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Northam declares cash dividend, boosts self-generation

Paul Dunne

Paul Dunne

Photo by Creamer Media

1st March 2024

By: Martin Creamer

Creamer Media Editor

     

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JOHANNESBURG (miningweekly.com) – Johannesburg Stock Exchange-listed mining company Northam Platinum on Friday declared a cash interim dividend after reporting strong performance from all group operations in the six months to the end of December.

Northam’s sale last year of its investment in Royal Bafokeng Platinum strengthened the company’s balance sheet and liquidity significantly with cash on hand and available undrawn banking facilities collectively amounting to R22.8-billion at year-end.

With cash and cash equivalents of R11.8-billion and available undrawn banking facilities of R11-billion, Northam declared a cash dividend of 100c a share.

Cost control measures in the period kept the increase in group unit cash cost per equivalent refined four element (4E) ounce at 6.7% amid a 10.6% increase in equivalent refined 4E ounce metal from its own operations to 434 977 oz of 4E platinum group metals (PGMs) for the six-month period.

In a release to Mining Weekly, Northam CEO Paul Dunne noted the depressed PGM prices and high inflation that the PGMs industry is having to navigate, together with the raft of global geopolitical uncertainties and electricity curtailments.

“We’ve not yet seen a change in fundamentals which are likely to move the market into more positive territory, and consequently, the short-term outlook remains challenging,” Dunne added.

He is anticipating that the depressed pricing environment will continue over the next 12 to 24 months, placing significant pressure on earnings and cash generation across the PGMs mining sector.

“Preservation and prudent management of liquidity is now of utmost importance to ensure the sustainability of our operations as we focus on protecting the interests of our shareholders and the broader stakeholder base,” Dunne pointed out.

Owing to Eskom load curtailment, Northam is continuing to install self-generation capacity with a mix of renewable energy initiatives as well as 22 MW of existing diesel generation and an additional 35 MW being purchased and installed, with commissioning expected before the end of the third quarter.

“This additional capacity will enable all operations to operate unimpeded under level 4 Eskom load curtailment conditions, which is equivalent to stage 6 loadshedding.

“Furthermore, Northam is in the process of sourcing additional generators to further protect the operations against potentially greater future disruption.

“In addition to the on-demand generator capacity, development of an 80 MW solar power farm to provide behind-the-meter electricity to the Zondereinde mine and metallurgical complex is in progress.

“Power will be supplied behind the Eskom meter and will accordingly not be subject to load curtailment events. Development is in collaboration with an independent power producer, who will fund the construction and manage the installation,” Dunne outlined.

Edited by Creamer Media Reporter

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