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Impala turns down risk factor Posted: Fri, 09 Jun 2006 [miningmx.com] -- FORWARD momentum is high at Impala Platinum (Implats) following a series of transactions that tackle a train of non-mining risks. The first was an announcement on 31 May that Implats – through its 86% owned subsidiary Zimplats – had agreed to cede claims to some of its ore resources in Zimbabwe. A week later, on 7 May, Implats unveiled a proposed deal to sell 15% of the Marula mine on the eastern Bushveld, a mine that’s planned to produce 140,000 oz/year. David Brown, chief financial officer, said the company’s application for new order mining licences has been filed with South Africa’s Minerals & Energy Department. “We believe we comply with black empowerment legislation.” Over and above those advances, the prospect of improvements to the Royalty Bill – proposing a tax on mining revenues, but releasing the company from the payment of so-called double royalties – provides a massive lift. Implats’s complaint was that it was unfair to pay a royalty to Royal Bafokeng Resources – incidentally, its main empowerment partner – and a second one to the State. All of which suggests Implats has done much to “de-risk” itself of late, a development that might help shore up recent selling of its stock. The price has been under pressure after peaking at R137/share. Fearing a metal price correction – the platinum price has struck record levels this year – investors have been reversing out of commodity shares. “Never say never, I agree. But we’ve had a mining lease agreement with the Zimbabwean authorities for five years and they’ve honoured it,” said Brown of the security of its deal in Zimbabwe. The Zimbabwean government has been threatening to upend its platinum investors lately with its “indigenisation plan” in which it will take 51% of assets. There’s no certainty on whether indigenisation will result in 51% of assets in the Zimbabwean government’s hands. However, an agreement to cede some of Zimplats’s mineral resources in Zimbabwe has earned Implats a $50m cash credit – or around a 30% empowerment credit.Free news alerts: click here to subscribe
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