Will Northam Emphasize Shareholder Value After Failed RBPlat Takeover?

About this update from Northam Platinum Holdings Limited

Northam Platinum Holdings Ltd. JSE:NPH is a South African platinum group metals miner in the midst of a pivot from external value-additivity to shareholder value passthrough.The company recently exited a tussle with fellow platinum miner, Impala Platinum (IMPUY), which saw it void its interest in a takeover of Royal Bafokeng Platinum JSE:RBP. Subsequently, Northam announced a new shareholder compensation structure and various dispositions, lending the argument that the stock is set to present a different profile in the years ahead.Here are a few of my latest findings pertaining to the company.Reef exposureNortham mines in the Bushveld Complex, which is estimated to own nearly 80% of the world's platinum group metals. The company mines the UG2 and Merensky Reefs with three primary assets under its umbrella, namely Booysendal, Zondereinde and Eland.Source: W. Smith, et al., 2021.Northam's participation in the northern part of the Merensky western lobe provides it with access to bulk PGMs, which translates into a leaner and more skilled labor force than your average PGM site has. As such, and according to my observations, the company's throughput and grades have been very consistent in recent years.As shown in an example of African Rainbow Minerals' JSE:ARI production mix, the Merensky Reef tends to provide a higher concentration of bulk Platinum, while the UG2 Reef provides a blend of PGMs along with traces of Gold. Sure, Northam's exposure to the reefs is not identical to African Rainbow Minerals', yet the latter's case study provides a solid indication.Source: African Rainbow MineralsI charted Northam's full-year ores milled and head grade discovery below, which illustrates its current ores fed per reef. As shown in the diagram, Northam has higher grades stemming from Merensky; however, its feed is higher from UG2.Source: Author's Work, Data from NorthamAs illustrated later on, current ramp-ups and expansion projects mean UG2 and Merensky will probably experience increased feed throughout Northam's next business cycle. However, I expect feed from UG2 to succeed the feed from Merensky amid an aggressive sequencing process at the Eland mine, which relies on UG2 reserves.The following chart illustrates Northam's feed along with grade by mine and reef. I will get into structural shifts later to highlight any changes in the production mix that might occur.Sour...

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