By Own Correspondent – Thursday 28 February 2019
HARARE (Mining Index) – ZIMBABWE Platinum (ZIMPLATS) say platinum production for the half year ending December 31 2018 decreased marginally by one percent to 135 430 ounces from 136 152 ounces.
The company said the marginal decline was due to the decrease in volume of ore milled.
“Tonnes milled decreased by 1% to 3.31 million tonnes compared to the same period last year. This was attributed to a decrease in the milling rates at the Selous Metallurgical Complex (SMC) concentrator arising from the change in particle size distribution after the closure of the South Pit Mine in April 2018.”
“4E metal production for the half year also decreased by 1% to 273 655 ounces from 275 224 ounces in line with mill volumes,” said Zimplats in a statement.
Platinum, palladium, rhodium and gold 4E mill head grade at 3.23g/t remained largely unchanged from the same period last year reflecting sustained grade control at the Group’s operations.
Tonnes mined during the half year decreased by 5% to 3.3 million tonnes compared to the same period last year mainly due to the closure of the South Pit Mine in March 2018.
The group noted the increase in production from underground mines, mainly from Mupfuti and Bimha mines of 266 300 tonnes was less than the contribution from the South Pit Mine of 456 200 tonnes in the same period last year.
On its capital projects, Bimha Mine which is undergoing redevelopment achieved design production capacity in April 2018 as planned.
Installation of the north underground crusher and the ore-conveyancing system were completed during the period under review while the south underground crusher and ore-conveyancing system are scheduled for commissioning in August 2019, with US$76 million spent as at 31 December 2018 against a total project budget of US$101 million.
The development of Mupani Mine, the replacement for Ngwarati and Rukodzi mines is ahead of schedule, targeting ore contact by August 2019 and full production in August 2025, while US$51 million spent as at 31 December 2018 against an approved total project budget of US$264 million.
The half year ended 31 December 2018 benefited from export incentive of US$29.4 million up from US$5.6 million in 2017 plus the US$9.6 million refund from the Zimbabwe Revenue Authority (ZIMRA).
Rehabilitation of the old open-pit mines progressed well with 1 175 741 loose cubic meters moved to cover the voids compared to 179 020 loose cubic metres for the same period last year.
“Cost of sales at US$187.1 million was 2% higher than the same period last year’s US$184 million mainly due to inflation. This was partly offset by the substitution of open-pit ore with lower cost underground ore following the closure of the South Pit Mine in April 2018 and decrease in depreciation arising from the conversion of upper ores resources to reserves,” said Zimplats.
Cash operating cost per platinum ounce produced improved by 3% to US$1 295 from US$1 331 reported in the same period last year.
Other contributors to the increase was the substitution of open-pit ore with lower cost underground ore, decrease in selling expenses and lower cost of consumables sourced from South Africa which benefited from the weakening of the South African Rand against the United States Dollar.
Revenue for the half year increased by 2% to US$291.8 million compared to the same period last year driven by a 1% increase in both metal prices and 4E sales volumes.
Gross revenue per platinum ounce for the half year at US$2 186 was 1% higher than the US$2 154 reported during the same period last year.
Administrative expenses for the half year at US$28.1 million were 22% higher than the US$23 million reported during the same period last year mainly due to higher insurance premiums in the current period.
Selling and distribution expenses for the half year at US$1.1 million were 80% lower than same period last year due to the decrease in transport cost in line with the volume of material moved as no concentrates were exported in the current half year. Transportation of concentrates typically costs more than transportation of matte.
Royalty and commission expense for the half year increased by 74% from US$7 million reported in the same period last year to US$12.2 million mainly due to an increase in royalty rates after migrating from a special mining lease to a mining lease on 31 May 2018.
Resultantly, profit before income tax for the period at US$98.5 million was 60% higher than US$61.4 million recorded in the same period last year.
Zimplats board has declared an interim dividend of US$20 million, equating to 18.58 US cents per share on 8 February 2019.
“Income tax for the half year at US$18.1 million (2017: US$40.3 million) resulted in a profit after tax for the period of US$80.4 million compared to US$21 million achieved in the same period last year.” ENDS//