Northam Platinum Mine

START - R110 | FINISH - R142.81

TRADING PLAN

●       Entry: Enter at or near R110 per share.

●       Stop Loss: Set the stop loss at R85 to manage potential downside risk.

●       Target: R142.81 by the end of the investment horizon, reflecting an expected 30% upside from the start price.

WHY THESE SHARES HAVE POTENTIAL FOR PROFIT

●       Strategic renewable energy initiatives: Northam has secured a 20-year Power Purchase Agreement (PPA) for the 140 MW Karreebosch Wind Farm. This wind farm is projected to supply approximately 460 GWh of clean electricity to Northam's three mining and processing operations annually, reducing reliance on traditional energy sources and lowering operational costs. Construction is set to begin immediately, with power delivery expected in the 2027 financial year.

●       Strong production growth: In the six months ending December 2024, Northam increased its refined platinum group metals (PGM) production by 3.7% to 451 213 ounces and boosted chrome output by 7.5%. This shows the company's operational strength and ability to achieve growth in a challenging market environment.

●       Tightening supply: South Africa, responsible for approximately 70% of global platinum output, has experienced a decline in production, from 5.3 million ounces in 2006 to about 3.9 million ounces recently. This reduction in supply could potentially strengthen long-term platinum prices, benefiting producers like NPH.

INDICATORS

Northam Platinum's share price has been trading within a range, recently testing the support level around R97. Momentum indicators, such as the relative strength indicator (RSI), suggest the stock is in oversold territory, indicating potential for upward movement. An increase in trading volumes reflects growing investor interest. Additionally, a golden cross has occurred with the 50-day simple moving average (SMA) crossing above the 200-day SMA, signalling a possible shift to a bullish trend.

RISKS                                    

●       Weak PGM prices: In the first half of 2025, the mine faced challenges due to declines in platinum group metals (PGMs) prices. This drop directly affected its revenue and profitability. The outlook for platinum prices in 2025 is uncertain, with experts offering a mixed view and no strong indication of a significant recovery soon.

●       Global economic slowdown: There are growing concerns about a global economic decline, which could reduce demand for platinum in key industrial applications, especially in the automotive industry, where platinum is used in catalytic converters. A decrease in demand from these sectors could further pressure platinum prices and impact the mine's financial performance.

Disclaimer:
*Any opinions, views, analysis or other information provided in this article is provided by BCS Markets SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BCS Markets SA does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions and all decisions are made at your own risk. BCS Markets SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss including without limitation any loss of profit which may arise directly or indirectly from use of the market commentary. The content contained within the article is subject to change at any time without notice. BCS Markets SA is an authorised financial services provider FSP No. 51404.
** This article was prepared by BROKSTOCK analyst Maboko Seabi