Overall results for the year under review were mixed at Northam's mining operation. Building on the safety successes achieved in the previous year, the company had the distinction of achieving two million fatality free-shifts in September 2002. However, since that achievement eight employees tragically lost their lives in mining related accidents. Management is deeply concerned about this disappointing performance and has initiated the implementation of a behaviour based safety programme to complement existing safety initiatives.

Operationally the company produced solid results under difficult mining conditions. Metals in concentrate produced increased by 22.4% to 10 354kg (3PGE+Au). Sales however, were only 2.6% higher than the previous year at 9 174kg (3PGE+Au) owing to a build-up of inventory totalling 890kg (3PGE+Au) following the successful completion of the smelter rebuild in March this year.

The basket price for metals sold remained relatively constant in US dollar terms averaging US$498/oz for the year (F2002: US$497/oz). In R/kg terms however, the average basket price declined by 9.4% from R160 367/kg in F2002 to R145 273/kg as a result of the strength of the rand against the US dollar, particularly in the second half of the year. By year end, the basket price in terms of R/kg had declined to R129 546 having peaked at R168 384 early in the financial year. Consequently sales revenue was 5.7% lower than the previous year at R1 472 million.

Unit cash costs were well contained increasing by 2.1% to R96 880/kg (3PGE+Au). Net income of R275 million was reported for the year (F2002: R399 million).

Headline earnings at R275 million for the year were 31% lower than in F2002.

A cash distribution of 35 cents per share to be effected by way of a reduction of share premium has been proposed. Added to the interim distribution of 110 cents per share paid in respect of the first half of the year, the total return to shareholders amounts to 145 cps (F2002: 245 cps).

The year ahead will see a renewed drive to reduce the number and severity of accidents at our mining operation, a continued focus on costs as well as on increasing the ore reserve position on the Merensky reef horizon in order to benefit from improved mining flexibility in the difficult ground conditions.
  

Cash distributions

Basket prices (3PGE+Au)