Zimplats' Quarterly Reports
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REPORT FOR THE QUARTER ENDED 31 DECEMBER 2002
HIGHLIGHTS
- Makwiro operating cash flow increased to US$8 million
for the quarter.
- Makwiro production 41,290 ounces 4E for the quarter at
cash costs of $250 per oz.
- A scoping study envisages a first phase expansion of an
additional 200,000 oz pa increasing production to 400,000
oz pa by end 2005.
- The bankable feasibility study for this first phase
expansion of 200,000 oz 4E per annum commenced and is
expected to be completed by December 2003.
- Attributable ore reserves increased more than 10-fold
from 3.2 million ounces to 34 million ounces 4E due to the
success of the trial mining.
PRODUCTION
- Makwiro Platinum Mines (Private) Limited -
"Makwiro"
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The December quarter is the third quarter of production for
Zimplats’ 70% owned subsidiary Makwiro and the second quarter for the
financial year ending June 2003.
Ngezi Platinum Mine
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December Quarter
2002
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September Quarter
2002
|
June Quarter
2002
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| Total volume mined |
BCMs (million) |
2.3
|
2.1
|
2.2
|
| Ore volume mined |
Tonnes (000’s) |
545
|
511
|
377
|
| Grade |
4E (average) g/t |
3.2
|
3.1
|
2.9
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Operations for the quarter show continued improvement in the
volumes of waste and ore mined and grade achieved, which are
now within the feasibility study steady state parameters.
Selous Metallurgical Complex
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December Quarter
2002
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September Quarter
2002
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June Quarter
2002
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| Tonnes milled |
000's |
462
|
495
|
365
|
| 4E in matte produced |
Ounces |
41,290
|
40,455
|
37,236
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Ounces 4E produced is below target due to the SAG mill
liner constraints. New liners will be installed during the
March quarter.
Concentrator
The SAG mill liner set installed in June
and reported on in the September quarter performed
satisfactorily. However, the replacement set installed in the
November reline proved to be of inferior quality resulting in
substantial mill down-time during the quarter. A replacement
set of liners from an internationally reputable mill liner
manufacturer will be installed in February 2003.
The March 2003 quarter milling volume and
metal production are expected to be in line with those
achieved this quarter.
Smelter
The smelter operated satisfactorily during the quarter.
The new Larox filter press was successfully commissioned in
December 2002. Adequate filter press capacity now exists to
handle all the concentrate produced.
| Sales Exports
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December Quarter
2002
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September Quarter
2002
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June Quarter
2002
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| Platinum |
Ounces |
19,373
|
18,769
|
18,680
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| Palladium |
Ounces |
16,870
|
16,744
|
15,934
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| Gold |
Ounces |
2,131
|
1,943
|
2,121
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| Rhodium |
Ounces |
1,831
|
1,715
|
1,709
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| 4E
Total |
Ounces |
40,205
|
39,171
|
38,444
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| Nickel |
Tonnes |
335
|
307
|
211
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| Copper |
Tonnes |
233
|
212
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154
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NGEZI
UNDERGROUND TRIAL MINE |
A further 106 metres of development has
been completed on the three declines during the quarter. A
known major fault has been successfully negotiated. This
resulted in the delay of developing the rooms, which will now
be developed in the March quarter.
The experience gained to date, supported by
ongoing independent geotechnical reviews, confirms the
suitability of this ore body to be exploited by the mechanised
room and pillar mining method.
In addition, channel sampling of the
sidewalls confirms the suitability of the proposed grade
control method for identification and mining on reef.
Information obtained from the underground
trial mine at Ngezi, together with economic
studies has facilitated the conversion of 31
million ounces of 4E resources to reserve. A
full revised ore reserve and mineral
resource statement is detailed at the end of
this report.
The 31 million ounce ore reserve increase
announced above only encompasses ore in the Ngezi area, which
makes up the southern quarter of Zimplats’ tenements. It is
shallow dipping (less than 12º dip), greater that 1.6 metres
in width, and is geotechnically competent. The ore body lies
between a depth of 50 metres and 600 metres, with an average
depth of 250 metres. These limits were selected to define an
ore reserve that is easily accessed and competitively
exploited by mechanised room and pillar mining.
The scoping study envisages a first phase
expansion of a further 200,000 ounces 4E per annum by end
2005. The first phase expansion will also include basic
infrastructure to facilitate modular growth to a projected one
million ounces 4E operation within a time frame of ten years,
subject to market conditions. The study indicates that there
is potential for significant operating cost reduction.
A bankable feasibility study on the phase
one expansion is in progress and due for completion towards
the end of this calendar year.
Five infill drill-holes, totalling 715 metres, at a total
cost of US$35,000 were completed during the quarter in the
northern tenement area. The purpose of this drilling was for a
preliminary evaluation of the northern closure of Zimplats’
tenements, which is believed to be a mirror image of the Ngezi
area. Assay results will be received during the next quarter.
The Makwiro revenue and operating cost for the December quarter, which is 70% attributable to Zimplats, is tabled below:
| Operating cash flow |
December Quarter 2002
US$ ’000
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September Quarter 2002
US$ ’000
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June Quarter 2002
US$ ’000
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| Revenue |
17,244
|
16,900
|
16,534
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| Operating Cost |
9,021
|
9,448
|
11,901
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| Operating Cash Flow |
8,223
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7,452
|
4,633
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| Cash and total cost of
production
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December Quarter 2002
US$
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September Quarter 2002
US$
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June Quarter 2002
US$
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| Cash cost of production 4E
ounce
|
250
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250
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328
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| Less by-product credits |
(42)
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(51)
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(41)
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Net cash cost per 4E ounce |
208
|
199
|
287
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| Amortisation and depreciation
|
36
|
37
|
51
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Total cost per 4E ounce |
244
|
236
|
338
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Surplus per 4E ounce (*) |
186
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190
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121
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*(Revenue, less total cost per 4E ounce).
The first repayment of the Absa project
loan is due to be made in the next quarter. The repayment will
be US$8.6 million.
The recently introduced amendments to the
exchange control regulations in Zimbabwe, together with high
local inflation will increase local operating costs in the
coming quarter. This, along with the increased world fuel
prices, is expected to result in reducing the March quarter
profits to the budgeted level.
The average pgm and gold prices for the past 4 quarters are as follows:
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December 2002
Quarter
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September 2002
Quarter
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June 2002 Quarter
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March 2002 Quarter
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| Platinum |
598
|
559
|
546
|
488
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| Palladium |
244
|
330
|
358
|
390
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| Gold |
333
|
313
|
319
|
294
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| Rhodium |
598
|
749
|
916
|
990
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Platinum fundamentals are strong due to
jewellery and automotive industry demands. Palladium and
rhodium prices are under pressure due to weak fundamentals,
although the price differential between platinum and palladium
may improve demand for palladium.
The gold price is expected to soften in the
event that the Gulf crisis is resolved.
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Capital Structure
As at the 31st December 2002, 88,561,153 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. 1,335,000 options were issued and
199,333 exercised, during the quarter.
Share Options Outstanding
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Quantity
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Exercisable Price
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Expiry
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|
263,000 |
A$0.40 |
31/12/2004 |
| 1,108,667 |
A$0.50 |
31/12/2005 |
|
340,000 |
A$0.66 |
28/09/2006 |
| 1,280,000 |
A$0.88 |
23/11/2006 |
| 1,060,000 |
A$1.60 |
29/10/2007 |
|
275,000 |
A$1.43 |
20/11/2007 |
Major shareholders
| Impala Platinum Holdings
Limited |
36.00%
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| Absa Bank Limited |
14.94%
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| National Nominees Limited |
7.79%
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| Citicorp Nominees Pty
Limited |
5.46%
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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
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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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