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NORTHAM PLATINUM HOLDINGS LIMITED NORTHAM PLATINUM LIMITED
Incorporated in the Republic of South Africa Incorporated in the Republic of South Africa
Registration number: 2020/905346/06 Registration number: 1977/003282/06
JSE share code: NPH JSE debt issuer code: NHMI
ISIN: ZAE000298253 Bond code: NHM016 Bond ISIN: ZAG000167750
("Northam Holdings" or, together with its subsidiaries, Bond code: NHM021 Bond ISIN: ZAG000181496
"Northam" or the "group") Bond code: NHM022 Bond ISIN: ZAG000190133
Bond code: NHM023 Bond ISIN: ZAG000190968
Bond code: NHM025 Bond ISIN: ZAG000195934
Bond code: NHM026 Bond ISIN: ZAG000195942
("Northam Platinum")
TRADING STATEMENT AND TRADING UPDATE FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Key metrics
' 3.7% increase in equivalent refined metal from own operations to 451 213 oz 4E (H1 F2024: 434 977 oz 4E), following a
strong performance from all mines, including a 15.1% increase in 4E metal in concentrate produced from own operations and
surface sources at Eland to 37 488 oz 4E (H1 F2024: 32 574 oz 4E).
' 2.5% decrease in refined metal produced to 425 151 oz 4E (H1 F2024: 436 178 oz 4E) due to the planned rebuild of furnace 2.
' 7.7% increase in group unit cash costs per equivalent refined 4E ounce to R25 381/oz 4E (H1 F2024: R23 562/oz 4E), reflecting
the impact of mining inflation and lower refined metal volumes during the first half of H1 F2025.
' 3.1% decrease in sales revenue to R14.5 billion (H1 F2024: R15.0 billion), primarily attributable to a 3.3% decrease in the
4E ZAR basket price to R23 457/oz 4E (H1 F2024: R24 269/oz 4E).
' 7.5% increase in chrome concentrate sales to 716 622 tonnes (H1 F2024: 666 692 tonnes).
' 55.2% decrease in operating profit to R1.1 billion (H1 F2024: R2.4 billion).
' 49.9% - 59.9% expected decrease in basic earnings per share.
' 44.7% - 54.7% expected decrease in headline earnings per share.
' Net debt as at 31 December 2024 of R6.1 billion with a net debt to EBITDA ratio of 1.26.
' R12.3 billion fully undrawn and available banking facilities.
Introduction
In terms of paragraph 3.4(b) of the JSE Limited Listings Requirements, companies are required to publish a trading statement as
soon as they are satisfied, with a reasonable degree of certainty, that the financial results for the current reporting period will differ
by at least 20% from the financial results of the previous corresponding period.
Northam Holdings' financial results for the six-months ended 31 December 2024 ("H1 F2025") are underpinned by a solid production
performance. Notwithstanding this, Northam Holdings expects to report a decrease in basic and headline earnings per share for
H1 F2025 compared to the previous six-months ended 31 December 2023 ("H1 F2024").
The table below provides key earnings per share information for H1 F2025, compared to that of H1 F2024:
H1 F2025 H1 F2024 % Variance
Basic earnings per share (cents) 54.7 ' 68.4 136.5 (59.9 ' 49.9)
Headline earnings per share (cents) 55.0 ' 67.1 121.4 (54.7 ' 44.7)
Number of shares in issue including treasury shares 396 238 229 396 238 229 0.0
Weighted average number of shares in issue* 389 859 874 390 090 148 (0.1)
*The weighted average number of shares in issue has been used to determine the basic and headline earnings per share.
Safety
The group's overall safety performance improved, with the total injury incidence rate ("TIIR") expressed per every 200 000 hours
worked recorded at 1.08 (H1 F2024: 1.35).
However, we sadly lost two of our employees in separate incidents at Eland mine. On 5 August 2024, Mr Aubrey Katlego Sithole, a
shotcrete assistant, passed away in a barring incident which occurred during shotcreting operations in a development tunnel and on
29 November 2024, Mr Koshi Charles Makhobo, an engineering fitter, was fatally injured whilst undertaking maintenance on a
conveyor belt.
The safety of all of our employees remains of utmost importance and takes precedence over any production, operational or financial
objectives.
Improving safety performance, as well as the health and wellness of our workforce, remain critical focus areas for the business.
Production
The first half of F2025 has seen further progress towards the group's strategic goals of growing safe and sustainable production
down the industry cost curve.
Challenges remain, particularly in respect of metal prices, mining and energy cost inflation and the potential for Eskom load
curtailment events. The tragedy of two fatalities during the period also demonstrates the potential for serious accidents, which remains
an inherent ongoing risk.
Our growth programme remains on track, despite temporary pauses to specific project modules which do not have a detrimental
impact on the overall objectives. These pauses represent appropriate management interventions to preserve liquidity whilst low
Platinum Group Metal ("PGM") prices persist.
Our strategy of counter-cyclical growth and operational resilience pursued over the past decade has established a competitive and
sustainable production base which is able to withstand medium to long-term cyclical downturns, including current market conditions.
This strategic approach remains a differentiating factor for Northam.
A key feature of the period is the steady and robust production volumes delivered by all operations. Zondereinde benefitted from
focussed Merensky stoping in the Western extension, together with logistical decongestion resulting from the ongoing shift in
UG2 stoping from the western to the higher yielding eastern portions of the mine. Booysendal has reached its steady state production
profile and is now focussing on productivity and efficiency gains, whilst Eland continues to ramp-up on schedule.
The group's equivalent refined metal from own operations increased by 3.7% to 451 213 oz 4E (H1 F2024: 434 977 oz 4E). Strong
production growth was recorded at Eland, despite safety stoppages. Zondereinde achieved marginal production improvements,
ahead of commissioning 3 shaft and despite an Eskom power outage during November 2024. Booysendal production also improved
as a result of productivity gains. These achievements continue to demonstrate the quality of our operations and orebodies.
Group production of chrome concentrate increased by 7.5% to 716 622 tonnes (H1 F2024: 666 692 tonnes), as a result of
improvements in UG2 tonnage throughput, feed grades and concentrator yields, and a notable increase at Eland.
Mining tonnages and grades across the group are expected to improve further over the coming two years upon our growth and
innovation projects reaching completion and achieving their planned targets. These improvements, together with an expected
increase in mineable reserves, will provide important additional operational flexibility.
Key production metrics for H1 F2025, compared to H1 F2024, are as follows (in oz 4E):
H1 F2025 H1 F2024 % Variance
Equivalent refined metal production from own operations at Zondereinde 165 076 160 188 3.1
Concentrate production from own operations at Booysendal 256 759 250 004 2.7
Concentrate production from own operations and surface sources at Eland 37 488 32 574 15.1
Total equivalent refined metal production from own operations 451 213 434 977 3.7
Unit cash costs
The increase in unit cash costs across the group was restricted to 7.7%, averaging R25 381/oz 4E (H1 F2024: R23 562/oz 4E). This
was primarily the result of increased mining production, improved concentrator feed grades and improved concentrator recoveries.
Unit cash costs increased at Zondereinde by 8.0% to R26 752/oz 4E, at Booysendal by 7.0% to R18 383/oz 4E, and at Eland by
6.1% to R35 711/oz 4E.
Unit cash costs per 4E ounce for the group, and per operation, are as follows (in R/4E oz):
H1 F2025 H1 F2024 % Variance
Zondereinde cash cost per equivalent refined 4E ounce 26 752 24 778 (8.0)
Booysendal cash cost per 4E ounce in concentrate produced 18 383 17 173 (7.0)
Eland cash cost per 4E ounce in concentrate produced 35 711 33 652 (6.1)
Group cash cost per equivalent refined 4E ounce 25 381 23 562 (7.7)
Sales revenue
Sales revenue amounted to R14.5 billion, a decrease of 3.1% (H1 F2024: R15.0 billion).
This is predominantly attributable to a 3.3% decrease in the 4E ZAR basket price to R23 457/oz 4E (H1 F2024: R24 269/oz 4E),
resulting mainly from a decrease in the average ZAR/USD exchange rate achieved, i.e. a stronger Rand, of R17.92/USD
(H1 F2024: R18.64/USD), together with the impact of the planned furnace rebuild.
The rebuild of furnace 2 was scheduled to minimise the impact on refined metal production during both the previous financial year as
well as the current financial year. As a result, sales for F2025 will be lopsided, with the full year forecast estimated at between
980 000 and 1 020 000 4E ounces of equivalent refined metal.
The benefits from the full mine to market value chain in respect of chrome is clear. For H1 F2025, 716 622 tonnes of
chrome concentrate was sold (H1 F2024: 666 692 tonnes), contributing 12.5% or R1.8 billion to total revenue. During the last quarter
of calendar year 2024, stainless steel margins came under renewed pressure, which, coupled with ferrochrome oversupply, prompted
stainless steel producers to reduce ferrochrome purchases, which in turn led to a decline in chrome ore prices towards the end of the
period.
The current weakness in PGM prices continues to place significant pressure on revenue and therefore profitability.
Total revenue per equivalent refined 4E ounce sold decreased by 2.9% to R31 835/oz 4E (H1 F2024: R32 785/oz 4E).
The table below summarises metal volumes dispatched to the group's precious metal refiners, compared to metal volumes refined
and sold, together with the average USD sales prices achieved (expressed per metal and on a 4E basis) during H1 F2025:
Total
equivalent
refined metal
Total refined sold (including Average sales
metal the sale of prices
Dispatched produced concentrate) achieved
oz oz oz USD/oz
Platinum 272 259 257 860 276 796 953
Palladium 131 632 124 186 132 989 982
Rhodium 44 245 38 544 42 102 4 545
Gold 4 787 4 561 4 657 2 579
Total 4E 452 923 425 151 456 544 1 309
Included in total equivalent refined metal sold is concentrate sold to a third party to honour legacy offtake agreements relating to the
Everest and Maroelabult operations, which contained 37 341 oz 4E in concentrate (H1 F2024: 24 497 oz 4E). Refined metal sold to
the group's customers totalled 420 232 oz 4E (H1 F2024: 433 535 oz 4E).
Financial results
Sales revenue decreased by 3.1% to R14.5 billion, whilst cost of sales increased by 6.9% to R13.4 billion. This resulted in an
operating profit of R1.1 billion (H1 F2024: R2.4 billion), and an operating profit margin of 7.5% (H1 F2024: 16.1%).
We operate a largely fixed cost business and consider increasing production, and doing so efficiently, to be our best defence against
current global inflationary pressures and persistent weak metal prices. Our capital allocation and treasury decisions have been guided
by our growth strategy and our results have benefitted from our consistent approach to growing our production base down the industry
cost curve.
Earnings before interest, taxation, depreciation and amortisation ("EBITDA") amounted to R1.8 billion (H1 F2024: R3.2 billion).
Metal inventory on hand increased to 529 825 oz 4E, as a result of the impact of the planned furnace rebuild, with a Rand carrying
value of R9.2 billion and a sales value of R15.1 billion when applying the 4E price and exchange rate as at the end of December 2024.
Our operations generated cash to the value of R419.2 million (before cash capital expenditure of R2.4 billion), impacted by negative
working capital movements amounting to R1.2 billion relating to a build-up of inventory and the settlement of trade and other payables,
before the December 2024 close.
In addition, the group paid R272.9 million in dividends and settled Domestic Medium Term Notes ("DMTNs") upon maturity and finance costs to the value of R1.2 billion.
As at 31 December 2024, the gross cash balance amounted to R4.0 billion.
During the period under review, Northam increased its existing revolving credit facility ("RCF") from R10.0 billion to R11.3 billion
("RCF Increase"). Northam proactively implemented the RCF Increase to further enhance liquidity and balance sheet flexibility in
light of the current weak PGM pricing environment, and in the event that these circumstances prevail for a sustained period of time.
Northam's total available banking facilities now amount to R12.3 billion, comprising the RCF of R11.3 billion and existing general
banking facilities ("GBF") of R1.0 billion. Both these facilities remain undrawn.
Capital expenditure
Capital expenditure of R2.4 billion related to significant activity on the Western extension project at Zondereinde, the ongoing ramp-
up at Eland, and mining fleet purchases and concentrator upgrades at Booysendal South. Further development activity at
Zondereinde and Eland is planned for the 2025 calendar year.
At Zondereinde mine, stoping is ramping-up within the Western extension section. Equipping of 3 shaft for personnel and material
transport, as well as the provision of services, is in progress. This includes the establishment of the intermediate pumping chamber,
which is a key milestone. Reaming of 3a ventilation shaft also continues. Both shafts are scheduled for commissioning at the end of
the 2025 calendar year. This will deliver efficiency benefits to mining in the Western extension section. Pilot drilling of 3b rock hoisting
shaft is complete, reaming will commence, with shaft commissioning scheduled for the 2028 calendar year.
At the group's metallurgical facilities, upgrades to the base metal removal plant are progressing well and the expanded and upgraded
furnace slag concentrator will soon start to improve overall metal recovery. The planned rebuild of furnace 2, which commenced
during May 2024, was completed on schedule in August 2024.
At Booysendal, all mining modules are operating at steady state levels. Decline development is continuing in order to increase
mineable reserves and enhance operational flexibility.
At Eland mine, processing of ore from surface sources continues, whilst ore production from underground mining ramps up, with an
increase in stoping crews operating ahead of production and consequently impacting unit cash costs, circumstances that will
normalise over the coming two years. Development of the decline system was resumed after a temporary pause, as part of a capital
trimming exercise, and a planned reconfiguration of the mine's ventilation circuit towards the end of the current financial year will
contribute positively towards accelerated decline development rates from F2026 onwards. A new 4.5 metre diameter raise-bored
ventilation shaft has significantly improved environmental conditions, particularly in the deeper sections of the mine that are critical
to the medium-term ramp-up and facilitated the planned ventilation reconfiguration. Focus remains on strike and raise development,
in order to increase mineable reserves. Underground stoping ramp-up continues on track. This is yielding meaningful increases in
own 4E metal production.
Enhancements to the PGM and chrome concentrator circuits at each of the mines are starting to generate low-risk and profitable
improvements in metal recoveries.
Capital expenditure for the remainder of F2025 is estimated at R2.2 billion, with the bulk being invested in focussed growth
programmes.
The development of an 80 MW solar power facility at Zondereinde is in progress, in collaboration with an Independent Power Producer
through a Power Purchase Agreement. Power will be supplied behind the Eskom meter and will thus not be subject to load curtailment
events. Construction has commenced, and commissioning is scheduled midway through F2026. Once operational, the facility will
improve security of power supply, whilst reducing energy costs and the mine's carbon footprint.
Conclusion
Commodity markets are known for their cyclicality. The current outlook for global PGM demand and supply remains uncertain which
in turn results in an uncertain outlook for PGM prices. A raft of global geopolitical and macro-economic issues have the potential to
cause further disruption to the PGM markets and metal prices, whilst the possibility of Eskom load curtailment events could lead to
additional operational disruption and challenges. We continue to monitor the market and are confident that our recently commissioned
additional on-demand self-generation capacity units at all our operations will significantly contribute towards mitigating risks
associated with load curtailment events.
The prevailing low PGM price environment is constraining earnings across the entire PGM sector. The sector's ability to respond to
lower PGM prices by suspending or reducing costs is limited, as the majority of mining costs are fixed in nature. This is consequently
constraining cash generation across the sector, requiring ever more prudent management of liquidity.
The following factors have been considered as part of the liquidity management of the group:
' The group's growth strategy is focussed on growing production down the industry cost curve by developing shallow,
mechanisable orebodies. Our programme of optimising existing operations continues and remains on track. We have utilised
our balance sheet to grow the business and the project pipeline has been funded through cash generated by our operations, as
well as the utilisation of our banking facilities and our R15.0 billion DMTN Programme.
' The staggered maturity profile of Northam's DMTN Programme provides an additional degree of certainty and flexibility to prudent
cash flow management. Northam has proactively managed its DMTN Programme's maturity profile to appropriately match the
production growth build-up, and therefore the expected cash generation capacity of the group. Furthermore, the maturity profile
has been staggered over a number of years to enhance and protect our liquidity position through metal price cycles.
' The group's available banking facilities amount to R12.3 billion, comprising an R11.3 billion RCF and a R1.0 billion GBF. These
facilities remain fully undrawn.
' Should market conditions deteriorate, adjustments will be made to the group's expansionary capital expenditure, if necessary,
to preserve liquidity.
In light of the prevailing market uncertainty, Northam remains internally focussed and places full emphasis on operational excellence,
particularly surrounding safe, sustainable production, and efficient mining at the right cost. Cash generation and preservation remain
particular focus areas.
Relative positioning on the industry cost curve, and the ability to retain operational flexibility and balance sheet strength, remain a
key differentiator for the group.
The financial information contained in this announcement is the responsibility of the board of directors of Northam Holdings and has
not been reviewed or reported on by Northam Holdings' auditors, PricewaterhouseCoopers Incorporated. The reviewed results
for Northam Holdings for H1 F2025 are expected to be published on or about Friday, 28 February 2025.
Johannesburg
12 February 2025
Corporate Advisor and Sponsor to Northam Holdings
One Capital
Corporate Advisor and Debt Sponsor to Northam Platinum
One Capital
Date: 12-02-2025 05:00:00
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