Northam puts R1.65 billion note on the market |
LISTED Platinum Group Metals (PGM) producer Northam Platinum said yesterday that it had placed a R1.65 billion ($118 million) domestic medium-term note on the market and would use initial proceeds to repay other notes it issued as part.
The miner said the private placement fell under its R2 billion domestic medium-term programme.
Northam said it wanted to bring its net debt down from R2.9bn to R2.2bn or less by June, the end of its financial year, and close to the R2bn level that it targeted as a level with which it would be comfortable.
“Northam is pleased to maintain its balance sheet strength and funding flexibility to complete its various growth projects and, in due course, to commence a programme of repurchasing its ordinary shares and/or purchasing Zambezi Preference Shares to return value to shareholders,” Paul Dunne, Northam’s chief executive, said in the note yesterday.
In February Northam said its firsthalf operating profits were expected to climb to a record R1bn for the six months to December 2018.
The company said at the time that the hike would see the group recording a 204.3 percent boost from the R338.8m in the same period a year earlier.
It said revenue had surged by 48.6 percent to R5bn from R3.4bn in the same period last year, driven primarily by higher volumes.
Yesterday the group said it would spend more than R2.3bn at its Zondereinde, Booysendal complex and Eland assets this year.
It said the biggest chunk of the R1.5bn would go towards Booysendal, a shallow, mechanised, low-cost operation near Steelpoort in Limpopo.
Northam, which operates the Zondereinde mine near Thabazimbi in Limpopo, has set its sights on becoming a 1 million ounces a year producer. It has previously committed itself to avoiding chasing production for the sake of size alone.
Its unit cash costs per platinum ounce have, however, increased 5.5 percent to R22 007 from R20 851 an ounce in the same period last year.
However, unit cash costs per platinum ounce increased 5.5 percent to R22 007 from R20 851 an ounce in the same period last year.
The group acquired the ground adjacent to Zondereinde’s western boundary from Anglo American Platinum for R1bn, providing Zondereinde with additional Merensky and UG2 resources.
Zondereinde’s life expectancy has been extended to more than 30 years.
Northam also acquired the mothballed Eland mining assets from Glencore for R175m.
Northam shares rose 3.99 percent on the JSE yesterday to close at R63.60.