Bauba hampered by administrative delays


Bauba hampered by administrative delays

Published Date: 2019-03-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Bauba hampered by administrative delays

The platinum and chrome exploration company says an improving chrome market will help its full-year earnings.

Bauba Platinum says administrative delays hurt its first-half earnings after it waited for the Department of Water and Sanitation to process and amend a water-use licence application and the Department of Mineral Resources to approve amendments to the environmental authorisation of its Moeijelijk chrome mine. This cost it two months of opencast production as well as four months of concentrate sales due to the delayed commissioning of its new wash plant. However, the platinum and chrome exploration company anticipated the setbacks and highlighted them in last year's annual report.

Although the wash plant was eventually commissioned and started production in November, it only operated for two-thirds of December due to the festive season holidays. During November and December, it was still in the ramp-up phase and produced about 29,000 tonnes of chrome concentrate. By the end of December, there were 82,686 tonnes of chrome ore inventory on hand. Since January the wash plant has been producing according to its planned throughput levels, with spiral feed achieving about 35,000 tonnes in a month.

The chrome market was also weak over the six-month period. Up until the wash plant commenced production, Bauba was only selling 40 basis run-of-mine, realising a significantly lower value than its concentrate basket value, which is heavily weighted towards speciality grade concentrates.

Things are looking up though. Bauba says the chrome ore market has perked up and it's concluded a 12-month offtake agreement with an advance R73.5 million part-payment already received. It has also secured the sale of a minimum quantity of foundry grade material over a four-month period to a leading foundry chrome trade.

At the halfway stage, revenue had declined by 21.6% to R90.4 million and it reported an attributable loss of R9.67 million for the six months to end-December. That resulted in a headline loss per share of 2.55c from a profit of 4.19c a year earlier.

Its shares rose 18% to 60c on Friday in thin trade.

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