Harare – Local platinum miner, Zimplats a member of the Implats Group reported a 8% increase in revenue to US$631 million for the year ended 30 June 2019 from US$582.5 million in FY2018 attributable mainly to the prices of palladium, rhodhium, ruthenimu and iridium.
According to the company’s report, the four elements platinum, palladium, rhodium and gold recorded a marginal increase in sales volumes to 542 500 ounces from 542 085 ounces in the prior year.
Zimplats which ranks as Zimbabwe’s largest platinum miner located on the Hartley Geological Complex on the Zimbabwean Great Dyke south west of Harare, said gross profit margin improved to 29% from 26% in FY2018 mainly due to the improvement in average metal prices achieved.
“Cost of sales increased by 4% to US$447.7 million from US$431.3 million in FY2018, mainly due to the increase in royalty, insurance premiums and provision for share-based compensation,” the miner added.
Over the course of the period under review, the Reserve Bank of Zimbabwe (RBZ) in February 2019 liberalised the US$ exchange rate against Real Time Gross Settlement (RTGS) balances and bond notes and all currencies in the multi-currency basket as it sought to formalise trade in foreign currency.
Zimplats said the translation of monetary assets and liabilities denominated in RTGS$ to US$ resulted in the recognition of a net exchange loss of US$20 million for the year.
The Group said its results benefited from an export incentive of US$36.4 million during the period under review compared to US$13.6 million for the prior year and the recognition of a US$9.6 million refund due from the Zimbabwe Revenue Authority (ZIMRA).
“The US$9.6 million refund arose from a court ruling in favour of the Group related to fines inappropriately levied by ZIMRA in the disputed customs duty rebates case,” the Group said.
“Resultantly, profit before income tax for the year increased to US$205.3 million from US$166 million in FY2018.”
The Group generated US$189.4 million from operating activities during the period under review, shedding 3% from US$195 recorded in FY2018.
Despite the strong results, the Group’s operations failed to surpass prior year’s performance.
During the period under review, both mining and milling operations produced 6.7 million tonnes slightly lower compared to 6.8 million tonnes produced in FY2018 and 6.5 million tonnes from 6.6 million tonnes respectively.
“Total ore mined decreased by 2% compared to the previous year which included 713 000 tonnes from the discontinued South Pit Mine,” the Group said.
“Tonnes mined from the underground mines increased by 9% compared to the previous year, driven mainly by Bimha Mine which operated at design capacity throughout the year, and improved team productivity arising from the implementation of a successful team restructuring exercise.”
The Group’s 4E head grade, at 3.23g/t, was marginally below the prior year mainly due to dilution arising from faulting and re-establishments at Ngwarati and Rukodzi mines where mining is approaching the boundaries of the mine footprint.
The 1% decrease in ore milled was attributed to lower milling rates achieved at the SMC concentrator where ore particle size distribution changed adversely following the closure of the South Pit Mine on 31 March 2018.
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Raynold Mhotseka is a Journalism and Media Studies student at the University of Zimbabwe. He serves as a news writer at financial research firm, Equity Axis where he is currently on attachment. He can be contacted through the following email links, email@example.com and firstname.lastname@example.org.