NZ Refining signs platinum sale and lease back deal with Bank of Nova Scotia
New Zealand Refining, which operates the Marsden Point refinery, has entered into a sale and lease back agreement for industrial platinum with Bank of Nova Scotia which it anticipates will cut annual costs by about $500,000.
The Whangarei-based company sold about 8,300 ounces of platinum contained in a catalyst in its platformer processing unit to the bank for about $12.4 million, and will lease it back from the financier for an initial term of 12 months, with the option to extend the term and make further leases for the precious metal, NZ Refining said in a statement. Further leases include about 5,900 ounces early next year for the Te Mahi Hou continuous catalyst regeneration project.
"Taking advantage of extremely competitive leasing rates has meant we've been able to reduce our funding costs and improve the company's balance sheet," chief executive Sjoerd Post said. "This arrangement comes on the back of initiatives already undertaken to strengthen the balance sheet and lift our refiners' margin by around 66 US cents - all of which is crucial as we head towards the completion of the $365 million Te Mahi Hou project in December 2015."
NZ Refining has been on a drive to improve its margins after its oil company customers had to make top-up payments due to the collapse in global refining margins was exacerbated by costs associated with a longer than expected maintenance shutdown. Those margins have improved in recent months as the price of crude oil, an input cost for the refinery, have tumbled.
Shares of the company rose 0.4 percent to $2.26 cents, and have gained 9.2 percent this year.