Royal Bafokeng Platinum achieves record PGM production

Royal Bafokeng Platinum in its Quarterly Review And Production Report For The Period 1 July To 30 September 2020 says that notwithstanding the impact of the COVID-19 pandemic on operations to date, the business achieved record 4E ounce production of 124.5koz for the reporting period on the back of improved BRPM operational performance, steady ramp-up progress at Styldrift, improved built-up head grades and consistent performance at the concentrators.

Total tonnes hoisted for the reporting period increased by 27.3% to 1 295kt whilst total tonnes milled increased by 15.6% to 1 158kt. For the year to date, total tonnes hoisted amounted to 3 083kt representing an 8.8% increase compared to the comparative 2019 reporting period. Total tonnes milled for the year to date were 2 782kt, resulting in the accumulation of 310kt of ROM ore in surface stocks.

BRPM

Total tonnes hoisted for the reporting period increased by 12.0% to 665kt whilst total tonnes milled reduced by 1.7% to 570kt, resulting in the accumulation of an additional 96kt in surface stocks. Closing surface stocks at the end of the reporting period are now estimated at 124kt.

Merensky tonnes milled for the quarter increased marginally by 0.7% to 417kt whilst reducing by 19.0% to 1 026kt for the year to date compared to 2019. The reduction in the year-to-date Merensky volumes is attributable to the combined impact of the shift to UG2 at South shaft and COVID-19 lockdown restrictions during the first half of the year.

UG2 tonnes milled for the quarter decreased by 7.8% to 153kt, whilst year-to-date tonnes milled increased by 7.8% to 458kt compared to 2019. UG2 volumes were 26.8% of tonnes milled for the quarter and 30.9% for the year to date.

The built-up head grade for the reporting period and year to date improved by 4.4% and 0.7% to 4.03g/t (4E) and 4.05g/t (4E), respectively.

STYLDRIFT

The key focus of the operations and project teams has been and will be to responsibly manage the project in the current COVID-19 environment and minimise the impact of the pandemic on the 230ktpm run rate milestone delivery.

Total tonnes hoisted for the reporting period amounted to 630kt equating to an average of 210ktpm and a 48.9% increase compared to the corresponding 2019 period. Total tonnes milled for the quarter increased by 39.3% to 588kt, with year-to-date milled volumes increasing by 10.1% to 1 298kt. Closing surface stocks are estimated at 186kt.

The built-up head grade at Styldrift continues to improve as the stoping tonnage contribution to overall tonnes increases in line with the ramp-up profile. The quarter-on-quarter and year-to-date built-up head grade improved by 7.1% and 5.3% to 3.92g/t (4E) and 3.96g/t (4E), respectively.

Notwithstanding the fact that the pandemic did impact the 2020 third quarter 230ktpm milestone, appropriate progress was made during the quarter with regard to the establishment of the remaining spare IMS sections and operational efficiency initiatives related to improved trackless mobile machine availability, minimising in-stope face to tip distances and artisan/operator upskilling programmes. We remain confident that the 230ktpm run rate milestone will be achieved during the fourth quarter or early in 2021.

CONCENTRATING

Total tonnes milled for the reporting period amounted to 1 158kt, representing a 15.6% increase compared to the corresponding 2019 period. Merensky and UG2 tonnes milled were 1 006kt and 153kt, respectively, with UG2 equating to 13% of total milled volumes. The BRPM concentrator treated 746kt, of which 42kt was UG2 (5.6%) and the Maseve concentrator treated 412kt, of which 112kt was UG2 (27%).

For the year to date, total tonnes milled decreased by 89kt or 3.1% to 2 782kt, with the lower performance being mainly attributable to the impact of COVID-19 lockdown restrictions on production.

The combined built-up head grade for the quarter and year to date improved by 5.3% and 2.6%, respectively, to 3.98g/t (4E) and 4.01g/t (4E). The improved head grades supported improvements in 4E recovery performances at both the BRPM and Maseve concentrators, with the quarter-on-quarter and year-to-date 4E recoveries improving by 1.7% and 0.3% to 84.03% and 83.19%, respectively.

The increased milled volumes, higher built-up head grade and associated improvement in recoveries achieved during the quarter, yielded 4E and platinum metals in concentrate increases of 23.8% and 23.6% to 124.5koz and 80.7koz, respectively.

The strong third quarter performance has partially offset the significant impact of COVID-19 lockdown restrictions on operations during the first half of the year, with 4E metals in concentrate production reflecting only a marginal reduction of 1.7koz (0.6%) to 298koz year to date compared to 2019.

Equivalent 4E and platinum metals in surface stocks are estimated at approximately 32koz and 20koz, respectively.

CASH OPERATING COSTS

Cash operating costs for the reporting period have increased by 23.0% to R1 861 million and 14.8% for the year to date to R4 757 million compared to 2019. The increase in expenditure is attributable to increased production volumes and industry-related inflation.

CAPITAL

Total capital expenditure for the reporting period increased by 20.9% to R456.7 million in line with project and operational stay-in-business (SIB) capital requirements. Expansion capital expenditure for the quarter increased by 10.6% to R274.9 million compared to 2019, with the increase in line with project schedule and construction progress at Styldrift, Maseve concentrator MF2 upgrade and tailings storage facility expansions.

FINANCIAL POSITION

As at 30 September 2020, the Company was in a net debt position of R376.3 million, compared to a net cash position of R701.8 million as at 30 June 2020. At the end of the quarter, RBPlat had approximately R1 800 million of banking facilities available with cash and cash equivalents on hand of R559.0 million.

COMPANY GUIDANCE

Notwithstanding the ongoing uncertainty around the COVID-19 pandemic with regard to duration, potential resurgence and associated operational impacts, guidance for the Group has been revised given the strong third quarter performance.

Group production guidance for 2020, is therefore upwardly revised to be between 3.80Mt and 3.95Mt at an estimated built-up head grade of 3.98g/t (4E), yielding 405koz to 420koz (4E) metals in concentrate. Unit cost guidance for the Group is forecast to be between R15 600 and R15 800 per 4E ounce (unadjusted).

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