Northam posts solid year-end financials

Northam Platinum Limited today posted a solid set of results for the year ended 30 June 2004. The company reported attributable profit of R253.6 million (F2003: R274.9 million). A final dividend of 60 cents per share has been declared along with a capital repayment of 20 cents to shareholders, bringing the total distribution for the year to 125 cents (F2003: 145 cps).

Output of precious metals in concentrate marginally exceeded last year’s record level by 2.3%, rising to 340 547 ounces. Given that tonnages were only marginally higher at 2.2 Mt, the higher production was achieved with an improvement in the combined head grade from 5.3 g/t to 5.5 g/t (Merensky 6.0; UG2 4.3). With the higher output and a reduction in the metals inventory, sales volumes increased sharply by 27.9% to 377 239 ounces.

The higher sales volumes and a 19.9% increase in the US$ basket price to US$597/oz were partly offset by the strongly performing South African currency over the period. This had an anticipated effect on sales revenues, capping the increase by 16.9% to R1 720 million.

A strong focus on cost control was maintained and yielded a positive result, with total operating costs rising by 5.3%, translating into a marginal rise of 2.7% in unit cash costs to R99 532/kg. Cost of sales was higher at R1 332 million and includes an amount of R15 million for concentrates purchased to optimise smelter efficiencies, and a credit of R14 million relating to metal leased during the previous financial year, and returned in F2004.

Commenting on the company’s growth aspirations, Northam General Manager Glyn Lewis said that the agreement regarding the acquisition of the JV interest in the Booysendal project was close to being finalised and that a circular would be posted to shareholders in due course. “Booysendal is a well explored area on the Eastern Limb of the Bushveld Complex, and is underlain by the Merensky and UG2 reef horizons. With this acquisition Northam gains access to a world-class PGM resource of 62.2 Moz (attributable), with an opportunity of diversifying our operational base.”

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