Zimplats’ revenue scales up 29% despite loss in sales volumes

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  • Tonnes milled increased by 2%
  • Total cash costs rose by 3% compared to the same period last year
  • Sales volumes however declined by 12%

Harare – Zimplats, a subsidiary of one of the world’s foremost producer of platinum and associated platinum group metals, Impala Platinum (Implats) recorded a marginal increase in production for the half year period to 31 December 2019 following processing maintenance undertaken by the company.

As a result the company recorded a 12% decline in sales volumes which however did not have a negative impact on the revenue performance.

Half year revenue increased by 29% to US$377.7 million compared to the same period last year largely driven by an increase in average metal prices. The gross revenue per 6E ounce for the half year at US$1 494 was 47% higher than the US$1 018 for the same period last year.

In the half year interim results publication, Zimplats said, “Tonnes milled increased by 2% to 3.4 million tonnes compared to the same period last year.”

The company attributed the increase to an increase in the milling rates and good running time at both concentrators.

“Selous Metallurgical Complex concentrator benefited from the positive impact of the High Pressure Grinding Rolls (HPGR) project which was commissioned in the second quarter of the year under review. The Ngezi concentrator achieved a higher average milling rate due to a steady ore supply.”  said Alex Mhembere, the Chief Executive Officer.

Tonnes mined during the half year increased by 9% to 3.6 million tonnes compared to the same period last year benefiting from improved fleet productivity and additional tonnage from Mupani Mine which is still under development.

Meanwhile, 6E production in matte, including concentrates sold, reduced by 7% to 267 366 ounces form 289 010 ounces due to the temporary increase in smelter revert inventory following the three-month furnace rebuild.

The reduction in 6E production and increase in selling expenses due to higher volume of concentrate sales during the smelter shutdown resulted in a 6% increase in cash operating cost per 6E ounce produced. US$641 was recorded compared to US$607 in the prior period.

Nevertheless, the group said that decline development at Mupani Mine earmarked to replace Ngwarati and Rukodzi mines which deplete in FY2022 and FY2025 respectively remains ahead of schedule with two projects fleets currently developing in both ore and waste.

The mine is set to receive the first fleet from Rukodzi in the second half of the financial year. A total of 115 316 tonnes was mined in the first half year at an average grade of 3,07g/t, bringing the production to date to 127 552 tonnes at an average head grade of 3,03g/t 4E.

The infrastructure focus is on commissioning the surface ore handling and crushing plant in March 2020. The raise bore contractor has been mobilised to site to establish two exhaust ventilation raises, the first of which is due for completion in April 2020. A total of US$79.4 million out of the budgeted US$264 million had been spent by the end of the half year.

Zimplats also said that the redevelopment of Bimha mine is progressing well as the installation of the south underground crusher and the ore-conveyancing system were completed during the period under review.

“The focus is now on completing the two underground workshops. A total of US$90 million had been spent as at 31 December 2019 against a project budget of US$101 million.”  Mhembere said.

On the outlook, Mhembere said, “The future of the Company is optimistic with the resurgence of prices of some commodities on the world market to offset the challenging operating environment. Management continues to focus on safety, achieving production volumes and preserving cash through cost management and optimisation of capital expenditure. The Company will continue to foster cordial working relationships with all its stakeholders.”

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