[miningmx.com] — NORTHAM Platinum is looking to raise more funds for
its developing Booysendal mine, despite previously declaring the project to be “fully
funded’.
The reasons appear to be concerns from management over possible delays in both the
finalisation of the sale of Booysendal South to Aquarius Platinum (which would bring
in R1.2bn), as well as to the construction schedule for Booysendal.
Other factors that could hit Northam’s ability to fund Booysendal include the negative
impact on its current operations at the Zondereinde mine of possible power
shortages.
CEO Glyn Lewis also voiced his concerns over the volatile
industrial relations situation in the mining sector, which had affected operations at
Impala Platinum (Implats) badly.
Management sounded cautious over the prospects for Zondereinde, where it described
mining conditions on the Merensky Reef as “challenging’ and said the pace of the
recovery at the mine will be “largely determined by geological and mining conditions’.
Giving a presentation on Northam’s results for the six months to end-December in
Johannesburg on Friday, Lewis expressed concern about delays in obtaining the
regulatory approvals for the sale of Booysendal South required from the Department
of Mineral Resources (DMR).
“The application documentation was submitted to the DMR in October last year, but
since then it has been shifted from one regional office to another, with no apparent
progress being made on adjudication,’ said Lewis.
He added that management continued to look at other options open to the company
to fund Booysendal.
That’s in sharp contrast to the situation in November last year, when Northam put a
five-year revolving credit facility for R1bn in place with Nedbank.
At the time Lewis said, “Together with Northam’s existing cash resources of
approximately R1.7bn [as at June 30, 2011] and R1.2bn from the proposed sale of the
southern portion of Booysendal, the facility provides Northam additional financial
flexibility and will ensure the group is fully funded in the medium term to pursue its
strategic priorities.’
Asked whether there was now a likely shortfall and how much more money Northam
was looking for, Lewis replied, “I am just being conservative.’ He declined to give a
target figure at this stage.
Lewis would also not be pinned down on the start date for production at Booysendal,
which is now given as the first half of calendar 2013, compared with the estimate of
“early 2013′ given in November last year.
He said there had been “some delays’ and commented, “I would like to start
production in January 2013, but I am being a bit conservative.’
In the six months to end-December, Northam increased production at Zondereinde by
26.5% to 4,592 kg (first half 2010 – 3,629kg) of precious metals in concentrate, and
more than doubled headline earnings to R198.2m (R75.6m).
Operations in the first half of 2010 at Zondereinde were badly affected by a six-week-
long strike.
