02 March 2021 01:17:38 PM

Bauba Platinum releases interim results

- 2019-03-11 02:37:11 PM

Bauba Platinum Limited has released its condensed consolidated interim results for the six-month period ended 31 December 2018. 


- 12 month offtake agreement concluded with an advance R73,500 million part: payment received

- Moeijelijk chrome ore spiral wash plant successfully commissioned in November 2018

- Revenue decreased by 21,6% to R90,363 million (six-month period ended 31 Dec 2017: R115,241)

- Investment in property, plant and equipment increased by 54,0% to R42,235 million (six-month period ended 31 Dec 2017: R27,424 million)

Financial review

Bauba's performance for the six months to 31 December 2018 was adversely impacted by administrative delays by the Department of Water and Sanitation (DWS) in processing an amended water use licence application (WULA) and by the Department of Mineral Resources (DMR) to approve amendments to Moeijelijk's environmental authorisation in terms of section 102 of the Mineral and Petroleum Resources Development Act (MPRDA). This resulted in an effective loss of two months opencast production, as the opencast had to ramp up back to planned production levels, as well as loss of four months of concentrate sales due to the delayed commissioning of our new wash plant. These setbacks were anticipated and highlighted to the market in Bauba's 2018 integrated annual report released 24 October 2018.

The wash plant was commissioned and commenced production in November 2018. However, it was only operated for two thirds of December 2018 due to the festive season holidays. During November and December 2018, the wash plant was still in the "ramp-up" phase and produced approximately 29 000 tonnes of chrome concentrate. As at 31 December 2018, there was 82 686 tonnes of chrome ore inventory (ROM) on hand. Since January 2019, the wash plant has been producing according to its planned throughput levels, with spiral feed achieved approximating 35 000 tonnes in a month.

The chrome ore market was weak during this interim period. Up until the wash plant commenced production, Bauba was only selling 40 basis run-of-mine (ROM), realising a significantly lower value than Bauba's concentrate basket value, which is heavily weighted towards speciality grade concentrates. Based on actual January and February 2019 sales, the current concentrate basket generated a weighted average free on truck (FOT) price that is significantly greater than the 40 basis ROM equivalent that was previously sold.


The January 2019 basket price detailed above did not include foundry sales as Bauba is still gradually breaking into this market, but foundry volumes are expected to improve over time. Based on Bauba's current wash plant production and positive assay results, Bauba is confident that the targeted foundry sales will be achieved.

During February 2019, Bauba entered into a Foundry Chrome - Commodity Purchase Contract with a leading foundry chrome trader and secured the sale of a minimum quantity of foundry grade material over a four-month period. This contract, together with Bauba's existing offtake agreement, will enhance Bauba's future profit margins by increasing the value it receives from premium speciality chrome ore concentrate sales.

These factors, in combination with a chrome ore market that has been improving and is currently trending upwards, ought to contribute positively towards Bauba's full year results.

Changes to the board

On 8 February 2019, Ms Thabile Makgala was appointed as an independent non- executive director. Thabile holds a Bachelor of Science degree in Mining Engineering from the University of the Witwatersrand as well as a Master of Business Administration from the University of Stellenbosch Business School and has dedicated almost two decades of service to the mining industry. Her diverse professional experience includes general management, strategy, business development and business planning.

Mineral resources and mineral reserves

As at 31 December 2018, there have been no material changes to the mineral resources and mineral reserves as reported in Bauba's 2018 integrated annual report.