Geological, technical and economic factors will determine the performance of precious group metals into the foreseeable future, says JSE-listed platinum producer Northam Platinum.

The company, which recently released its half-year results ended December 2012, noted that the outlook for the South African and global economy remained uncertain. It, however, remained optimistic owing to current signs suggesting that the US is emerging out of a recession and a growing Chinese demand for a range of commodities. Northam cautioned that despite these signs, the eurozone remained in debt.

Results for Northam showed an overall improved performance, especially against the background of a volatile labour relations climate in the South African mining sector. Operating profits increased by 20.6% during the year under review to R266 million; however, earnings declined to R35.60 a share compared to R51.80 in December 2011.

Zondereinde mine

Fewer disruptions from safety-related stoppages during the half-year at the Limpopo-based deep level mine resulted in a solid operating performance, with total tonnes milled increasing by 15.1% to 1.15 Mt compared to 998 598 t in the previous year.

Further, production of metals in concentrate increased by 6.5% to 4 889 kg compared to 4 592 kg in the previous year. Volumes of concentrates purchased, however, declined 29.4% from 1 010 kg to 713 kg owing to interruptions in smelting activities.

Northam said that a total of R221 million had been spent on capital towards the maintenance of operations during the year under review, including the development and equipping of 15 levels underground, along with the rebuild of the smelter and routine maintenance capital.

Booysendal mine

With production still anticipated to commence in the second half of the 2013 financial year, Northam says that much development has been achieved at its greenfield Booysendal mine.

The company revealed that 6 455 m of underground development has been completed, while development of the non-reef declines and footwall conveyor declines continues as mining sections are established on the upper levels of the mine. About 14 000 square metres of stoping has been completed and the surface stockpile contains about 320 000 t of ore.

Northam stated that construction of the concentrator plant is largely complete with current focus being on cold commissioning. Construction of the electrical substation has been completed and construction of the permanent power line resumed in October last year but progress has been slower than expected and is said to be completed during March 2013.

The construction of mine complex buildings continues and offices for management, a medical emergency building, a canteen and the gatehouse have been completed and handed over, while the construction of production and services offices, the training centre, control room and the human resources buildings are nearing completion.

The platinum miner noted that a total of R761.8 million had been spent in the current period on the continued development of the Booysendal mine and a further R937.8 million is yet to be spent in the six months till June 2013. The total project expenditure to date is R2.8 billion.

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