JOHANNESBURG (miningweekly.com) – JSE-listed Northam Platinum has posted a R1.03-billion loss for the 2015 financial year, in line with expectations as set out in a trading statement earlier this week.

FD Ayanda Khumalo on Thursday said the company had achieved an operating profit of R595.8-million for the 12 months to June 30, with corporate transactions incurring a one-off expenditure of R1.58-billion. This reflected the accounting charges and costs associated with two major corporate deals – Northam’s R6.6-billion black economic-empowerment (BEE) deal and a R4.6-billion capital raise – during the year.

“The expenses impacted negatively on the bottom line, resulting in the group reporting a loss of R1.03-billion, and a loss a share of 264.3c,” he said.

Meanwhile, the company’s sales revenue increased by 13% year-on-year to R6.1-billion,

The company’s BEE deal saw special purpose vehicle, Zambezi Platinum, which was formed to house the company’s historically disadvantaged South African shareholder base, list on the JSE in May.

The company had also recorded a successful capital-raising of R4.6-billion, as part of the BEE deal.

Northam Platinum CEO Paul Dunne said the company’s empowerment status was now 35.4%, making the company ideally suited to acquire the Everest mine assets and mineral reserves from Aquarius Platinum.

The asset will be integrated into Northam’s Booysendal South operation in Mpumalanga, which has a large unmined resource.

Meanwhile, Northam lifted its platinum group metals (PGM) sales for the year by 6.6% to 422 630 oz, which, combined with a weaker rand, contributed to the 13% increase in sales revenues.

The higher sales volumes were attributable to higher production volumes for the group, which were up 15.1% to 378 070 oz.

Operating costs, which rose 22.8%, increased as a result of Booysendal’s new production, and higher power and wage costs.

The increase in the cost of sales was 3.1%.

The company’s cash balance at the end of the financial year was R4.13-billion, most of which was received in May owing to capital-raising with the BEE transaction.

NORTHAM OPERATIONS
The company’s Zondereinde platinum mine in Limpopo produced 7.9% higher tonnages in the financial year under review despite a shaft incident early in the year and a week-long work stoppage in January.

“The Zondereinde mine is operating at a steady state and its performance during the year under review reflects this stability and our confidence in it sustainability. The UG2 performance was good, as management works towards shifting the mining ratio of the mine to 65:35 UG2: Merensky,” said Dunne.

This affected the average head grade, which declined to 4.9 g/t.

Metals produced from underground increased by 8.4% to 255 595 oz, while concentrates purchased increased by 18.4% to 75 168 oz.

Meanwhile, Northam spent R303.2-million at Zondereinde following the suspension of nonessential expenditure.

Dunne said the company would not defer capital projects indefinitely and that it would continue with projects that were strategically important.

These projects included the construction of a new furnace, a UG2 concentrator upgrade and the development of mining infrastructure to 18 Level to extend the life of mine.

Meanwhile, Dunne was confident that, unless there were unforeseen circumstances, Booysendal would reach its yearly steady-state PGM production target of 160 000 oz in the first half of the next financial year.

Booysendal’s run-of-mine production for 2015 totalled 1.67-million tonnes with the tonnage milled increasing to 1.79-million tonnes at head grade of 2.6 g/t.

The concentrator achieved an average recovery of 86%.

Booysendal’s total operating costs were R1.19-billion against R806.8-million in the last financial year, with unit operating costs 0.9% lower at R358 554/kg and cash costs 11.3% higher at R308 719/kg.

“We are confident that the group’s strong balance sheet and prudent financial controls will provide support until such a time that metal prices rise substantially,” said Dunne.