Northam Platinum posts interim numbers

First half performance underpinned by higher output and metal prices

Highlights

  • 25% increase in metal production to 186 704 oZ
  • Unit cash costs reduced by 12.7%
  • Surge in sales revenues to R1.1 bn
  • Net income 397% higher at R303 million
  • Interim dividend of 115 cents declared

Financial results:

Northam Platinum Limited (Northam) released its results for the six months ended 31 December today, Thursdsay 2 February 2006.

A robust operating performance resulted in first half metal production being 25% higher at 186 704 oz. Stronger US dollar metal prices, combined with a marginally weaker rand compared with H1 of F2005, contributed to a 26% increase in the average rand basket price received over the period to R167 079/kg (F2005 H1: R132 547/kg). This, combined with the effect of a 24% increase in unit sales to 188 628 oz, contributed to the 51% surge in sales revenues to R1 084 million. The higher production volumes contributed to a 13% decline in unit cash costs to R104 508/kg.

Year on year net income was 397% higher at R303 million (F2005 H1: R61 million), translating into earnings of 130.4 cents per share (cps), compared with 26.3 cps for the comparable period in F2005. The board has declared an interim dividend of 115 cps. The company remains in a healthy cash position with R615 million cash on hand.

Operating performance

Milled tonnages in the period were 20.5% higher at 1.2 million tonnes, while the combined head grade remained largely unchanged at 5.5 g/t (3PGE + Au). A total of 219 159m2 were mined, 19.4% higher year on year. Some success was achieved in traversing the 20 line fissure fault on the western side of the mine, on 3, 5 and 8 levels, contributing to the 49.7% improvement in development metres to 7 210m, and providing some mining flexibility. The Merensky ore reserve is at 19 months’ availability and UG2 at 28 months.

Prospects

The erratic nature of the Merensky reef combined with the fewer number of working shifts available in the second half of the financial year will give rise to lower metal production and sales. Consequently, should the average Rand basket price received for the second half be in line with currently prevailing prices, a moderate decline in earnings will result.

Distributed by:

Russell & Associates
Tel: +27 11 880 3924
Fax: +27 11 880 3788