Announcements 2022

In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to publish a trading statement as soon as they are satisfied, with a reasonable degree of certainty, that the financial results for the current reporting period will differ by at least 20% from the financial results of the previous corresponding period.

Northam expects to report an increase in earnings per share in the range of 55.9% to 65.9% for the six months ended 31 December 2021 (“H1 F2022”) compared to the six months ended 31 December 2020 (“H1 F2021”). 

As published on SENS on 20 September 2021, Northam Holdings was introduced as the new holding company for the group by way of a share exchange implemented on a 1 for 1 basis, in terms of which Northam Platinum shareholders exchanged their ordinary shares (net of treasury shares) in Northam Platinum (“Northam Platinum shares”) for ordinary shares in Northam Holdings (“Northam Holdings shares”). Simultaneously, Northam Platinum became a subsidiary of Northam Holdings and all Northam Platinum shares in issue were delisted from, and all Northam Holdings shares in issue were listed on, the Main Board of the exchange operated by the JSE Limited, thereby ensuring the continuation of the group listing.

In light of the above, the condensed reviewed interim financial results of Northam Holdings (H1 F2022) reflect the arrangement that is in substance a continuation of the group. Northam Platinum is the predecessor for financial reporting purposes (H1 F2021).

Key financial features of H1 F2022 (Northam Holdings), compared to those of H1 F2021 (Northam Platinum) were as follows:

Metric H1 F2022 H1 F2021 % variance
Basic earnings per share (cents) 935.0 – 995.0 599.9 55.9% – 65.9% 
Headline earnings per share (cents) 931.5 – 991.5 599.9 55.3% – 65.3% 
Normalised headline earnings per share (cents) 943.0 – 1 007.2 641.5 47.0% – 57.0% 
Number of shares in issue including treasury shares (note 1) 396 615 878 509 781 212 (22.2%)
Weighted average number of shares in issue (notes 1 and 2) 363 052 144 349 875 759 3.8%


  1. Since the consolidated financial results of Northam Holdings are in substance a continuation of the group, the shares used in calculating the number of issued shares and weighted average number of issued shares are based on the issued stated capital of the listed entity at that stage.
  2. Used to determine the basic and headline earnings per share.

The number of shares in issue reduced by approximately 22.2%. This is the net outcome across both entities (Northam Holdings and Northam Platinum) resulting from, inter alia:

  • a reduction in Northam Platinum shares pursuant to the early maturity of the broad-based black economic empowerment (“BBBEE”) transaction with Zambezi Platinum (RF) Limited (“Zambezi BEE transaction”) (shareholders are referred to the circular dated 31 May 2021 setting out further details to this transaction); and
  • a subsequent issue of Northam Holdings shares to Royal Bafokeng Investment Holding Company Proprietary Limited (“RBH”) in settlement of a portion of the purchase consideration for the acquisition of the Royal Bafokeng Platinum Limited (“RBPlat”) shares (“RBPlat shares”) from RBH.

Production and unit cash costs

The group’s equivalent refined metal from own operations decreased marginally to 351 359 oz 4E (H1 F2021: 352 741 oz 4E), as a result of challenging operational circumstances experienced during the period under review and was largely attributable to lower production at Zondereinde. 

The Zondereinde and Booysendal mines experienced particularly difficult operational environments during this period. Tragically, Zondereinde suffered two mining related fatalities, together with increased medical absences relating to the ongoing COVID‑19 pandemic. Furthermore, regional community unrest resulted in various production stoppages at Booysendal. These factors negatively impacted the group’s metal production as well as unit cash costs.

Group unit cash costs per equivalent refined platinum ounce increased by 18.6% to R32 814/Pt oz (H1 F2021: R27 660/Pt oz) as a result of cost increases at all operations. Zondereinde’s unit cash costs escalated by 21.3% to R34 544/Pt oz (H1 F2021: R28 473/Pt oz), with a corresponding increase of 19.1% at Booysendal to R24 158/Pt oz (H1 F2021: R20 288/Pt oz), and a 7.9% increase at Eland to R42 583/Pt oz (H1 F2021: R39 476/Pt oz). These increases were the result of higher input costs and lower than anticipated production volumes. Higher input costs were the result of an increase in the number of employees in service as the group continues to grow the labour component to enable the planned expanded production profile, as well as higher than normal inflation relating to, in particular, electricity tariffs and consumables such as diesel, steel and chemicals. 

Despite the challenging operating environment, the group’s expansionary projects remain on track. Development of the Western extension at Zondereinde has progressed well. Booysendal has made good progress on South mine, whilst recording seven million fatality free shifts and remaining fatality free since inception. Eland mine continues to ramp-up and the addition of the recently acquired Maroelabult section, transferred in January 2022, provides flexibility which will positively impact the overall mine build programme.

Unit cash costs for the group and per operation for H1 F2022 compared to H1 F2021 were as follows:

  Unit cash cost  
R/Pt oz  
H1 F2022 H1 F2021 % variance
Group cash cost per equivalent refined platinum ounce 32 814 27 660 (18.6%)
Zondereinde cash cost per equivalent refined platinum ounce 34 544 28 473 (21.3%)
Booysendal cash cost per platinum ounce in concentrate produced 24 158 20 288 (19.1%)
Eland cash cost per platinum ounce in concentrate produced 42 583 39 476 (7.9%)

Key production metrics for H1 F2022 compared to H1 F2021 were as follows:

  Equivalent refined production  
oz 4E  
H1 F2022 H1 F2021 % variance
Own production from Zondereinde 156 688 166 773 (6.0%)
Own production from Booysendal 173 606 165 864 4.7% 
Own production from Eland 21 065 20 104 4.8% 
Total production from own operations 351 359 352 741 (0.4%)
Purchased material 25 188 18 772 34.2% 
Total production 376 547 371 513 1.4% 

Volumes of purchased material increased by 34.2% to 25 188 oz 4E (H1 F2021: 18 772 oz 4E). The cost of purchased material is determined by applying the ruling commodity prices to the prill split of the purchased material. During the period under review third party material purchased contained more platinum, with a lower cost, and less palladium, with a higher cost, than the previous corresponding period which impacted the cost of the material purchased, resulting in a cost increase of 21.7%.

Equivalent refined production from own operations for the full financial year ending 30 June 2022 is forecast to be between 680 000 and 710 000 oz 4E. This will result in an estimated unit cash cost per platinum ounce of between R33 000 and R34 000, assuming no further adverse inflationary pressure during the remainder of the current financial year.


Sales volumes were impacted by the planned rebuild and upgrade of smelter furnace 1 at the Zondereinde Metallurgical complex (“furnace 1”) which commenced during May 2021 and was successfully completed at the end of October 2021.

Sales revenue for the period amounted to R13.9 billion, an increase of 16.8% from the previous corresponding period (H1 F2021: R11.9 billion). This increase was the combined result of softer PGM sales volumes (309 255 oz 4E versus 315 320 oz 4E in H1 F2021) in light of the furnace 1 rebuild and upgrade and higher USD basket prices, which prices were somewhat offset by a stronger ZAR/USD exchange rate.

The average USD basket price achieved increased by 22.5% to USD2 647/4E oz, from USD2 160/4E oz in H1 F2021. This benefitted from an 8.0% increase in the average platinum price to USD1 009/oz (H1 F2021: USD934/oz), together with a 15.7% increase in the average rhodium price to USD15 385/oz (H1 F2021: USD13 296/oz). The price of minor metals, iridium and ruthenium, continue to perform well, increasing by an average of 147.8% and 127.5% respectively, during the period under review. It is expected that iridium and ruthenium, which are critical to the growing hydrogen economy, will become increasingly significant contributors to the group’s revenue.

The average ZAR/USD exchange rate strengthened by 6.2% over the same period, to R15.04/USD (H1 F2021: R16.04/USD).

Total revenue per platinum ounce sold increased by 14.4% to R70 140/Pt oz, from R61 307/Pt oz in H1 F2021, resulting in a cash profit margin per platinum ounce in excess of 50%.

Sales volumes are expected to increase during the second half of the 2022 financial year as inventory built up ahead of the smelter is being processed. Sales guidance for the full financial year is between 720 000 and 740 000 oz 4E, with 770 000 to 800 000 oz 4E expected to be delivered to the group’s refiners.

The table below summarises dispatched metal volumes to the group’s precious metal refiners, compared to metal volumes refined and sold, together with the average achieved USD sales prices per metal.

Metal Dispatched Refined Total metal sold (including the sale of concentrate) Average sales prices achieved
oz oz oz USD/oz
Platinum 215 230 192 573 197 911 1 009
Palladium 87 932 76 389 79 182 2 149
Rhodium 27 049 26 445 28 785 15 385
Gold 3 622 3 390 3 377 1 798
Total 4E 333 833 298 797 309 255 2 647

The above table does not include attributable ounces relating to Northam’s investment in RBPlat.

As a result of the planned rebuild and upgrade of furnace 1 during the period under review, total refined volumes for the 6 months decreased by 7.3% to 298 797 oz 4E (H1 F2021: 322 170 oz 4E).

Concentrate sold to a third party in order to honour legacy offtake agreements relating to the Everest and Maroelabult operations contained 19 758 oz 4E. Refined metal sold to the group’s customers totalled 289 497 oz 4E.

The group engaged the services of a second precious metal refiner during the period under review to cater for the group’s medium to long-term production growth profile. As a result, the precious metal pipeline increased by approximately 40 000 oz 4E, reducing metal available for sales during H1 F2022.

Financial results

Despite the operational and inflationary challenges experienced, operating profit increased by 12.7%. The key contributor to this increase was a 16.8% increase in revenue which was partially offset by a corresponding 20.0% increase in cost of sales, resulting in an operating profit of R5.9 billion for the period under review (H1 F2021: R5.2 billion).  

Earnings before interest, taxation, depreciation and amortisation (“EBITDA”) increased by 19.1% to R6.4 billion (H1 F2021: R5.4 billion).

During the period under review the group generated cash flow from operations amounting to R2.9 billion (H1 F2021: R3.1 billion). Cash generated was impacted by marginally lower sales volumes and higher than inflation cost increases. Sales volumes were impacted by higher inventory levels arising from the planned rebuild and upgrade of furnace 1 during the period, together with the increased pipeline as a result of the introduction of a second precious metal refiner. As at 31 December 2021, inventory on hand amounted to approximately 380 000 oz 4E. Applying the average basket price realised during the period under review, inventory on hand is valued at c. R18.7 billion as at 31 December 2021.

Cash generated was applied towards the composite transaction (as contemplated in the circular to shareholders dated 31 May 2021) and the concomitant repurchase of almost 30% of the shares in issue, resulting in a once-off outflow of cash in excess of R6.6 billion, together with the acquisition of RBPlat shares amounting to a further outflow of R4.1 billion during the period.

The combined impact on cash flows, including an increase in capital expenditure and the significant cash outlay in respect of the accelerated maturity of the Zambezi BEE transaction and concomitant share repurchase, resulted in net debt increasing to R14.3 billion, excluding the deferred portion of the purchase consideration relating to the acquisition of the RBPlat shares, amounting to R5.7 billion as at 31 December 2021 (“outstanding consideration”). As previously communicated to shareholders, Northam is comfortable with a self-imposed long-term net debt to EBITDA ratio of 1 to 1 (“debt ratio”) in the pursuance of the group’s growth strategy. Excluding the outstanding consideration, which relates to a corresponding cash generative underlying asset with no net debt, the debt ratio as at 31 December 2021 (expressed on a rolling twelve month basis) amounted to 0.81. Inclusive of the outstanding consideration, the debt ratio was 1.13. The ongoing release of metal built up ahead of the smelter following the recommissioning of furnace 1, as well as a normalisation of the metal pipeline following the introduction of a second precious metal refiner, combined with the strong current metal price environment and the receipt by Northam of the dividend declared by RBPlat subsequent to the period end (refer below), will contribute to normalising the debt ratio (post settlement of the outstanding consideration) by 31 December 2022.

For the period under review, the group’s share of earnings from RBPlat amounted to R128.4 million (included in EBITDA and calculated for the period from 19 November 2021 until 31 December 2021, adjusted for additional RBPlat shares purchased on-market by Northam during December 2021, as announced on SENS on 7 December 2021). A dividend of R536.2 million was declared in respect of Northam’s shareholding in RBPlat subsequent to the period end and is excluded from the above. As at 31 December 2021, RBPlat reported net cash on hand (after taking into account the RBPlat dividend declaration in respect of this period) of R3.4 billion. This equates to c. R11.60 per RBPlat share currently in issue. 

Investment in RBPlat

During the period under review, Northam made a strategic investment by acquiring a significant shareholding in RBPlat, as published on SENS on 9 November 2021. Further acquisitions of RBPlat shares were announced on 7 December 2021. Shareholders are referred to these announcements for details regarding the investment in RBPlat.

As at 31 December 2021, Northam held 100 219 552 RBPlat shares. As set out in more detail in the 7 December 2021 announcement, Northam has the option to increase its shareholding in RBPlat by purchasing up to a further 6 145 798 RBPlat shares (“option shares”) at R131.56 per share (calculated as at 31 December 2021, including escalation and after taking into account the dividend to be received by RBPlat shareholders).

As at 31 December 2021 and assuming:

  • all option shares have been acquired by Northam (as at 31 December 2021, for illustrative purposes); and
  • the dividend declared by RBPlat for the period ended 31 December 2021 has been received,

the illustrative net cost per RBPlat share acquired by Northam amounts to R171.58 per share. RBPlat’s reported net cash on hand as at 31 December 2021 (after taking into account the RBPlat dividend declaration in respect of this period) amounted to c. R11.60 per RBPlat share.

Northam believes that its investment in RBPlat holds the potential for substantial long‑term value creation. It provides inherent optionality and its complementary metal mix, with a higher relative platinum contribution, fits well within the broader Northam basket. The RBPlat assets are young, shallow, well-capitalised and occupy a strategically important position in the Western Bushveld.

Capital expenditure

Capital expenditure increased to R2.3 billion (H1 F2021: R1.3 billion). This is the result of the restart of capital projects that had been curtailed following the onset of the COVID-19 pandemic, partially offset by capital projects having either been completed, or being near completion at Booysendal mine. R1.5 billion (H1 F2021: R918.1 million) was spent on expansionary capital expenditure and R776.9 million (H1 F2021: R380.5 million) on sustaining capital expenditure.

The significant increase in sustaining capital expenditure was a result of the planned rebuild and upgrade of furnace 1 together with a number of extensions to strike belts and the first significant fleet replacements at Booysendal.

Expansionary projects that had previously been temporarily scaled back included: the Central Merensky and BS4 modules at Booysendal mine; aspects of the Western extension number 3 shaft project at Zondereinde mine; and the stoping build-up at Eland mine.

Following improved market certainty, all COVID-19 related curtailed growth projects were re-initiated and the majority of workflow impacts resulting from the stoppage were clawed back. As such, the overall impact on the group’s growth strategy has been minimal.

Group capital expenditure for the full financial year is forecasted to amount to approximately R4.6 billion. The potential for further disruption to operations and the metal markets as a result of the COVID-19 pandemic, as well as market disruptions following the invasion of Ukraine by Russia, remain as risks to production and sales. In addition, a risk of regional community unrest on the eastern limb of the Bushveld remains. We continue to monitor the market and will amend the group’s capital program when and where prudent. 

The group continues to execute on its strategy of developing low-cost, long-life assets in order to position itself at the lower end of the industry cost curve. We believe that the development of the group’s project pipeline, which builds on the group’s pre-existing and acquired asset base, is bearing fruit and will continue to position Northam to deliver strong operational performance and financial results.


In summary, whilst the operating environment has been particularly challenging, we believe that the period under review has been important for Northam, given:

  • the significant progress made in respect of the group’s organic growth projects;
  • the successful acceleration of the maturity of the Zambezi BEE transaction and value unlock for BBBEE;
  • the c. 30% share repurchase;
  • the establishment of a new group structure and the listing of Northam Holdings; and
  • a significant strategic investment in RBPlat, coinciding with the introduction of RBH as an important empowerment shareholder of Northam.

The financial information contained in this announcement is the responsibility of the board of directors of Northam Holdings and has not been reviewed or reported on by Northam’s auditors. The reviewed consolidated results for Northam Holdings for the six months ended 31 December 2021 are expected to be published on or about 31 March 2022.

24 March 2022