Northam Platinum’s strategy of buying additional mines, as its strives to become a 1-million ounce a year platinum group metals producer, netted it Glencore’s Eland Platinum mine for R175m cash.
As part of the agreement, Glencore will have exclusive rights to market and sell all the chrome Northam produces in exchange for the sale of its Eland mine and a concentrator that can treat 250,000 tonnes of ore a month. It also comes with a 100-piece mining fleet, some of which Northam will divert to its new Booysendal South mine, which was the old Everest South mine it bought from Aquarius Platinum to unlock its large Booysendal tenement near Steelpoort in Limpopo.
The Booysendal mine increased its chrome concentrate output by 45% in the six months to end-December, to 138,635 tonnes.
Eland has a resource of 21.3-million ounces of four platinum group metals near Brits in the North West.
“The Eland transaction provides Northam with a medium-term option over a large, shallow resource with fully developed, world-class surface infrastructure,” Northam CEO Paul Dunne said.
Northam reported a narrowing of its loss for the six months to end-December, at R226.6m against a R273m loss in the same period a year earlier. The loss comes despite an uptick in revenue to R3.5bn from R3.2bn and operating profit growing to R352m from R93m. Metal sales fell nearly 10% to 223,705oz during the interim period because of an 18-day stoppage caused by a mill failure at its UG2 concentrator at its Zondereinde mine.
UG2 is a reef that contains platinum group metals and chrome and is one of two reefs that platinum miners target, the other being the sought-after Merensky Reef.
Northam also rearranged its underground working crews after it fired 357 people following labour disruptions at the mine in June last year, which meant fewer tonnes of UG2 and Merensky ore were mined and hoisted.
Northam expects to have full mining teams back underground by March.Booysendal generated 100,021oz of platinum group metals, up from nearly 74,000oz a year earlier.