Platinum mining company Northam has increased its funding capacity to tide it over a capital-intensive development period.

A new R1-billion two-year unsecured revolving credit facility to April 2020 is augmenting a previous R2-billion unsecured revolving credit facility to November 2021, taking Northam’s total funding capacity to R3-billion until April 2020.

“The additional R2-billion funding flexibility addresses our investment in the concentrate stockpile during this capital-intensive period for the Booysendal South project,” Northam CEO Paul Dunne said in a release to Mining Weekly.

The additional funding capacity supports the processing of R2-billion worth of surplus concentrate, which was amassed on a stockpile during the construction and commissioning of the now complete second furnace at the Zondereinde mine.

In the past 12 months, Northam has invested R3-billion in Booysendal South and a second furnace, and to acquire the Tumela platinum resource that adjoins Zondereinde and the mothballed Eland platinum mine, as well as a recycling business in the US.

ability to issue notes to the value of R1-billion for a one-year term only was made possible by the monetisation of the stockpile of concentrate at the second furnace, where the feed rate averages 400 t/d at 13.5 MW.

Northam’s net debt of R2.5-billion is made up of R875-million in domestic medium-term notes and a R1.6-billion net drawdown of the R2-billion revolving credit facility.

The second furnace extends by an additional 20 years Northam’s 30-year-old partnership with global metals company Heraeus, which contributed €20-million to the Northam smelter expansion programme, as reported by Mining Weekly earlier this year.

Northam’s smelting capacity has been expanded by 20 MW to 35 MW to provide a processing capacity for the company’s targeted one-million-ounce production of platinum-group metals.

The new furnace provides the additional capacity required to meet the outputs of Zondereinde, Booysendal and Eland and has been designed to cope with upper group two (UG2) ore only or the conventional Merensky/UG2 combination.

During Mining Weekly’s visit to Zonderiende earlier this year, Heraeus Precious Metals global unit president André Christl said that his company’s extended 20-year agreement with Northam included metal offtake, refining services and the contribution from Heraeus to the furnace investment.