Production stoppages hit Northam results
Northam Platinum Limited (Northam) today issued its results for the year ended 30 June 2011.
Key features for the year under review:
- 12.4% higher rand basket price at R323 899/kg
- Decline of 19.8% in metal sales to 9 872kg (317 392oz)
- Sales revenues 9.5% lower at R3.6 billion
- Earnings down 46% year on year at 96.2cps
- Modest dividend of 10cps declared
- Disappointing operational performance
- Strike and safety-related stoppages impact production
- Merensky ore reserve constraints persist
- construction and development on track
- Mining right and water use licence obtained
- Progress in funding arrangements
Presenting the group’s results chief executive Glyn Lewis said today that the six-week strike at the Zondereinde division in H1 had had a major negative impact on results for the year, which were further compounded by safety-related stoppages continuing into the second half of the year, exacerbating the already compromised production position. “Furthermore, given the lower production, we were unable to take advantage of the slightly stronger rand basket price received over the year of R323 899/kg (F2010:R288 255/kg).”
Year-on-year total operating costs were 1.3% higher at R2.26 billion, although the unit cost increases were higher, skewed by the significant drop in volumes. Costs continue to be driven by mining input costs, primarily labour and power, increasing above the rate of inflation. The net result was lower operating profit at R385.3 million.
Earnings per share were 45.9% lower at 96.2cps. This takes into account a 6.0% increase in the number of issued shares to 382 416 190 shares during the year.
At Zondereinde 65 out of a total of 301 working days were lost to strike action and safety-related incidents. This, along with the constraints on the Merensky reef horizon contributed to the decline in tonnages, from 2 038 225 tonnes in F2010 to 1 590 845 tonnes in the year under review. The lower head grades further exacerbated the situation, leaving metal in concentrate production at 22.2% lower year on year at 7 779kg (250 110oz).
The key to recovery at Zondereinde lies in the availability of Merensky reef, the lack of which is likely to persist for the next 18 months until the additional stoping areas and the decline section come on stream.
“Good progress has been made with reducing project risk at Booysendal following on the regulatory approvals obtained for the mine, notably a new order mining right, and a water use licence, enabling us now to fast-track the construction and development.”
Management is in the process of securing additional funding to supplement the company’s internal financial resources for the development of the Booysendal mine, which remains on track for first production in early 2013.
Distributed by Russell & Associates
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