Royal Bafokeng Platinum’s (RBPlat) share price rose as much as 4% to R30.21 on Tuesday, despite reporting a loss following an R864m impairment of its assets.
The impairment dragged RBPlat into a net loss of R657m for the year to end-December from a profit of R263m in 2016. Revenue increased by 4.7% to R3.4bn.
The company said platinum demand had a relatively tough year in 2017, with the three main end-users — automotive, jewellery and industrial applications — contracting year on year.
However, palladium prices ended the year by exceeding $1,000 an ounce for the first time in 16 years, an increase of more than $380 an ounce since the start of 2017.
Rhodium prices enjoyed a strong recovery during 2017, increasing from $770 an ounce at the beginning of the year to $1,715 an ounce by year-end. RBPlat anticipates demand for rhodium to remain strong throughout 2018.
Fourth-quarter operations experienced an increase in the number of inspections by the Department of Mineral Resources due to labour unrest that followed the termination of its contract with Gupta-family owned JIC Mining Services. However, the issue has now been resolved by transferring employees to volume contractor Reagetswe Rasimone, which has provided services at Bafokeng Rasimone Platinum Mine (BRPM) for several years.
The company ended the year with no fatalities but was disappointed with the increase in its lost-time injury frequency rate, as well as its serious-injury frequency rate. This was "despite our ongoing investment in safety training at all levels".
Its Maseve acquisition is in progress. A deposit of $3m (R41.4m) was paid in October 2017 in respect of Phase 1 of the transaction. Following the Competition Tribunal approval, forward cover was taken out for the settlement of the remaining $55m Phase I acquisition price.
Shareholders approved the issue of ordinary shares for the purpose of funding the transaction in November 2017. The transaction would provide RBPlat with immediate access to an operational concentrator plant to treat ore from Styldrift I, as well as the strategic flexibility to extend the life of mine of the South shaft Merensky. It also provides RBPlat with early access to its Frischgewaagd ore body at Styldrift I.
In 2018, the company intends to ramp up its "organic growth project, Styldrift I and incorporate Maseve into our business".