[miningmx.com] – NORTHAM Platinum’s miserable financial year, which ends on June 30, continued with the company saying today it had to rebuild a furnace at its Zondereinde mine and send concentrate for third party tolling.
The impact is an increase in costs and delayed cash flow in a six month period when it lost R192m in revenue owing to a three week strike at Zondereinde. Corporate plans to sell Booysendal South to Aquarius Platinum for R1.25bn also fell through after the South African government failed to approve the transfer of the mining right.
It also emerged this year that the company will have to rebuild its empowerment stake after BEE partners Afripalm Resources and Mvelphanda Holdings sold their Northam shares which were held by bankers in collateral.
On May 16, Northam announced that it had reduced the energy intensity supplied to its Zondereinde smelter in order to test for erosion of refractory bricks in one of the furnaces. It now said today: “This has necessitated a rebuild of the smelter”.
“Further pyrometallurgical and chemical analyses will be carried out to ascertain the cause of the erosion,” it said. “The Zondereinde mine and concentrators continue to operate normally, while the concentrate will be treated on a toll basis at other facilities,” it added.
The duration and cost of the rebuild is yet to be determined, although Northam guided analysts last week to a R15m capital spend on the rebuild. That’s at least better than the R42m it spent rebuilding another furnace, also at Zondereinde last year.
Just over a year ago, Northam announced that it would rebuild its smelter at Zondereinde following a run-out at the furnace wall-end in April 2012. That rebuild eventually took four months to complete and a further month to commission.
Commenting on the latest furnace problem, an analyst said: “They will probably send concentrate to Impala Refining Services and cash flow will be delayed by about a quarter”.
Shares in Northam Platinum fell 3.2% to R31.17/share and means that Northam’s share price losses this year total about 22.5%.
