Northam secures Global Credit Rating upgrade
CREAMER MEDIA / 13TH OCTOBER 2017 / NATASHA ODENDAAL
JOHANNESBURG (miningweekly.com) – Credit rating agency Global Credit Rating has upgraded platinum miner Northam Platinum’s long-term credit rating to A-(ZA) from BBB+(ZA) and reaffirmed Northam’s short-term credit rating at A1-(ZA), with a stable outlook.
“Northam’s credit rating upgrade was achieved despite the current and ongoing challenges being faced by the miningindustry, further illustrating the group’s resilience and ability to maintain a strong capital base and liquidity position,” the platinum miner said in an update to shareholders on Friday.
Free Wix Image
Several considerations led to the upgrade, including the easing of Northam’s corporate risk profile as the company’s second operational mine, Booysendal North, had maintained steady-state production for two years; additional sources of production expected from Northam’s recent transactions; a strong improvement in operating cash flows; and a significant increase in operating profit as a result of improved metal prices, lower production costs, general economies of scale and the implementation of stringent cost controls.
The ratings agency also based its upgrade on the realisation of the projected benefits of Northam’s fully-funded R6.6-billion black economic empowerment transaction through the acquisition of quality platinum group metal assets at favourable prices.
“A further positive rating migration is predicted on the development of Booysendal South and recently acquired orebodies, which should see a continued widening of the group’s operating margins and sustainability of cash flows and credit protection metrics,” the company concluded.
EDITED BY: CREAMER MEDIA REPORTER
LINK - http://www.miningweekly.com/article/northam-secures-global-credit-rating-upgrade-2017-10-13