| Mon 17 Nov 2008, 17:30 | | NHM - Northam Platinum Limited - Operational update and trading estimate |
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NHM
NHM
NHM - Northam Platinum Limited - Operational update and trading estimate
NORTHAM PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1977/003282/06)
JSE code: NHM
ISIN: ZAE000030912
("Northam" or "the company")
OPERATIONAL UPDATE AND TRADING ESTIMATE
1. Introduction
In view of the deteriorating global economic climate and its consequent effect
on commodity prices, the company considers it prudent to provide shareholders
with an update on its operational and financial performance for the first four
months of the 2009 financial year ("the period"). Numbers for the
corresponding first four months of the previous financial year are provided
for purposes of comparison.
2. Salient features for the period
* Production of metals in concentrate up 14.3% to 3 543 kg (113 910 oz)
* Sales volumes up by 639 kg (20 544 oz)
* Healthy sales revenues at R1.3bn
* Average 3PGE+Au basket price of R359 844/kg (US$1 391per oz) realized, 24.3%
higher year on year
* Operating margin of 45.8%
3. Key operational statistics
4 months 4 months
ended ended
31 31 October
October 2007
2008
Development metres 4 370 4 199
Square metres mined 138 551 127 246
Tonnes milled 792 994 707 018
Head grade (g/tonne - 3 PGE + 5.2 5.0
Au)
Precious metals produced 3 543 3 099
(3PGE+Au) (Kg)
Precious metals sold (3PGE+Au) 3 271 2 632
(Kg)
Average price realised - R/kg 359 844 303 383
Operating costs - R/kg 206 708 188 831
Cash operating costs - R/kg 182 876 169 973
Sales revenue (R`000) 1 288 947 692
820
Cost of sales (R`000) 698 936 440 723
Operating profit (R`000) 589 884 506 969
Profit after tax (R`000) 364 803 290 451
Operating cash flow (R`000) 242 456 108 750
Capital expenditure (R`000) 122 137 56 887
Earnings per share (cents) (Note 117.5 122.4
1)
Headline earnings per share 117.5 122.4
(cents) (Note 1)
Weighted average number of 310 500 237 279
shares in issue (Note 1) 508 195
Note 1 - On 20 August 2008 the number of shares in issue increased by 121.0
million as a consequence of the implementation of the Booysendal Transaction.
4. Capital expenditure
As indicated at the end of the 2008 financial year, capital expenditure for
the year to 30 June 2009 is estimated at R352 million, of which R122 million
has been spent to date..The major capital items included in this estimate are
a provision of R75 million for the rebuild of the smelter at the Northam mine
and R106 million allocated to the deepening project, specifically the decline
to 18 level and related development.
The smelter rebuild is proceeding well, in line with the planned schedule and
within budget, and remains due for recommissioning at the end of December
2008.
The decline to 16 level is expected to be complete by the end of the financial
year after which related development and infrastructure for mining on 15 level
will commence.
5. Booysendal
The company is proceeding with the Booysendal feasibility study. This is
scheduled for completion in the third quarter of calendar 2009. The estimated
cost for the current financial year is R50 million of which R24 million has
been spent to date. Initial indications that the Booysendal project will
follow a modular production ramp-up approach remain unchanged.
6. Cash and cash equivalents
As at 31 October 2008, the company had cash and cash equivalents of R917
million, (equivalent to R2.55 per share) after the payment of tax and
dividends in excess of R1.1 billion.
7. Outlook
During the smelter rebuild Northam`s precious metal concentrate is being
refined in terms of a toll refining agreement with a third party. The longer
metal pipeline in terms of this agreement will affect unit sales during the
first half of the financial year with a consequential effect on earnings per
share and headline earnings per share.
At the current spot metal prices and R/$ exchange rate, Northam`s average
basket price for the financial year is estimated at R274 161 per kilogram of
3PGE+Au.
Although the rate of exchange of the South African Rand against the US dollar
has been characterized by increasing levels of volatility since the end of the
2008 financial year, the Rand has traded weaker by 34% against the US dollar
in the first four months of this financial year. Provided there is no
significant increase in the value of the Rand against the US dollar from these
levels, and spot metal prices do not decline further, the company is confident
that it will continue to cover its cash costs and capital expenditure.
8. General
The information contained in this announcement has been prepared in accordance
with International Financial Reporting Standards (IFRS) and incorporate the
accounting policies that that are consistent with those adopted in the
financial year ended 30 June 2008.
Shareholders are advised that the information included in this announcement is
the responsibility of the Northam`s directors and has not been reviewed or
reported on by the company`s auditors.
Johannesburg
17 November 2008
Sponsor
Barnard Jacobs Mellet Corporate Finance (Proprietary) Limited
Date: 17/11/2008 17:30:24 Produced by the JSE SENS Department.
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