Zimplats' Quarterly Reports

Report for June 2001 Quarter

Highlights

On the 19 April 2001 road construction commenced. Significant progress has been achieved on both the road and the major bridges and is in accordance with the development timetable.

The mining contractor has mobilised and the first blast commencing the development of the Ngezi Platinum Mine occurred 20 June 2001. Good progress has been achieved in the removal of overburden.

Recommissioning work has shown the metallurgical plant to be in good working order indicating the care and maintenance programme has been well implemented.

Zimplats and Absa have agreed the terms of the loan and significant progress has been made in finalising the loan agreement. Political risk insurance has been secured for this facility.

Project General Manager has been recruited along with other key senior personnel.

Project Company Structure

Hartley Management Company (Private) Limited (HMC) is the owner and operator of the Ngezi/SMC Project. The assets owned and/or managed by HMC consist of:

• Hartley Platinum Mine
• Underground mine on care and maintenance.

• Selous Metallurgical Complex
• 2.2 million tonnes per annum concentrator.
• 12 megawatt smelter and converters.
• Base metal refinery (remaining on care and maintenance).
• Ancillary mine and processing infrastructure including stores, laboratory and mine offices.

• Ngezi Platinum Mine
• Opencast mine situated on mining lease tributed to HMC by Zimplats.

HMC is owned by Zimplats (70%) and Impala Platinum Holdings Limited (Implats) (30%).

HMC General Manager/Chief Operating Officer appointed

Zimplats is pleased to announce the appointment of Mr Michael John Houston as General Manager and Chief Operating Officer of HMC. Mr Houston is also a director of HMC, and brings a wealth of mine management and development experience gained as CEO of Anglo American’s major mining companies in Zimbabwe. These include Bindura Nickel Corporation Limited and Zimbabwe Alloys Limited.

Mr Houston’s knowledge and experience of the Zimbabwean mining industry is enabling him to recruit senior staff within Zimbabwe with the requisite training and experience to develop the Ngezi/SMC Project. Several key positions have been filled or are due to be filled shortly.

Development

Ngezi/Selous highway

Construction of the 77km Ngezi to Selous highway is progressing to plan, and completion of the road by mid-December 2001 should be achieved.

Ngezi Platinum Mine

Part of the mining fleet has been mobilised and pre-stripping of overburden has commenced. The initial three metres of overburden has not been as hard as expected resulting in the material being mined without the need for blasting.

The larger, heavy duty machinery will be mobilised in August 2001 which will see the quantity of material being moved increase significantly.

The first shipments of ore are scheduled to take place at the beginning of 2002.

Selous Metallurgical Complex

The recommissioning of the metallurgical plant is progressing well with most of the equipment being found to be in good working order.

New liners are being fitted where necessary to the SAG and ball mills, to replace liners that have worn out through normal wear and tear during the initial operating period. New rubber linings are also being fitted to the flotation tanks in the concentrator.

Prior to restarting the furnace a limited number of rows of refractory bricks are being replaced to avoid having to do so early in the normal course of operations. The two converters will also be relined prior to the start-up of the smelter.

With the exception of the capital reduction of HMC, all the conditions precedent to the subscription for new shares in HMC by Implats have been met. The capital reduction is being processed through the Zimbabwe courts and should be finalised shortly.

Implats has, however, been advancing funds to HMC for project development against the US$30 million subscription amount due to HMC.

The Absa loan term sheet has been finalised with HMC and the final draft of the loan agreement should be available shortly. Political risk insurance for the loan is available once the loan agreement is completed. HMC is scheduled to access the loan funds in late September 2001.

Corporate

Having served on the Zimplats board since its inception, and subsequent to the successful financing of the Ngezi/SMC Project and sale of 30% of Zimplats by Delta Gold Limited to an investment holding company jointly owned by Impala Platinum Holdings Limited and Absa Bank Limited, Terry Burgess decided to resign, with effect from 30 June 2001, to further concentrate his efforts on Delta’s main business. The board of Zimplats wishes to thank Terry for his past services and for his commitment to ensuring that Zimplats obtained financing for the development of the Ngezi/SMC Project.

Mr Louis Rozman is Chief Operations Officer for Delta Gold Limited and was nominated to the Zimplats board by Delta Gold Limited. He manages Delta’s operations, mining joint ventures and technical services, and he holds degrees in mining engineering and mineral economics with 20 years experience in mining operations, joint ventures and corporate management in Australasia and Africa.

Mr Rozman is Deputy Chairman of the Joint Ore Reserve Committee (JORC) for the Australasian Institute of Mining and Metallurgy (AusIMM).

During the quarter, Mr Stuart Murray, representing Impala Platinum Holdings Limited, resigned from the Zimplats board as a consequence of his resignation from Implats.

Mr Murray played a pivotal role in the negotiations which resulted in Implats investing in Zimplats and HMC. The board of Zimplats wishes Mr Murray success in his new appointment.

Following the announcement that Absa Bank Limited had acquired approximately 15% of Zimplats equity, Mr Glenn David Povey was appointed to the board of Zimplats. Glenn specialises in capital raisings and underwritings; mergers and acquisitions; corporate restructuring (debt/equity); strategic and financial advisory; and investment banking. Glenn is a member of the Absa Investment Banking Committee, which authorises equity investments on behalf of the bank.

It has been previously announced that Zimplats has agreed with the Government of Zimbabwe to make up to 15% of its equity available for ownership by Zimbabweans. The empowerment participation may either be through the acquisition of 15% of the existing issued share capital, or through the private placement of new shares equating in number to 15% of the company’s existing issued share capital, at the market price, payable in Australian dollars.

The Government has nominated the National Investment Trust (NIT) as the entity to take up the shareholding. In the event that the NIT cannot take up the shareholding, a similar organisation, acceptable to Zimplats, may take up the placement or purchased shares. The current economic situation in Zimbabwe is making it difficult for the NIT to raise the necessary funding to acquire the empowerment shareholding.

Zimplats is not permitted to assist in the purchase of or subscription for its shares. It is however, being informed of the discussions between the NIT and various financial institutions seeking to fund the NIT 15% participation in Zimplats’ equity. To the extent permitted, Zimplats is co-operating with NIT and the financial institutions in the search for an appropriate means of financing the empowerment investment.

Until HMC is in a position to distribute dividends, estimated to be in 2003, Zimplats needs to secure corporate funding. The Zimbabwe private placement of shares equivalent to 15% of existing issued share capital is the primary source of funding being pursued.

The corporate funding requirements are modest, approximately US$3 million, until dividends are received from HMC. Alternative funding options such as a debenture issue, or a short-term loan, are being discussed with the company’s financial advisers. Corporate funding needs will be met, either through the empowerment investment, or a short-term facility.

Economic Situation

The present economic situation in Zimbabwe is of concern to everyone, but has little direct impact on the Project and company. The lack of foreign currency in Zimbabwe has not affected the Project because it is being financed from outside resources. Similarly once operations commence, the offshore bank account facility granted to the company will provide the foreign currency to pay for all imported consumables, including fuel and services.

Investor Information

Capital structure

As at the 30 June 2001 Zimplats had 88,361,820 fully paid and quoted shares on issue. A total of 326,000 employee and director share options have been approved for the year 1999 at A$0.40, and 1,335,000 share options approved for 2000 at A$0.50. These options have been allocated in accordance with the Employee Share Option Scheme approved by shareholders in General Meeting on 28 May 2001. There are no other share options on issue.

Major shareholders

*(Jointly owned by Implats and Absa)

Reporting calendar

The intended dates for future reports and the AGM are as follows:

Shareholder enquiries

Matters relating to the number of shares held and change of address should be directed to the share registry at: Computershare Registry, GPO Box 7045, Sydney NSW 1115, Australia.

Zimplats share price and volume

At the start of the quarter the Zimplats share price stood at A$1.30 and closed at A$0.92 at the end of the quarter.

The total volume of shares traded during the quarter was 4.8 million shares.

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