Zimplats up quarterly production

I-Net Bridge | Thu, 29 Oct 2009 16:41
[miningmx.com] -- Zimbabwean platinum producer Zimplats, which is 87% held by Impala Platinum (IMP), on Thursday reported a 51% increase in quarter-on-quarter platinum group metals (PGM) production to 72,027 ounces in the three months to end September from 47,746 ounces in the June quarter 2009.

PGM sales were 47% higher quarter-on-quarter to 71,261 ounces from 48,391 ounces in the previous quarter.

Increased production and sales volumes pushed revenue up 47% to US$64.6m in the three months to end September from US$44.1m in the June quarter.

Zimplats said the climb in PGM production and sales were a reflection of the higher milled tonnes following the commissioning of the Ngezi concentrator.

Ramping up of underground production continued and as a result total ore mined was 18% higher than the previous quarter. The ore stockpile at the end of September was 838,000 tonnes.

The Ngezi concentrator was successfully commissioned in late July and ramped up to full production capacity by end of September 2009.

Consequently, tonnes milled were 61% above the previous quarter. Operating costs for the quarter increased by 12% to US$43.9 million from US$39 million in June, which resulted in operating profit climbing to US$20.7 million in the September quarter from US$5 million the quarter before.

"Whilst the continued strengthening of the South African rand impacted negatively on operating costs this was somewhat abated by the removal of import duties on goods manufactured within the SADC region," said Zimplats.

Average platinum prices increased only fractionally to US$1,237 per ounce from US$1,225 per ounce, but this is significantly higher than the US$859 per ounce average fetched in the December quarter.

"Some increases in metal prices were recorded in the quarter. Investor activity and the Chinese jewellery market demand have seen a further upward movement in prices since the end of the quarter," said the company.

But it cautioned that the long-term fortunes of the PGM sector remain closely linked to those of the automotive industry.

Regarding the Phase 1 Ngezi expansion project, the concentrator was officially opened in mid-October after reaching full production by September.

The development of the Portal 4 underground mine is on schedule to reach full production by May 2011.

Zimplats said the project was still expected to be completed within the approved cost budget.

"Preliminary evaluation work on the second phase of the expansion programme has commenced and is expected to be completed in the first quarter of 2010. This phase will consist of a 2 million tonne per annum underground mine, a concentrator module of the same capacity and related infrastructure," Zimplats said.