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RBPlat forecasts challenging year ahead

Johannesburg - Royal Bafokeng Platinum, a mid-tier producer of platinum group metals, on Tuesday reported 12.6% drop in earnings after it increased the number of shares in issue as part of its listing in Johannesburg last year.

Headline earnings per share of 167 cents were reported for the 12 months to end December, from 19c the year before.

The weighted average number of shares in issue since its November listing are about 163.7 million, compared to just over 141.1 million the year before.

Production of platinum concentrate dipped 2.2% to 281 598 ounces as safety stoppages and a contractor strike contributed to a 4.2% fall in tonnes milled.

The lower volumes and rising net costs, in particular labour and electricity cost hikes, contributed to an 8.4% increase in cash costs to about R6 400 per platinum ounce respectively.

“Nobody in the sector would deny that it has been a difficult year, and we have experienced our fair share of those challenges,” said RBPlat CEO Steve Phiri.

Phiri anticipates that market conditions will remain difficult in the year ahead but remains confident about the Styldrift 1 project in South Africa, scheduled to take off in late 2014.

This project is expected to more than double the group’s platinum production to 610 000 ounces a year by 2017.

RBPlat shares have gained 9.6% this year to date, outperforming Johannesburg's All Share [JSE:J203] index, which is up 7.1% so far this year.

 
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