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Zim platinum miner reports positive quarter

NOTABLE MILESTONE 
Zimplats recorded 365 lost-time-injury-free days on April 9

NOTABLE MILESTONE Zimplats recorded 365 lost-time-injury-free days on April 9

Photo by Bloomberg

8th September 2017

     

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JSE-listed platinum-group metals producer Impala Platinum subsidiary Zimplats experienced a positive period in the quarter ended June 30, reporting a safety milestone, greater tonnes mined and ore milled, and revenue growth.

During the quarter, Zimplats recorded 365 lost-time-injury- (LTI-) free days on April 9. However, regrettably, subsequent to this record performance, three LTIs were recorded during the period.

In terms of production, tonnes mined increased by 10% on the previous quarter, owing to an extra nine operating days, from about 1.6-million tonnes to about 1.8-million tonnes.

The platinum, palladium, gold and rhodium (4E) head grade, at 3.24 g/t, was marginally lower than the previous quarter, owing to dilution from faults and barren geological intrusions in the areas mined during the quarter.

Ore milled (some 1.8-million tonnes) and 4E metal-in-concentrate production (155 181 oz) increased by 18% and 17% from some 1.5-million tonnes and 132 117 oz respectively, as a result of an increase in the overall plant running time, owing to the extra nine days. In the previous quarter, running time was affected by the seven-day planned reline shutdown at the Ngezi concentrator. Overall, 4E metal production in converter matte increased by 17% from 135 831 oz in the previous quarter to 158 898 oz, in line with the increase in milling throughput.

Revenue for the quarter under review increased by 9% from the previous quarter, mainly as a result of the 16% increase in 4E metal sales volumes, which was partly offset by a general decrease in metal prices.

Zimplats’ net operating costs increased by 28% on the previous quarter largely in light of the 16% increase in 4E metal sales volumes. The net operating expenses for the previous quarter benefited from the $8-million recognised in relation to the previously written off Reserve Bank of Zimbabwe debt.

In line with its increase in revenue, the company’s royalties were 9% higher than the previous quarter.

Cash costs per 4E ounce increased marginally from the previous quarter, while amortisation and depreciation cost per 4E ounce improved by 17% from the previous quarter, in line with the increase in metal production.

However, gross revenue per 4E ounce decreased by 5% from the previous quarter, owing to lower metal prices.

Local spend in Zimbabwe (excluding payments to government and related institutions) increased to $114-million from the $51-million recorded in the previous quarter.

Total payments to government in direct and indirect taxes increased to $51-million from the $10-million reported in the previous quarter.

The average metal prices for the June quarter were $941/oz of platinum, $819/oz of palladium, $947/oz of rhodium, $1 257/oz of gold and $9 248/t of nickel.

With regard to the company’s capital projects, Zimplats says the redevelopment of the Bimha mine remains on schedule to reach full production in April 2018. As at June 30, $36-million had been spent on the project, against an approved budget of $92-million.

Further, the development of the Mupani mine (the replacement mine for the Ngwarati and Rukodzi mines) is on schedule, targeting ore contact by May 2020 and full production in August 2025. As at June 30, $11-million had been spent on the project, against an approved budget of $264-million.

Resolving Government Issues

Zimplats indicates that it remains in discussions with the Zimbabwe government regarding its indigenisation implementation plan, as well as on the issue of governments’ intention to acquire land on its mining lease.

As reported on January 13, the Zimbabwean government issued, through a Government Gazette Extraordinary, a preliminary notice in terms of which it gave fresh notice of its intention to compulsorily acquire 27 948 ha of land within the Zimplats special mining lease area.

The miner subsequently lodged an objection to the proposed acquisition. Following the objection being lodged, government served Zimplats with an order of compulsory acquisition on May 24 and on June 26 filed a court application seeking confirmation of the acquisition.

Zimplats has responded to the court application and the parties are currently engaged in discussions to find an amicable resolution to the matter.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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