Modern Mining June 2020

BULK COMMODITIES

of 21,6% per annum for 11 years since the end of the global financial crisis. This has resulted in a busi- ness with a very strong balance sheet, bolstering its ability to weather storms and preparing it to benefit from opportunities that may present themselves in the aftermath of the COVID-19 crisis. “We have decided not to declare a final dividend at this stage. The decision supports the group’s general conservative nature and ensures the fur- ther preservation of cash, which is desirable due to the uncertain nature of the current economic cli- mate. We are seeing an increase in opportunities that could justify a cash investment, which in turn are expected to deliver excellent returns. However, I should concede that the full impact of COVID-19 is currently unknown and it requires prudent cash management,” he says. Prospects On the operational front, Afrimat entered the COVID-19 lockdown, which started a month after its reporting period, with a very strong balance sheet, positioning it strongly for the uncertain and volatile business climate, which is expected to continue for the immediate future. “Fortunately, the impact of the national COVID-19 lockdown was dampened by the partial reopening

result of the COVID-19 pandemic, may offer unique opportunities that mining businesses can leverage if prepared. He reasons that now might be the time for Afrimat, given its cash-positive status, to invest in key resources – specifically, assets. Van Heerden believes that going into this Covid‑19 influenced downturn with balance sheet strength puts Afrimat in good stead to acquire assets. He argues that making strategic acquisitions at depressed multiples will create long-term accre- tive value for the company. Afrimat has consistently delivered pleasing finan- cial results in recent years, maintaining a compound average growth rate in headline earnings per share

While there have been some logistical challenges at Demaneng, the mine is producing expected volumes.