Northam increases production but anticipates continued low prices and inflation
Northam Platinum increased production by over 10% for the year ending in June, despite facing higher mining inflation and low platinum group metals (PGMs) prices, which it expects to continue for some time.
Last week, the Minerals Council South Africa cautioned that SA mining output for the second quarter would likely decrease due to persistent non-energy constraints.
In May, PGMs production in South Africa dropped by 11%, with the Minerals Council anticipating output to align with the restructuring of the PGMs sector in the country.
However, Northam Platinum saw a roughly 10% increase in refined PGMs production for the year ending June, reaching around 1 million ounces, including third-party feed. Northam's own production also rose by a similar margin.
Shares in Northam climbed 2.67% on the JSE to about R132.37 in midday trade yesterday.
Total metal sold for the year also rose by about 7.3%, reaching 950,251 ounces, surpassing the company's expectations. This is positive for the company given the low PGMs price environment.
"Given the prevailing pricing weakness and uncertainty in the platinum group metals market, Northam remains internally focused, with management pursuing innovation and operational excellence, particularly in safe production, to ensure efficient mining at the right cost," the company stated. Cash conversion and preservation remain key areas of focus as Northam aims to strengthen its balance sheet to boost investor confidence.
Northam anticipates the current weak PGM price environment to persist for some time, with higher inflation continuing to be a major concern.
"Combined with higher general inflation, (the lower PGM prices) continue to pressure the entire PGM sector," the company said.
Nonetheless, Northam stated it is "well-positioned and fully prepared to face these industry headwinds while continuing to deliver long-term sustainable value" to investors, thanks to its resource base, well-capitalized mining assets, and proactive balance sheet management.
Northam's investment programme remained on track through the year, despite temporary pauses to project modules, which did not significantly affect its progress.
The company's focus on cash conservation during the current pricing cycle has helped it stay on course with its investment programmes.
Northam's ongoing and consistent growth in production volumes and increased operational diversification have continued to support its defensive position and resilience in the current soft metal price environment.
"This affirms the long-term contribution of our counter-cyclical investments made over the past decade, establishing a competitive production base able to withstand potential medium to long-term cyclical downturns," the company said.
Last week, the Minerals Council South Africa cautioned that SA mining output for the second quarter would likely decrease due to persistent non-energy constraints.
In May, PGMs production in South Africa dropped by 11%, with the Minerals Council anticipating output to align with the restructuring of the PGMs sector in the country.
However, Northam Platinum saw a roughly 10% increase in refined PGMs production for the year ending June, reaching around 1 million ounces, including third-party feed. Northam's own production also rose by a similar margin.
Shares in Northam climbed 2.67% on the JSE to about R132.37 in midday trade yesterday.
Total metal sold for the year also rose by about 7.3%, reaching 950,251 ounces, surpassing the company's expectations. This is positive for the company given the low PGMs price environment.
"Given the prevailing pricing weakness and uncertainty in the platinum group metals market, Northam remains internally focused, with management pursuing innovation and operational excellence, particularly in safe production, to ensure efficient mining at the right cost," the company stated. Cash conversion and preservation remain key areas of focus as Northam aims to strengthen its balance sheet to boost investor confidence.
Northam anticipates the current weak PGM price environment to persist for some time, with higher inflation continuing to be a major concern.
"Combined with higher general inflation, (the lower PGM prices) continue to pressure the entire PGM sector," the company said.
Nonetheless, Northam stated it is "well-positioned and fully prepared to face these industry headwinds while continuing to deliver long-term sustainable value" to investors, thanks to its resource base, well-capitalized mining assets, and proactive balance sheet management.
Northam's investment programme remained on track through the year, despite temporary pauses to project modules, which did not significantly affect its progress.
The company's focus on cash conservation during the current pricing cycle has helped it stay on course with its investment programmes.
Northam's ongoing and consistent growth in production volumes and increased operational diversification have continued to support its defensive position and resilience in the current soft metal price environment.
"This affirms the long-term contribution of our counter-cyclical investments made over the past decade, establishing a competitive production base able to withstand potential medium to long-term cyclical downturns," the company said.
