Zimplats' Quarterly Reports
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REPORT FOR THE QUARTER ENDED 30 JUNE 2003
HIGHLIGHTS
-
Implats
to make an offer to minorities @ A$4.08/share.
-
Implats
acquires Absa’s Zimplats shareholding.
-
Record
quarter 4E production.
-
Increased
power and fuel costs constrain profits.
-
Positive
cash flow of US$5.7 million.
-
Good
progress with Ngezi trial underground mine.
PRODUCTION
- Makwiro Platinum Mines (Private) Limited -
"Makwiro"
|
Makwiro is 70% owned by Zimplats and 30% by Impala Platinum
Holdings Limited.
Ngezi Platinum Mine
|
June Quarter
2003
|
March Quarter
2003
|
December Quarter
2002
|
September Quarter
2002
|
| Total volume mined |
BCMs (million) |
2.1
|
2.1
|
2.3
|
2.1
|
| Ore volume mined |
Tonnes (000’s) |
474
|
455
|
545
|
511
|
| Grade |
4E (average) g/t |
3.25
|
3.23
|
3.18
|
3.14
|
Selous Metallurgical Complex
The
new SAG mill liners installed in the previous quarter resulted
in the SMC operating well during the quarter.
However, subsequent to the end of the quarter, a
furnace break out occurred on 12 July 2003, resulting in the
discharge of matte and slag below one of the tapholes.
Management has not yet been able to fully assess the
extent of the damage, but an early evaluation indicates that
the damage is serious and that the furnace may be out of
commission for between one or two months.
Five people sustained minor injuries, none of which
resulted in a lost time incident.
Shareholders will be advised of the final implications
of this incident when a full assessment of the damage is
concluded.
Concentrator
| |
June Quarter
2003
|
March Quarter
2003
|
December Quarter
2002
|
September Quarter
2002
|
| Production days |
91
|
81
|
83
|
91
|
| Tonnes milled |
516,404
|
463,971
|
461,710
|
495,034
|
| Grade g/t |
3.25
|
3.21
|
3.18
|
3.14
|
| Recovery |
82.3
|
82.7
|
82.5
|
79.7
|
| Metal 4E ounces |
43,726
|
39,674
|
39,122
|
39,989
|
Repairs
to the SAG mill bearings and the girth gear lubrication system
constrained milling volumes in April.
In May and June the milling volumes improved
significantly, averaging 6,000 tonnes per day.
Management is now focussing on the ore blasting method
in order to improve fragmentation, which should increase daily
milling volumes.
Smelter
| |
June Quarter
2003
|
March Quarter
2003
|
December Quarter
2002
|
September Quarter
2002
|
| Production days |
91
|
89
|
91
|
91
|
| Concentrate filtered -
tonnes |
21,972
|
22,850
|
21,282
|
20,598
|
| Concentrate to furnace -
tonnes |
24,168
|
21,031
|
22,819
|
24,424
|
| Recovery |
99.5
|
99.7
|
98.4
|
99.2
|
| Metal 4E ounces |
51,981
|
35,534
|
41,290
|
10,455
|
The
smelter operated extremely well in the quarter under review
with the metal output reflecting the processing of concentrate
stock built up during quarter three as a consequence of the
repairs to the furnace matte tap-holes..
Metal Sales
| |
|
June Quarter
2003
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March Quarter
2003
|
December Quarter
2002
|
September Quarter
2002
|
Y.T.D
|
| Platinum |
ounces |
24,358
|
17,693
|
19,373
|
18,769
|
80,193
|
| Palladium |
ounces |
21,269
|
15,142
|
16,870
|
16,744
|
70,025
|
| Gold |
ounces |
2,773
|
1,961
|
2,131
|
1,943
|
8,808
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| Rhodium |
ounces |
2,273
|
1,656
|
1,831
|
1,715
|
7,475
|
| 4E total |
ounces |
50,673
|
36,452
|
40,205
|
39,171
|
166,501
|
| Nickel |
tonnes |
400
|
306
|
335
|
307
|
1,348
|
| Copper |
tonnes |
281
|
219
|
233
|
212
|
945
|
NGEZI
UNDERGROUND TRIAL MINE |
The
underground trial mine was fully mechanised during the quarter
with the introduction of an electro-hydraulic jumbo and
roof-bolter. The
machines have performed as planned with tonnage extraction
rates and costs in line with estimates.
The
introduction of longer drill rounds has further improved the
condition and profile of the hanging-wall, which is expected
to reduce dilution.
An initial
batch of 17,500 tonnes of ore was processed through the SMC
concentrator with a grade of 3.25 grammes per tonnes 4E being
realised. This is
in line with reserve estimates but further modification to the
grade control protocol will endeavour to lift this grade by
between 5-10%.
The next
quarter will see the trial mine ramp up to full production of
an estimated 20,000 tonnes per month ore.
There
has been no change to the Ore Reserve and
Mineral Resource statement during the
quarter.
The
bankable study for the Phase One expansion
has continued on schedule.
There are no significant variations
to date compared to the original scoping
study.
No
further exploration work was undertaken during the quarter as
all efforts by the project team are currently focussed on the
feasibility study for the proposed underground mine.
The
Makwiro revenue and operating cost for the June quarter,
which is 70% attributable to Zimplats, is tabled below:
| Operating cash flow |
June Quarter 2003
US$ 000's
|
March Quarter 2003
US$ 000's
|
December Quarter 2002
US$ 000's
|
September Quarter 2002
US$ 000's
|
| Revenue |
21,133
|
16,187
|
17,244
|
16,900
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| Operating Cost |
15,377
|
9,948
|
9,021
|
9,448
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| Operating Cash Flow |
5,756
|
6,239
|
8,223
|
7,452
|
The
operating cost in the quarter reflects the volume increase and
the higher power, fuel and explosive costs.
The
power tariff was adjusted in April and backdated to February
and is now in US$ terms in line with power costs applicable to
the mining industry in South Africa.
The
backdated charge of US$800,000 together with the new increased
tariff resulted in an additional US$2 million being incurred
in the quarter under review.
During the quarter the company was also obliged to
import its total fuel requirements at a higher US$ cost.
On
a positive note the new cash cost for 4E ounce, as detailed
below, was 3% down on the previous quarter.
| Cash and total cost of
production
|
June Quarter 2003
US$
|
March Quarter 2003
US$
|
December Quarter 2002
US$
|
September Quarter 2002
US$
|
| Cash cost of production 4E
ounce
|
304
|
304
|
250
|
250
|
| Less by-product credits |
(65)
|
(62)
|
(42)
|
(51)
|
|
Net cash cost per 4E ounce |
239
|
242
|
208
|
199
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| Amortisation and depreciation
|
36
|
43
|
36
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37
|
|
Total cost per 4E ounce |
275
|
285
|
244
|
236
|
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Surplus per 4E ounce (*) |
141
|
159
|
186
|
190
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*(Revenue, less total cost per 4E ounce).
The
reduced surplus per ounce is a consequence of a US$27 per
ounce drop in the 4E revenue.
This is mainly a result of the lower palladium price.
The average pgm and gold prices for the past 4 quarters are as follows:
|
June 2003
Quarter
|
March 2003
Quarter
|
December 2002
Quarter
|
September 2002
Quarter
|
| |
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| Platinum |
648
|
665
|
598
|
559
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| Palladium |
172
|
247
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244
|
330
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| Rhodium |
521
|
597
|
598
|
749
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| Source;
Johnson Matthey, monthly average price |
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| Gold |
328
|
345
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333
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313
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| Source:
Monthly average of the daily London am/pm fixes |
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A 90-day option
has been granted to an empowerment group approved by the
Government of Zimbabwe and Zimplats.
A progress report is scheduled for the end of July
2003, and subject to adequate progress in establishing an
appropriate funding structure, the remaining 60-day period of
the option will apply.
Implats has
increased its shareholding in Zimplats to 50.53% through the
acquisition of Absa’s shareholding in Zimplats.
In terms of the agreement entered into on the 20
November 2002 between Zimplats and Implats, Implats will be
making an offer to minorities at A$4.08 per share. The offer document from Implats and the Zimplats
recommendation to shareholders will be sent to shareholders in
the third week of July 2003.
Capital Structure
As at the 30th June 2003, 89,285,360 fully
paid and quoted shares were on issue. The options, with the
exception of the 1999 options, which vested in 2000, vest over a
3-year period, and must be exercised within 5 years of the date
of issue. The share options outstanding, plus the exercise
price, are tabled below. During the quarter 100,000 new options were
issued, and 135,541 were exercised.
Share Options Outstanding
|
Quantity
|
Exercisable Price
|
Expiry
|
|
120,000 |
A$0.40 |
31/12/2004 |
|
721,667 |
A$0.50 |
31/12/2005 |
|
259,166 |
A$0.66 |
28/09/2006 |
| 1,033,294 |
A$0.88 |
23/11/2006 |
| 1,060,000 |
A$1.60 |
29/10/2007 |
|
275,000 |
A$1.43 |
20/11/2007 |
|
60,000 |
A$2.30 |
17/03/2008 |
|
40,000 |
A$2.43 |
02/04/2008 |
As
a consequence of Implats’ shareholding increasing to 50.53%
following the acquisition of the shares formerly held by Absa,
an arrangement with respect to the advance vesting of employee
options has been reached.
Further details will be included in the circular to be
sent to shareholders.
Major shareholders
| Impala Platinum Holdings
Limited |
50.53%
|
| National Nominees Limited |
8.24%
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| Citicorp Nominees Pty
Limited |
6.73%
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Shareholder enquiries
Matters relating to the shareholdings should be directed
to the share registry at: Computershare Registry Services
Pty Ltd, GPO Box 7054, Sydney NSW 1115, Australia. Tel: +61
2 8234 5222, Fax: +61 2 8234 5070.
Information on Zimplats
Contact – Guernsey
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Contact - Australia
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| Mr Tony Link |
Ms Kathrine Brown |
| Tel: +44 1481 727 272 |
Tel: +61 2 9252 7880
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| Fax: +44 1481 711 220 |
Fax: +61 2 9252 7882 |
| Email: info@carey-langlois.com |
Email: info@zimplats.com |
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Contact – Zimbabwe
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Contact – United Kingdom
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|
Mr Roy Pitchford or Mr Greg Sebborn
|
Mr Ron Marshman |
| Tel: +263 4 332 590 |
Tele: +44 20 7628 5518 |
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Fax: +263 4 332 496
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Fax: +44 20 7628 8555 |
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Email: info@zimplats.co.zw
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Email: ron@mining-investor.com
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