Harare, Zimbabwe — 03 August 2012 – Zimbabwean platinum producer Zimplats “’ currently still 87% owned by Impala Platinum “’ has reported a good operational and cost performance for the second quarter of 2012, despite reduced profitability and cash generation due to depressed metal prices.
A results statement issued here said mining production was good at 4% above previous quarter. Head grade was, however, 2% lower than prior quarter owing to poor ground conditions encountered in some sections of the mines.
Tonnage milled was 8% higher than the previous quarter due to improved plant availabilities in contrast to the previous quarter when plant running time was affected by major plant maintenance shutdowns. 4E metal in matte production was 11% above previous quarter in line with the higher milled tonnage and the smelting of concentrates stockpiled in the previous quarter when the smelter was down for scheduled periodic maintenance, the statement added.
It went on to say that financial performance did not mirror a 13% increase in volume of metals sold due to depressed metal prices, with gross revenue per 4E ounce 21% lower than the previous quarter. Revenue thus amounted to US$114 million, 11% lower than the previous quarter. Operating costs were 17% above previous quarter in line with the higher sales volume.
Operating profit amounted to $25 million, 52% lower than the previous quarter. The depressed metal prices have put severe pressure on cash flows and the company will consequently have to secure higher levels of bank borrowings than originally envisaged.
Cash cost of production per 4E ounce was 22% lower than previous quarter driven mainly by higher production volume.. The company’s local spend (excluding payments to government and related institutions), at US$65 million or 54% of total payments, was satisfactory, said the statement.
During the quarter, Zimbabwe Platinum Mines (Private) Limited advanced a US$25 million loan to the power utility ZESA which was used to reduce the utility’s overdue indebtedness to Hidroelectrica de Cahora Bassa of Mozambique in respect of power imports. The loan facility enabled Zimbabwe to resume power imports from Mozambique to augment the country’s constrained power generation, and Zimplats is guaranteed uninterrupted power supplies for its operations for five years.
Implementation of the Ngezi Phase II expansion project progressed well in the quarter, and it remains on schedule for the commissioning of the concentrator plant in April 2013. However, due to the constrained cash flows, parts of the infrastructure component of the project have been rescheduled to subsequent years, the statement continued..
It added that a Joint Technical Committee comprising Government of Zimbabwe representatives and management had been set up to work through material issues pertaining to the indigenisation agreement. Discussions are on-going and shareholders will be updated on major developments.
Source: Zimplats. For further information, click here.