Platinum group metals (PGMs)  Northam Platinum produced 571 843 oz of equivalent refined six-element (6E) PGMs for the financial year ended June 30 – a 4.5% increase on the 546 984 oz produced in the 2017 financial year.

Production was supported by strong operational performance at the company’s Zondereinde mine, in Limpopo, which increased production by 7% year-on-year to 348 888 oz of equivalent refined 6E.

However, at Booysendal, also in Limpopo, Northam reported that mine output was adversely affected by a work stoppage in May, when it changed from a contract mining model to an owner mining model, achieving metal-in-concentrate production of 229 275 oz 6E, compared with 239 643 oz 6E in the prior comparable period, which represents a 4.5% decrease in production.

With the company’s mining capacity exceeding its processing capacity before and during the reporting period, there is now an inventory build-up.

The bulk of the excess inventory, which is estimated at 170 000 oz, is expected to be processed through the expanded smelter complex in the 2019 financial year.

The value of excess inventory at year-end amounted to R2.1-billion, with an estimated sales value of R2.5-billion.

Meanwhile, Northam’s growth, diversification and optimisation strategy is on track, with progress being made in the development of the Booysendal South mine and at Zondereinde, the successful commissioning of the second 20 MW furnace, and with the acquisition of growth assets.

The growth assets include the Western block resource adjacent to the Zondereinde mine for R1-billion, Eland mine for R175-million and US-based recycling assets, which amounted to R3.8-billion.

FINANCIALS

Both Zondereinde and Booysendal recorded healthy cash margins in the reporting period, despite difficult market conditions and higher operating costs.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) are expected to increase to about R1.1-billion, compared with R967-million in the prior comparable period.

Northam expects to report normalised headline earnings of about R420-million, compared with R398-million in the prior comparable period.

The miner’s financial results will be published on or around September 7.