Clever moves bring significant potential for Northam
Northam is making a low-cost entry into a market with significant potential
Sibanye Gold and Northam have made very different acquisitions of platinum group metals (PGM) assets in North America to expand and diversify their businesses amid an extended downturn in platinum prices. Sibanye paid US$2.2bn, financed by debt and an equity issue, to buy the Stillwater PGM mines and projects. Northam is paying $10.7m in cash for the premises and recycling assets of A-1 Specialized Services, a Pennsylvania-based PGM recycler that collapsed after an extended dispute over a $201m payment due to Impala Platinum. The price difference reflects the fact that as an underground miner, Stillwater has a great deal more infrastructure than A-1 and that profit margins on mining are considerably higher than they are for recycling. Stillwater produced more than 500,000oz of PGMs last year from its two mines in Montana, and also has growth projects. Northam is making a low-cost entry into a market with significant potential. Johnson Matthey forecasts that the North American PGM re...
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