JOHANNESBURG - Royal Bafokeng Platinum (RBPlat) rose nearly 5percent on the JSE yesterday after the platinum group metals company deferred R400million in capital expenditure and announced the withdrawal of its 2020 production guidance due to uncertainty over the impact of the coronavirus pandemic on its business.
The Johannesburg-headquartered group said that the decision followed a review aimed at identifying non-critical items that could be deferred without impacting the operational flexibility.
RBPlat said it withdrew the guidance after it lost 46300 ounces of underground production during the extended national lockdown.
“Given these dynamics, RBPlat withdraws its previously stated 2020 guidance to the market,” it said.
The company previously forecast a production crease of between 4.2million tons and 4.5million tons at a 4E built-up head grade of 4 grams per ton, yielding 485000 ounces 4E metals in concentrate for 2020.
It said group capital expenditure for the period, including escalation and contingencies, was forecast to be about R1.8billion.
“We will continue to actively monitor developments and provide an update when we have greater clarity,” the company said.
It also said that Eskom load curtailment, the national lockdown requirements, and lower built-up head grade negatively impacted unit cash costs, with cost per ton milled and 4E ounce increasing by 17.5percent and 21.4percent to R1.53bn and R13952, respectively.
RBPlat said that it had implemented cash preservation measures to ensure that it was flexible to respond to continuous changes, including a decision by executives and senior management to waive 33percent of their salaries during the lockdown period as a gesture of goodwill.
“A key aspect of the plan is the reduction in our controllable fixed costs, especially during lockdown periods or other periods during which production is restricted,” said the company. RBPlat, whose operations include the Styldrift mine, also said that shift allowances, production bonuses and other variable payments had been curtailed.
The group said that its mining and concentrating operations were being restarted. “There are further uncertainties with respect to the ongoing impact of Covid-19 both domestically and internationally, the timing and nature of further government announcements, and the ability of suppliers of equipment, spares and consumables to deliver and support mining operations,” the company said.
RBPlat shares closed 4.13percent higher at R34.55.