Standout performance at Northam’s Booysendal mine

Creating capital efficient, scalable growth opportunities

Johannesburg, 24 February 2017. Northam Platinum Limited (Northam) issued its results for the 2017 financial half-year today, Friday 24 February. Chief executive Paul Dunne provided the commentary below on the group’s performance and prospects.

The standout feature of the first half of F2017 was the good operating performance at Booysendal, and the pace at which growth is being achieved. The production run rate of 100 000 PGM ounces in the first half significantly exceeded the mine’s nameplate capacity. From the original mining footprint we believe we have created capital efficient, scalable growth opportunities with long-term benefits for all stakeholders.

Both the deepening project on the UG2 mine, and work on the Booysendal South mine continued apace. The first blast for the boxcut at Booysendal South was completed in early September 2016 and the mining contract has recently been awarded to begin underground operations in March 2017. The Merensky module at Booysendal North is now complete and producing at 25 000 tonnes per month.

Credit must also go to management and employees for another outstanding safety achievement. The excellent fatality-free run at Zondereinde continued with 6 million fatality-free shifts recorded in November 2016. In early January though, with the start-up, Mr Alexandre Macave, a loco operator with many years’ service, lost his life in an underground rail accident. The board and management express their sincere condolences to the family and colleagues of Mr Macave.

Both tonnages and production ounces were affected at Zondereinde owing to operational reorganisation measures underground. The reorganisation of mining teams followed the discharge of 357 employees after labour disruptions in June 2016. This situation is being addressed and we expect to be back to full complement by March 2017. The drop in milled tonnages was exacerbated by an 18-day outage resulting from a mill bearing failure in the UG2 concentrator.

We remain optimistic that a rise in prices, although gradual, cannot be avoided, given the anticipated rise in demand, even in a conservative global growth climate, and the supply side constraints expected from South African producers in the next few years.

Our fully-funded growth projects at Booysendal, along with the acquisition of new ground to mine at Zondereinde, will add value through an increased production profile, and will allow us to deliver metal into a higher price environment in the years to come.

I am pleased to report that our strategy is unfolding steadily. Adding life to our existing operations has proved to be a cost-effective way of growing our production base, while increasing flexibility and lowering company risk.

Over time, the acquisition of contiguous resources at Zondereinde mine from Anglo American Platinum, announced on 11 October 2016 will restore the balance of Merensky ore to the Zondereinde mining mix, driving high-margin production growth.

The development of Booysendal South continues. With a relatively modest capital programme and small footprint, this brownfields expansion will deliver 250 000 PGM ounces per annum at steady state.

Expanding our metallurgical processing capacity is a critical feature of our growth strategy. Construction work on the dryer and furnace at Zondereinde continues.

Importantly, none of this work would have materialised without the black economic empowerment transaction with Zambezi Platinum (RF) Limited (Zambezi) concluded in 2015.

Our HDSA equity levels remain within the current Mining Charter guidelines, along with headroom to manoeuvre. On the social front, our reinvigorated housing strategy is delivering pleasing results. The hostel conversion programme is now complete, and in total, Zondereinde has built 433 houses in the neighbouring towns of Mogwase and Northam, along with a world-class new industrial change house for our living out employees.

In addition to our brownfields growth strategy, we continue to look for external opportunities. In this regard, we have signed an agreement to purchase the Eland mine near Brits from Glencore Operations South Africa Proprietary Limited for R175.0 million.

We believe that the Eland orebody, together with the established infrastructure, presents an attractive, low-cost opportunity and a medium-term option for growth.


Growth doesn’t occur without spend. This has been a busy half-year for both the group and its operating divisions with prepayments made on the aerial rope conveyor infrastructure for Booysendal South of R157.9 million, capital expenditure amounting to R773.0 million and the acquisition of Zambezi preference shares for R208.7 million.

Nevertheless, our cash balance stands at R2.2 billion, and our financial position remains robust. Northam is well positioned to benefit from an upswing in metal prices.

Issued by
Russell & Associates
Tel +27 (0)11 880 3924
Marion Brower +27 71 493 0387
Jan Walker +27 71 493 0429