- Output will climb to 1.5 million ounces in this fiscal year
- CEO Goodlace announced resignation in May after accidents
Impala Platinum Ltd. climbed the most in four months after saying production will rise in the forthcoming year as the world’s second-largest miner of the metal recovers from major safety failures at its Rustenburg operations.
Impala will produce at least 1.5 million ounces of platinum in fiscal 2017 compared with 1.44 million ounces in the year ended June 30, Chief Executive Officer Terence Goodlace said on a conference call Thursday. Costs will fall 2 percent to 21,300 rand ($1,453) an ounce, he said. The stock rose as much as 13 percent, the most since April 20.
While Goodlace has made safety a cornerstone of the company’s strategy, 11 employees died in accidents at Impala during the financial year. The CEO announced his intention to resign in May, a day after an underground area at Rustenburg caved in, killing two employees.
“I’m sitting here with goosebumps now because they really have hurt us as an organization,” Goodlace said. The company will increase training and enhance its underground support structures to mitigate rockfalls, he said.
Impala’s headline earnings dropped 67 percent to 0.12 rand a share for the year to June 30, it said in a statement Thursday. Along with the safety stoppages, the main driver behind the weaker earnings was the lower platinum price received, which dropped 23 percent to $961 an ounce in the period.
The stock climbed 10 percent to 62.17 rand an ounce at 11:42 a.m. in Johannesburg. The shares have more than doubled this year.
“This has not been a good year for Impala but they’ve still managed to do rather well in terms of cash flow,” Rene Hochreiter, a Johannesburg-based analyst at Noah Capital Markets (Pty) Ltd., said by phone. “Expectations were low given the safety incidents.”
Impala’s net cash from operating activities increased 17 percent to 2.7 billion rand at June 30, the company said. That helped bring its total cash balance to 6.8 billion rand.
Impala, which raised 4 billion rand from shareholders in October, will spend 4.4 billion rand investing in its operations in the year to June 2017, including on two new shafts -- 16 and 20 -- in South Africa, Goodlace said. Production at Rustenburg will be slowed due to the extensive damage to underground infrastructure caused by a fire at 14 Shaft.