Despite a challenging third quarter, ended March 31, platinum miner Impala Platinum (Implats) has maintained its market guidance for the full year.

The full‐year refined production for Implats is estimated at between 1.5-million and 1.6-million platinum ounces and, given the scheduled refurbishment of furnaces at Impala Rustenburg and Zimplats later in the financial year, Implats expects to release limited inventory through the refinery during the second half of 2019, with the balance to be released across the group during 2020.

Operating costs are expected to be between R23 900/oz and R24 800/oz on a stock‐adjusted basis for the full year, with group capital expenditure forecast at between R4.1-billion and R4.3-billion.

Despite the forecasts, Implats expects both Marula mined volumes and gross group refined volumes to be towards the lower end of the guided range.

Commenting on the third-quarter results, CEO Nico Muller said last month that the group had achieved a record safety result during the quarter, which underpinned sustained operational delivery, despite a traditionally weak production quarter for the miner.

Group tonnes milled during the quarter were slightly lower at 4.53-million tonnes, compared with the 4.59-million tonnes milled in the prior comparable quarter.

A stronger mining performance at Impala Rustenburg was offset by lower tonnages at Marula and Zimplats.

Overall, mill grades were steady at 3.81 g/t of platinum, palladium, rhodium, ruthenium, iridium and gold (6E) during the quarter and mine-to-market platinum in concentrate production was maintained at 307 000 oz, compared with 309 000 oz in the prior corresponding period, the company said.

In the nine-month period to March 31, the tonnage milled, excluding production from associates, was marginally higher year-on-year at 14.77-million tonnes.

The average mill grade was 1% lower at 3.84 g/t 6E and platinum-in-concentrate production was maintained at 985 000 oz, compared with 987 000 oz produced in the prior corresponding nine months.

Platinum in concentrate received by Impala Refining Services (IRS) from third-party and toll customers during the third quarter increased 16.2% from the prior comparable period to 43 000 oz, owing to higher contractual deliveries.

However, in the nine-month period, platinum-in-concentrate production from third-party and toll customers declined 38.3% to 140 000 oz, owing to elevated deliveries from a large, one-off toll refining customer in the prior comparable nine months.

Meanwhile, total platinum-in-concentrate production during the quarter was slightly higher at 350 000 oz; however, refined platinum production increased 5.4% to 333 000 oz, compared with 316 000 oz in the prior corresponding period.

The Number 3 furnace at Impala Rustenburg was taken off line in January for a full scheduled rebuild and, as a result, available smelter capacity was constrained during the quarter, resulting in no further reduction in excess accumulated pipeline stocks during the period.

In the nine-month period, Implats said, refined platinum production benefited from higher available smelter capacity at the group as a result of extensive maintenance work performed in the prior comparable period.

In effect, this facilitated higher refined volumes of 549 000 oz at Impala in the nine-month period. Refined volumes at IRS, at 584 000 oz, were lower, owing to the one-off toll contract in the previous comparable period.

Gross refined platinum production for the nine months increased 8.7% to 1.13-million ounces, compared with 1.04-million ounces during the prior corresponding period.

The Number 3 furnace is expected to be recommissioned in the coming weeks and return to full production during May, following which the Zimplats furnace will be taken down for scheduled maintenance in June.

As at March 31, 2019, 138 000 oz of excess platinum-in-concentrate remained in stock, which, together with associated platinum-group metals (PGMs), equates to about R4.75-billion in revenue at prevailing rand PGMs pricing.

The bulk of this inventory was expected to be processed and sold in 2020, once the Zimplats furnace maintenance work had been completed, Implats noted.

Despite the challenges presented by a slow post-Christmas start-up at Impala Rustenburg, load-shedding by State-owned utility Eskom and unscheduled shaft maintenance at 16 Shaft, an improved operational performance was delivered.

The tonnage milled during the quarter increased 3.5% to 2.58-million tonnes, compared with 2.49-million tonnes in the prior comparable period. Higher volumes were delivered across the operation, with the exception of 1 Shaft, where production declined in line with closure plans.

Further, changes took place in the operational mix, as the restructuring plan was effected and impacted on the mill grade, which declined 3.9% to 3.95 g/t 6E from 4.11 g/t 6E in the corresponding period.

The lower grade was offset by improved concentrator recoveries and the treatment of additional surface sources.

Consequently, platinum-in-concentrate production increased 6% to 160 000 oz, compared with 151 000 oz in the previous corresponding period.

In the nine months ended March 31, 2019, the tonnage milled increased 4.7% to 8.55- million tonnes, while the mill grade decreased 2.2% to 3.97 g/t 6E, but the higher tonnage throughput and improved recoveries resulted in a 3.8% increase in platinum-in-concentrate production to 518 000 oz, compared with 499 000 oz in the prior corresponding period.

Refined platinum production during the quarter increased to 144 000 oz from 71 000 oz in the prior corresponding period. This, Implats explained, was due to the increased processing capacity available to process Impala production, which was displaced by IRS ounces in the prior comparable period as a result of IRS’s contractual delivery terms and constrained processing capacity.

In the nine-month period, refined platinum production increased 60.5% to 549 000 oz from 342 000 oz during the previous comparable period, benefiting from higher available processing capacity.

On a stock-adjusted basis, refined platinum production increased by 4.8% to 520 000 oz, compared with 496 000 oz in the previous corresponding reporting period.

Meanwhile, several stakeholder engagements were undertaken during the reporting period, which principally focused on the planned closure/divestment from 1 Shaft, which is nearing the end of its available mine life. These are expected to be concluded over the next four to six months.

Zimplats

Zimplats sustained its operational performance during the quarter under review, with the tonnage milled having decreased 3.3% to 1.60-million tonnes, compared with 1.66-million tonnes in the prior corresponding period, largely owing to a shortened operating period and the impact of contributions from opencast operations in the third quarter of the 2018 financial year.

The mill grade was maintained at 3.48 g/t 6E and, consequently, platinum-in-concentrate production decreased 4.4% to 66 000 oz, compared with 69 000 oz in the prior corresponding period.

Marula

Implats lamented that operational continuity at Marula was hampered by community disruptions, which resulted in a seven-day work stoppage at the mine. This, together with power interruptions caused by Eskom load-shedding, resulted in the tonnage milled during the quarter decreasing 20.8% to 349 000 t from 441 000 t in the third quarter of the 2018 financial year.

Notwithstanding a 4.1% improvement in mill grade during the quarter to 4.29 g/t 6E, platinum-in-concentrate production decreased 25% to 15 000 oz, compared with 20 000 oz in the prior comparable period.

Mimosa

The tonnage milled at Mimosa improved marginally to 678 000 t, while the mill grade was sustained at 3.83 g/t 6E.

Platinum-in-concentrate production was impacted on by lower concentrator availability, which impacted metal recoveries and decreased platinum production to 29 000 oz from 30 000 oz in the prior corresponding period.

Two Rivers

The operational performance at Two Rivers was impacted on by continued lower-grade split-reef mining during the period under review, which was further exacerbated by Eskom load-shedding and an overland belt failure.

The tonnage milled during the quarter decreased 5% to 834 000 t, compared with 878 000 t in the prior comparable period.

Despite a slight improvement in mill grade to 3.59 g/t 6E from 3.56 g/t 6E, platinum-in-concentrate production declined 10% to 36 000 oz, compared with 40 000 oz in the prior corresponding period.