Northam finalises Eland platinum mine deal

Northam’s acquisition of the Eland platinum mine (Eland) from Glencore Operations South Africa has been finalised and has become unconditional. Northam first advised of the acquisition of Eland in February 2017 for a cash consideration of R175 million which secures full ownership of the Eland mine and infrastructure, through Eland Platinum, a wholly-owned Northam subsidiary.

Northam will operate Eland Platinum on a fully integrated mine to market basis. PGM concentrate produced at Eland mine will be processed at Northam’s Zondereinde smelter complex.

Paul Dunne, Northam’s Chief Executive Officer, said “Northam is well advanced in developing its mine plan for Eland and is looking forward to recommissioning the mine to unlock the potential of this large, shallow resource with fully developed infrastructure. The Eland transaction further diversifies Northam’s asset footprint and significantly enhances the long-term optionality and flexibility of Northam’s asset portfolio.”

Operational since 1993, the Zondereinde mine (pictured) continues to operate at steady state levels and remains cash generative and profitable producing some 280 000oz/y of platinum group metals (PGMs). Zondereinde mines both the UG2 and Merensky reefs. Given the geological complexities associated with mining the Merensky reef, the mining ratio is steadily shifting to a UG2: Merensky ratio of 60:40 to balance the depletion of the resource. As such the combined head grade has more recently dropped, but is anticipated to stabilise at approximately 4.9g/t.

A deepening project was started in order to open up additional conformable Merensky reef. This project is progressing well and is being equipped with a conveyor and a chairlift. On 16 level the lateral development has started with the crosscuts to the reef.

In October 2016, Northam acquired the Tumela resource from Anglo American Platinum on the north-west boundary of Zondereinde. The acquisition provides access to additional higher-grade Merensky and UG2 reef and extends the life of mine (LoM) to beyond 30 years.