Good afternoon, everybody. It's Paul Dunne speaking, CEO of Northam Platinum. Alet Coetzee, the CFO of Northam Platinum. Damian Smith, amongst other things, is the chief geologist of Northam Platinum, which is particularly relevant, given our M&A strategy. Welcome to the Round Table, the media round table, and welcome to everybody on the lines. I've got Felix and Ed in the room with me, and I'm not so sure who's on the line, so I'd like to ask who are we speaking to, if that's okay. Dineo?
Dineo.
Dineo is on the... Jena?
Yes, sir.
Okay. Thank you. All right. A very broad introduction 'cause I don't think you wanna listen to me, you wanna ask the questions. It's a good set of results. You will have seen the presentation, be very pleased. It's the counter cyclical growth strategy of Northam is clearly demonstrated in quite a large lift in profit. You will have seen that we have now completed the purchase of the 34 and a little bit percent of RBP is paid for. Obviously, that might be a subject of questioning. The markets are also tough at the moment. There's a heavy uncertainty reflected probably best of all in the American and European banking systems, which are jittery. Prices for our metals have come off.
In the period gone, we enjoyed ZAR 80,000 for platinum ounce was the all revenue divided by platinum ounces. That's how we express it, and that this morning is down to ZAR 66,000 for platinum ounce. I think that is quite relevant. The project work is going reasonably okay. We're excited about 3 Shaft, Eland and Booysendal South, which are the three flagship projects that we have under our wing. On that point is very quick and I don't wanna talk too much. I'd rather go straight to the questions, and then we'll talk more from there. I can address questions to me or Damian or Alet as you wish. Let's go to Felix first. I can see Felix is itchy there.
Yeah. Thank you, Paul.
Sorry. Felix, you're on mute.
Thank you so much. I just wondered you'd shed a bit more color on what you said earlier, with regards to the relationship with Impala and, you know, you said you have very much a lot in common. Could you maybe explain what that means? Is there a possibility of a joint venture at RBPlat as an outcome of this process?
I think what I was trying to say there is that, you know, it has been portrayed a little bit of a boxing match, you know. Unfortunately, we can't always talk all the time. Neither parties can talk all the time because it's a highly regulated environment and there's only so much we can say. You know, the narrative has been a boxing match, and that is probably, in the first instance, a fair, a fair assessment of it. We're both fighting over a very valuable asset. You know, personally, I don't see it as fighting each other. I see it as fighting over the asset. It's a slight distinction.
The point I was trying to make about having a lot in common with Impala, we are both South African miners and both very accomplished mining people, and we respect them. That's what I was trying to say. The in common bit is that we have similar people, similar cultures, similar, we are similar corporates in many respects. The last part of your question, I will answer it as best I can, pretty much the same as I've just said. It is our job to keep all options open as long as possible for the company and its shareholders. In this case, of course, I'm talking about our company and our shareholders.
It's our job, and this is what we've been all along, is to keep all options open.
The options, if you can maybe elaborate on them or what exactly are the options? Is it JV? Northam, can you gain control or are these other considerations now?
Okay.
Because all along we're under the impressions that Northam wants to gain control. You want to gain control.
Yeah. We've reiterated that. We have reiterated that in the room there. We would like to gain control of the asset, clearly. So would Implats, and again, clearly for them. That's certainly both of those options are possibilities. Implats gains control, we get gain control. There are other possibilities, that's for sure. We keep them open. That's the point we're making. We certainly not, you know... I made my point very, very clearly. We respect Impala. If Impala and Northam remain as large shareholders of that asset, I think both companies have a lot of value to bring to bear on that ore body.
The ore body, I think, I know I've said this in the room, but just to reiterate, this is a very large shallow ore body. There is tremendous inherent value in the ore body. The quality and quantity of the ore body determines future outcomes. Royal Bafokeng Platinum controls a big piece of the Western Bushveld, as yet not fully exploited.
Sorry, again, just a follow-up. Paul also as a consequence of not getting a lot of, you know, opportunities to talk to you throughout the period. What you're saying is, if Northam doesn't gain control, you would still want to be, you know, part of RBPlat even as a minority shareholder? Is that what you're saying?
Felix, the way I'd answer that question, we're not a seller. We're not a seller. There's too much value. There's too much future value here.
Okay.
Thanks. Hi. Ed Stoddard with Daily Maverick. Just what you were saying there, Bud, is I take it, that the ore body obviously lends itself easily to mechanization, I think?
Yes. Ed, the Styldrift portion of the ore body, you will know, if there's a tale of two cities there. There's the older mine. I don't want to call it an old mine because it's not that old. It only began in the mid-1990s actually. People would refer that mine as Boskoppie if you're old fashioned or BRPM, that is the old mine. That mine consists of shafts south and north. There are two shaft systems there. They are declines, by the way. That's one mine. North and south shaft is Boskoppie or BRPM. It's the more mature mine. That's the best way of saying it. A bit like you yourself, Ed, are more mature. The other mine is Styldrift, and Styldrift is a very large ore body.
To put numbers to it, of the 68 million ounces, and Damian correct me if I'm wrong, 50 of those ounces, and he's nodding his head. 50 of those ounces, 50 million ounces are situated in the Styldrift block. 50 million ounces. The remaining 18 million ounces are in the more mature mine. Can you see how large the Styldrift block is? This is why it's important. The value of the company is the asset. It's the ore body, and it's very, very large. Styldrift I, as it is sometimes referred to, is in its infancy. It's only really just been commissioned, to be honest. you know, you've got a very, very large block of ground there with a brand new shaft that has been paid for.
You heard me say to build that shaft today will cost you about ZAR 25 billion, in our view today. You have to build it today. It's brand new, and you've got this very large ore body which will accommodate more than just Styldrift I because it's so big. There's a lot of future value. This is perhaps why, you know, perhaps sometimes, our motivation is missed. I'll make it very, very clear. We value the ore body. It's an excellent ore body. It's well understood. It was drilled by Anglo Platinum, the best in the business. Those ounces are there, and they're very shallow in our context. Again, to reiterate, would you rather be mining at 3.3 kilometers as Zondereinde, or would you like to mine at 600 meters below surface at Styldrift?
I know which one I would pick, it's fully mechanizable as you point out.
Just to-
Just-
Just to make the point.
Can you take the mic now, Damien?
Just to make the point that the Styldrift 50 million ounces is mechanizable. The more mature mine, BRPM, is a conventional mine, essentially it's a new mine because it was built, as Paul said, back in the 1990s to mine Merensky Reef. They're now converting that mine to mine the UG2 Reef, which has been untouched to date. The benefits of that is that that mine has developed out to its boundaries. All the tunnels are in. All they need to do is mine ore from the stops. You'll see the benefits of that coming through in RBPlat's numbers as they're reported, that they're seeing very good productivity from BRPM and they're seeing very good cost outcomes.
Styldrift, the mechanized mine, is the mine that we think we can add significant value to our mechanized experience we've developed at Booysendal over the last 10 years.
We see this as, to some extent, not completely true what I'm going to say now, but it's all you can think about it as a virgin ore body to a large extent. The UG2, BRPM and the whole of the Styldrift ore body is pretty much a virgin ore body. It's only just begun to mine. In the context of depletion across the rest of the industry, you saw our depletion curves. There's rapid depletion happening in the older portion of the Bushveld. You can't mine the same ground forever. Shafts ultimately close. This is what is happening. Shafts are closing through natural processes, not forced closure. The ore body is exhausted. When your ore body is exhausted, you cap and close the mine.
That is what is happening in the Western Limb, the older portion of the Western Limb. That reduces ounces to the rest of the world. According to our graphs, as you've seen, those graphs are well-researched by our geologists, well put together. In the face of depletion, you have this, what I would call a lovely piece of the Bushveld. For in colloquial, in sort of northern terms, if you are northern language to, you know, it's a lovely piece of ground. It's a pink diamond, actually, to be frank about it, and pink diamonds are very rare.
Just on that, note, looking at your graphs and seeing a very significant drop in PGM supply and production by 2040, that's in 17 years' time.
Where could ounces come from beyond that? Because there are only, you know, there's South Africa, Zimbabwe, Russia, Stillwater, Canada, a bit Finland. People talk about there being PGMs in Antarctica, but that's off-limits until 2048 when a certain treaty expires, and then we'll see after that. I mean, I'm just wondering where would PGMs come from then? What do you think, it's a long way out, but what would be demand for PGMs by then, given, you know, the EV revelation and things like that, expectations around that?
But, but-
I know it's a big question, so.
Yeah. I'll take the second bit. I don't need that, thanks. I'll take the second bit. Like Damian talked... Damian, remember, is a geologist, a very experienced geologist. He knows the PGM industry inside out. To begin with, there are only fou countries in the world that you can get PGMs from in the first place, so on that basis.
That's correct. South Africa, Zimbabwe, Russia, and Canada, USA. That's it.
Five.
It's five, but it's four.
Yeah, good.
We like to round down. If you look at that spread, it's dominated by the Bushveld. 75% of global resources housed in the Bushveld. 80% of global supply. If you look at rhodium that's quite pertinent at the moment, 90% of all rhodium mined in South Africa. South Africa is the key to ongoing supply into the long future of PGMs. There are resources in the ground. Many millions of ounces sitting in the ground which are untouched. The deeper resources and the more challenging resources, as Paul was mentioning in his results presentation just now, barriers to entry to produce from those resource ounces are growing all of the time. The time to build new mines is extensive.
We're just at the point of getting to steady state in our Booysendal South operation. That is about as quick as you can start a mine. We started from outcrop at Booysendal South. When did we start that, Paul? 2015. It's 2022, seven years. It went like a flash, but it's seven years. If you wake up tomorrow and say you wanna build a mine, you're looking at something like 2030 before you've got a chance of producing significant ounces into the market. That work must be done if we, if we're gonna bridge that gap, if we're gonna flatten the depletion curve that you see. As a consequence of that depletion curve, and maybe Paul will talk to the continued demand for metals that we see into the future, it has to have an impact on price.
If price is affected positively, there's more incentive for people to build new mines. It takes money, and it takes a lot of time, and it takes a lot of expertise.
You know, strangely enough, I would say the time is more valuable than the money. You know, capital across the world is available, but time for the miner. We tried to make the point, this also applies to a copper miner. Electrification of the world, the decarbonization of the world requires huge amounts of copper. There's simply not enough mines being built today to satisfy that demand. It's exactly the same in our business, in our point of view. This is a common problem in mining. We're not the most popular sector in the world. We are, you know, somewhat, you know, considered as people who dig holes in the ground very simplistically. It's a highly complex undertaking. It's capital intensive, and it takes a huge amount of time to bring a mine to book.
Coming back to Styldrift now and the greater BRPM, we've got a brand-new mine that has been built and paid for in a very large ore body, and this is why it has inherent value. It's the inherent value that attracts Northam. There are very few of these opportunities left at that depth, you know, from zero to 1,000 meters in the Bushveld.
That magnitude, the scale of the 68 million ounces at Styldrift, which could yield 45 million ounces of saleable metal at a current production rate of 450,000 ounces, or 445 million ounces could be extracted from Styldrift over time, and they're currently producing about 450,000 ounces per annum. That mine, at that rate, could operate for the next 100 years, or it could operate at a higher rate. You see, there's metal in the ground, but people need to apply capital, and they need to apply expertise to that to bring it to book.
Maybe just to add to what Damian has said, you need a board with foresight and who looks at the long term of the company and not just sort of the next six to 12 months. 'Cause you're going to have an extensive period where you're spending a lot of capital to develop that mine, but not necessarily getting the benefit. You need a board with long-term views on PGMs to actually almost wanna say, to be brave enough to make that decision, to say, "Let's go".
You know, sometimes for miners, and again, generalizing to the broader mining community, there is a clear mismatch in timing here. It's natural. I'm not saying there's something wrong here. The investment community has a shorter investment timeline inherently than a mining company. We are very long thinkers and very long doers. You know, and unfortunately, in a way, it's our cross to bear as miners. It's a hard job. To convince the investment community of something that might happen in 10 years' time. That's mine.
That maybe explain why we are in such a situation where, I mean, because of this is already developed, these are already developed assets, and it's also mechanized.
Yeah.
Why there's such a boxing match to use your own words.
Yes. Yeah, I think that's exactly right, Felix. We see it as natural competition. Competition is healthy. Yes, it creates a lot of excitement, and we accept that, but it is a natural competition. There's only one of these pink diamonds in that area. Both companies want it, both companies value it, and we're gonna fight for it, in the corporate sense. Please don't think we're boxing literally, as you know. I know you-
The ball in the wish file.
Yeah. I like that.
Yeah, I can see it's on already.
When is this boxing, you know, going to end? I'm asking this because, when RBPlat released their results, I mean, they were quite clear that they starting to feel the impact of this. They say the prolonged cooperation.
Yeah. I accept that, Felix.
Are you convinced that this is something that needs to come to an end?
Yes. I think I would share that concern. I mean, one can imagine that if you're the subject of the, of the battle or the fight, you know, you're the one that people are fighting over, let's say, fighting again in the corporate sense. Please don't misquote me on that. you know, it's gonna create uncertainty, as it does in the investment community. It's the nature of what it is. We will endeavor to minimize that uncertainty as best we can, but of course, everything is not in our control. There is a third party as well. Impala might think the same. I'm not gonna... please don't quote me on Impala, they will give you their own views. but, yes, it's, it's gone on a long time. I think that's a fair comment.
The reason also it's gone on a long time is because it's a tough fight. The reason it's a tough fight, it's a valuable asset. It keeps coming. We must keep bringing it back to the asset. That's what it's all about. It's the ounces in the ground. They simply do not exist at that quality and that depth anywhere else. For available for sale, of course. Yeah.
Just last question, Paul, if you can just bear with me. The circular is going to come out at the end of April. What sense are you getting from shareholders, your investors, you know, what's their feeling around the offer when it comes out?
We've been in a closed period until today. We will go on the roadshow in the coming probably three weeks we'll be on the road. We'll listen to the shareholders at that time.
Any other questions? Maybe we need to go to online. I see Lisa Steyn on the line. Lisa, do you have your question?
Of course.
Good morning, Lisa. Good afternoon. Good afternoon, Lisa.
Hi. Can you hear me?
Yes, clearly.
Thanks. Yeah, just talking about time, timelines, I mean... You've spoken to the fact that you sort of appreciate that it's a problem for RBPlat and that it is going on for long. Is there any impact on Northam? I mean, how long can this go on? We've heard Implat saying, you know, at some point they're gonna have to potentially look at other options. I mean, for Northam, is there a sort of deadline? A cutoff?
Yeah. Probably the best way to answer that one, Lisa, is we've not even opened our account yet. The account opens on the issuance of the circular. You know, we sort of been from our process point of view, we're at the beginning rather than the end.
Okay, thanks. The complaints that you lodged with the TRP, I suppose we all just sort of making our own assumptions around the strategy. I mean, was that intended to frustrate Impala's offer process? Could you comment on that?
The TRP has already ruled, Lisa, some time ago. I mean, that is a public document. You can. You know, the TRP has a website. You can read out the find. You know, the TRP has ruled some time ago. Which is pretty clear, by the way. Really clear.
Okay.
I would really encourage you to read the TRP judgment.
Okay.
Yeah.
Just on the PIC, there's a sense that they are. I mean, at one point they weren't going to sell to anyone, or at least that's what Bloomberg reported. Implats are saying that they are going to make a decision. From where you sit and your engagements with PIC, is their shareholding still up for grabs for yourselves?
We've been informed by the PIC in writing that at this point in time, they are not sellers.
Okay. All right. Thank you.
I mean, that's what Lisa, I just want to. Again, it's not for me to quote the PIC, but our understanding is, at this stage, the PIC are not sellers. I can't say they won't change their mind, but that's our understanding.
Okay. Thank you.
Thank you. The next question we have is from Dineo Faku from Sunday Times.
Hello.
Good afternoon, Dineo. Hello, Dineo.
Hello.
Hi.
Thank you. I'm just wanting to ask you maybe if you can reflect on the performance of the share price today, and also you talked about the seven-day week. How will it work, and will there be any plans to move it to other operations as well?
Dineo, I haven't seen the share price today. It is down. Ed is just showing me. you know, it's a one-day share price movement. We don't really comment on those things. You need to give it time.
Seven-day working week.
No, no. The answer to the second part of the question is no. It's specifically to secure and retain mechanized skills, and we don't have mechanized skills at Zondereinde. Not elsewhere, no.
All right, thank you.
If I understand the question correctly.
Thank you.
Do we have any further?
The final question we have is from David McKay from Miningmx.
Afternoon, David.
Hi. Hi. Thanks for the opportunity. Paul, I mean, last year you were quite, let's say, assertive in saying that you were desirous to control this asset, and now you seem to be talking up a little bit more the optionality of a joint venture. I mean, that sounds quite conciliatory. What's changed?
Yeah, David, I must just stress we still desire to control the asset, but we will keep all options on the table.
I mean, yeah, are you concerned, you know, of Impala coming back with that? They've got deeper pockets than you, I think it's fair to say. Are you concerned they come back with a matching offer? If they were to do so, what do you do? What's the plan?
Concerned is probably the wrong word, but Impala are a bigger company than we are, that's for sure, both in physical size and in resources. You're quite right about that. Our actions and options will not really be based on that. We will do the best for the Northam shareholders and Northam as a company. That's our drive on this thing. We will get the best outcome for Northam and Northam shareholders. You can be sure of that. That's the way we've behaved all along, is to make sure that Northam is protected, its shareholders are protected, and we want to secure as much of this asset as we can, and we would prefer to control it, and that remains.
In the event of a joint venture, who can, you know, who makes the final decisions? Whoever has the highest stake?
Well, yeah.
Well, maybe I can talk around generally. Generally, if there's a joint venture, there would be a shareholders agreement governing the terms and conditions, how you actually manage a JV like that. There will be a strict sort of agreement in place on how you manage day-to-day operations. There will be a steering committee that decides etc. with number of members. It will be properly run if one should have a JV. I mean, a lot of mining companies have these JVs, and they work very well over the years.
They do. I just note in your intention to make an offer, you do reserve the right to increase the cash elements of the offer. I wanna go back to the previous question I asked about whether you would enter into a further bidding war. Now, is that why that provision is there?
I think there is no bidding war. That's a misrepresentation. Impala has a price, and we have a price, and those prices have not changed.
If they make a matching offer, come back to what do you do, is that provision there in order that you actually can respond?
We'll deal with that when we see it, David. I can't comment on it. It's very dangerous for me to comment on that.
All right. Okay, just last question. Just in terms of developing Styldrift II, you kinda have dangled that as a carrot. It's definitely what Impala want to do from their next door infrastructure. How do you mine Styldrift II in the event that Impala sells into your offer and steps away from the asset? How do you mine it in such a way that you get a return?
The Styldrift II is very similar to 3 Shaft at Zondereinde . It's a, you know, an extension of an existing mine. We would use the raise bore technique to create the same Shaft system as we've done or similar Shaft system that we've done at Zondereinde. You know, it's technically proven what we would do. You'd mine it
The cost?
The next extension of Styldrift One, yeah.
Yeah. Okay. You're confident you'd get a return on that project?
Absolutely, yeah. The quality of the ore body is. I can't stress how good that ore body is. It's a top-class ore body. Ore bodies are all relative, remember. You know, if you got a better ore body than a worse ore body, you'll get worse unit cost outcomes on the worse ore body than you would on a better ore body. Again, you know, my language there wasn't great. You understand what I'm saying.
Gotcha. Okay. Thanks, Paul. Thanks.
Let me say it in a nice way. The quantity and quality of ore body in your cupboard determines your future commercial outcomes, including unit cost of production and therefore profitability.
Thanks, Paul. It's clear. Thank you.
Thanks, David. On my English now. Okay, thanks very much, everybody. We've still got a few minutes, but I think if we can close down the line at least. Is everybody happy and we can relax?
We can relax.
Thank you. Thank you. Thanks, everybody. Thank you, everybody on the lines. Appreciate it.
Thank you.