New Zimbabwe.com

Mimosa expansion decision next year

AQUARIUS Platinum said it will likely decide by next year whether to expand the Mimosa joint venture with Impala Platinum Holdings, the world’s second-biggest producer of the metal.
Mimosa is considering adding 70,000 ounces of annual production capacity to the mine, which extracted about 220,000 ounces of platinum group metals in the year ended June, Jean Nel, chief executive officer of Perth-based Aquarius, said Thursday.
The project will cost an estimated $70 million, Nel said.
Proposals to comply with the country’s indigenization laws submitted by local units of Anglo American Platinum Ltd., Impala and Aquarius have yet to be agreed to.
“The project is very attractive from a returns perspective because effectively there’s 70,000 ounces of additional production at very little added fixed costs,” Nel said.
“The project is evidently self-fundable” at current projections for platinum-group metals prices, he said.
Mimosa has been in contact with Zimbabwean officials on a final agreement to comply with the ownership law, Nel said.
“We really do have good relations in Zimbabwe,” he said.
The mine and shareholders’ boards will consider potential “adverse changes” in the country before making a final decision to allocate capital, Nel said.
Mimosa plans to spend $40 million over five years to replace mined-out areas, Nel said.
Meanwhile revenue at Mimosa fell by four percent to $260 million in the full year to June due to lower metal prices, with the company expressing concern over the impact of proposed new tax regime on income.
The dip in revenue was despite a four percent increase in production.
Aquarius, which released its full year financials on Thursday, said the result was achieved on production of 110,681 platinum group metal (PGM) ounces attributable to Aquarius.
Mining cash costs decreased three percent to $77 per tonne and cash costs for the year were one percent higher at $878 per PGM ounce, inclusive of labour retrenchment costs of $5.5 million.
Cash margin for the period decreased to 24 percent from 26 percent in the prior year.
Mimosa’s PGM basket price for the year was $1,133 per PGM ounce, while the company’s cash hold as at June 30 was $14 million.
“Operating costs were well within inflationary targets and will continue to be a point of focus particularly in the ongoing low metal price environment,” Aquarius said in the statement accompanying the results.Advertisement