JOHANNESBURG (miningweekly.com) – JSE-listed Northam Platinum has narrowed its loss to R226.6-million for the six months to December 31, compared with a loss of R273-million in the six months to December 31, 2015.

Revenue rose 7.9% year-on-year to R3.5-billion, owing to a 19.1% increase in the revenue per platinum ounce sold and a 3.2% weaker rand/dollar exchange rate, which was offset by a 9.8% year-on-year decrease in sales volumes to 223 705 oz.

The lower sales volumes were attributed to metallurgical constraints and an 18-day outage resulting from a mill bearing failure on the UG2 concentrator at Northam’s Zondereinde operation.
 

Northam’s operating profit increased to R352-million, from R93.4-million in the prior comparable period.
The company’s Booysendal mine achieved a good growth performance during the period, with a production run rate of 100 000 platinum group metals (PGM) ounces significantly exceeding the mine’s nameplate capacity.

“Both the deepening project on the UG2 mine and work on the Booysendal South mine continued apace,” CEO Paul Dunne said on Friday.

The first blast for the boxcut at Booysendal South was completed in early September 2016 and the mining contract has recently been awarded, with underground operations to start in March.

The Merensky module at Booysendal North is now complete and producing at 25 000 t/m.

“This has been a busy half-year for both the group and its operating divisions with prepayments made on the aerial rope conveyor infrastructure for Booysendal South of R157.9-million, capital expenditure amounting to R773-million and the acquisition of Zambezi preference shares for R208.7-million,” he noted.

He added that the company’s cash balance stood at R2.2-billion, and its financial position remained robust.

“Northam is well positioned to benefit from an upswing in metal prices.”

Both tonnages and production ounces were affected at Zondereinde owing to operational reorganisation measures underground.

“We remain optimistic that a rise in prices, although gradual, cannot be avoided, given the anticipated rise in demand, even in a conservative global growth climate, and the supply side constraints expected from South African producers in the next few years,” he stated.

He pointed out that over time, the acquisition of contiguous resources at Zondereinde mine from Anglo American Platinum will restore the balance of Merensky ore to the Zondereinde mining mix, driving high-margin production growth.

The development of Booysendal South continues with a relatively modest capital programme and small footprint.

“This brownfields expansion will deliver 250 000 PGM ounces per year at steady state…expanding Northam’s metallurgical processing capacity is a critical feature of our growth strategy,” he stated.

He said that construction work on the dryer and furnace at Zondereinde continues.
 
“In addition to our brownfields growth strategy, we continue to look for external opportunities.”