                                                       11 359      18 239
CREDITORS: Amounts falling due within one year         (1 225)     (1 210)
NET CURRENT ASSETS                                     10 134      17 029
NET ASSETS                                             23 357      27 410
Called up share capital                                435         395
Share premium account                                  31 452      29 458
Other reserves                                         131         56
Profit and loss account                                (8 661)     (2 499)
EQUITY SHAREHOLDERS' FUNDS                             23 357      27 410

for the year ended 31 March 2006
£000                                                     2006     2005
Cash outflow from operating activities                   (3 063)  (1 942)
Returns on investments and servicing of finance          632      452
Capital expenditure and financial investment             (5 492)  (4 034)
Acquisitions and disposals                               (19)     (43)
   AND FINANCING                                         (7 942)  (5 567)
Management of liquid resources                           15 154   (13 765)
Financing                                                1 274    20 788
INCREASE IN CASH IN THE YEAR                             8 486    1 456

Increase in cash in the year                             8 486    1 456
Cash inflow/outflow from decrease/increase in liquid     (15 154) 13 765
NET FUNDS AT 1 APRIL 2005                                17 718   2 497
NET FUNDS AT 31 MARCH 2006                               11 050   17 718

NOTES 1. Basis of Accounting - The financial statements have been prepared under the historical cost convention and in accordance with applicable United Kingdom accounting standards.

2. Basis of Consolidation - The consolidated financial statements incorporate those of African Platinum plc and all its subsidiary undertakings. Subsidiaries acquired during the year are consolidated using the acquisition method. The difference between the cost of acquisition of shares in subsidiaries and the fair value of the separable net assets acquired is capitalised and written off on a straight-line basis over its estimated economic life. Provision is made for impairment. All financial statements are made up to 31 March 2006.

3. The calculation of basic loss per share is based on the loss attributable to ordinary shareholders £7 076 000 (2005: £1 748 000) divided by the weighted average number of shares in issue during the year 413 913 629 (2005: 318 465 750)

4. Two impairment charges have been made to the intangible assets in 2006 that amount to £4 310 000. These charges comprise a write-down of the intangibles relating to the Tau Mining Limited investment (£4 025 000) and Mimic (Private) Limited investment (£285 000) where it was decided to suspend further exploration on these prospects to focus attention on the main South African Bushveld project.

5. No dividend has been declared for the period or in the previous year.

6. See the company's Annual Report for the year ended 31 March 2006 for a full set of notes to these accounts, including details of additional policies and post balance sheet events. The report will be available to download from 30 September 2006 at

7. The financial information set out above does not constitute the company's statutory accounts for the years ended 31 March 2006 or 2005. Statutory accounts for 2005 have been delivered to the registrar of companies, and those for 2006 will be delivered in due course. The auditors have reported on those accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 237 (2) or (3) of the Companies Act 1985.


The company intends to publish and distribute its Annual Report for the year ended 31 March 2006 by 30 September 2006. Notice convening the AGM will be sent out separately later in the year.

The accounts, which will be posted on 30 September 2006 on the company's website at for viewing and downloading, will contain more detailed analysis of the work undertaken by the company during the period, a report on the company's project and Ore Reserves and Mineral Resources, comprehensive notes to the accounts and list post-balance sheet events.


Kathy du Plessis, Investor and Media Relations

Tel +27 (0) 11 728 4701, Fax: +27 (0) 11 728 2547, E-mail:

DISCLAIMER: Investing in all equities, including natural resources-related equities carries risks which should be taken into consideration when making an investment. This announcement contains forward-looking statements regarding African Platinum plc, including the development of its mining development projects. Actual results relating to any and all of these subjects may differ materially from those presented.


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