Credit rating agency, GCR Ratings reaffirmed Northam Platinum’s national scale long-term and short-term credit ratings at A+(za) and A1(za), respectively, with the outlook stable.
The miner said the reaffirmation of its rating reflects the successful completion of major development activity at the Booysendal mine complex, as well as the company’s robust liquidity profile.
It said GCR noted that development risk had been cut with the Booysendal North and South mines attaining steady-state production and considerable progress on the Eland mine development being made.
Mining and production risk has also been reduced as a result of operational diversification.
“Moreover, with Booysendal being one of the lowest cost mines globally, and now accounting for half of Northam’s platinum group metal (PGM) production, the group is well positioned to withstand the current depressed PGM pricing environment,” said Northam.
“In addition, in the context of the currently depressed PGM price environment, GCR further notes that Northam’s liquidity profile is a key rating strength, as the group has prioritised securing sources of liquidity to ensure it can meet all capital and operating cash flow requirements over the medium-term, whilst ensuring that its gearing profile and capital structure remain robust.”
It said the stable outlook shows GCR’s expectation that Northam’s low-cost production profile and substantial access to liquidity will provide the necessary cash flows and financial flexibility to withstand the earnings pressures caused by the cyclical downturn in PGM prices.
Mathew Nyaungwa, Editor in Chief, Rough&Polished
