Highlights
Mimosa, a 50:50 joint venture with Aquarius, is located on the Wedza Geological Complex, in the southern portion of the Great Dyke, east of Bulawayo, in Zimbabwe. The operation is currently a semi-mechanised, shallow, underground mine, operating at a depth of 204m and accessed by means of a decline shaft. It has a mill and concentrator on surface. There is a life-of-mine offtake agreement with IRS.
FY2007 was a sad year for Mimosa with three fatalities during the year. There were no fatalities in FY2006. This unfortunately also coincided with a deterioration in the LTIFR which rose to 1.74 per million manhours from 1.25 the previous year.
The decline can be attributed to some degree to a higher turnover among employees, especially at supervisory level, which resulted in less-than-ideal adherence to safety standards and inappropriate attitudes towards safety. Management has recommitted itself to ensuring the strict enforcement of safety standards and a reversal of this negative trend. More information on safety may be found in the corporate responsibility section.
Mimosa produced a total of 78,200oz of platinum-in-concentrate for FY2007, an increase of 8.3% on FY2006. Underground production of 1.9Mt exceeded expectations but tonnes milled of 1.7Mt were lower than planned. Grades remained constant at 3.7g/t (3PGE+Au).
Underground production successfully ramped up in line with the $28.8 million (R207 million) Wedza Phase V expansion project announced in January 2007. The project also entailed an expansion of concentrator capacity to 175,000t milled a month. However, major equipment failures at the concentrator during the third quarter of the year delayed commissioning and contributed in some measure to the build-up in the stockpile.
The mill has now been repaired and all systems are back on track. Record quarterly throughput was achieved in the fourth quarter of the year, helping to make up some of the lost production.
Wedza Phase V is now scheduled for hot commissioning in November 2007 and will be finalised in January 2008. At year-end, the stockpile stood at two months of production.
The supply of power remains a problem, mainly in terms of load shedding. Mimosa continues to interact with ZESA, the national power authority in Zimbabwe, to ensure that power to meet the mill’s minimum requirements will be maintained. In addition, the mine is notified as to when load shedding will occur so that the necessary precautions can be taken. Mimosa is currently in negotiations to import power directly from Mozambique.
Year-on-year, costs per tonne milled were 8% lower at $35.
| FY2007 | FY2006 | % change | ||
|---|---|---|---|---|
| Sales | (Rm) | 1,685.9 | 872.0 | 93.3 |
| Platinum | 687.2 | 443.3 | 55.0 | |
| Palladium | 144.6 | 83.2 | 73.8 | |
| Rhodium | 210.3 | 86.8 | 142.3 | |
| Nickel | 491.0 | 179.7 | 173.2 | |
| Other | 152.8 | 79.0 | 93.4 | |
| Cost of sales | (522.9) | (413.8) | (26.4) | |
| Mining operations | (284.8) | (268.6) | (6.0) | |
| Concentrating operations | (79.3) | (62.8) | (26.3) | |
| Treatment charges | (88.4) | (69.3) | (27.6) | |
| Amortisation | (63.8) | (42.0) | (51.9) | |
| (Decrease)/increase in inventory | (6.6) | 28.9 | (122.8) | |
| Gross profit | 1,163.0 | 458.2 | 153.8 | |
| 50% Gross profit attributable to Implats | 581.5 | 229.0 | 153.9 | |
| Inter-company adjustment * | 4.8 | (57.4) | 108 | |
| Gross profit in Implats group | 586.3 | 171.6 | 241.7 | |
| * Adjustment note: The adjustment relates to sales from Mimosa to the Implats group which at year-end was still in the pipeline |
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| Gross margin | (%) | 69.0 | 52.5 | 31.3 |
| Other operating costs | (59.2) | (39.2) | (51.0) | |
| Royalty expense | (38.6) | (20.1) | (92.0) | |
| Sales volumes in concentrate | ||||
| Platinum | (000oz) | 77.3 | 70.4 | 9.8 |
| Palladium | (000oz) | 58.5 | 53.2 | 10.0 |
| Rhodium | (000oz) | 6.0 | 5.4 | 11.1 |
| Nickel | (t) | 2,149 | 1,960 | 9.6 |
| Prices achieved in concentrate | ||||
| Platinum | ($/oz) | 1,237 | 986 | 25.4 |
| Palladium | ($/oz) | 343 | 245 | 40.4 |
| Rhodium | ($/oz) | 4,864 | 2,536 | 91.8 |
| Nickel | ($/t) | 31,763 | 14,353 | 121.3 |
| Exchange rate achieved | (R/US$) | 7.19 | 6.39 | 12.6 |
| Production | ||||
| Tonnes milled ex-mine | (000 ) | 1,692 | 1,532 | 10.5 |
| Platinum in concentrate | (000oz) | 78.2 | 72.2 | 8.3 |
| Palladium in concentrate | (000oz) | 59.5 | 54.7 | 8.8 |
| Rhodium in concentrate | (000oz) | 6.1 | 5.6 | 8.9 |
| Nickel in concentrate | (t) | 2,091 | 1,958 | 6.8 |
| PGM in concentrate | (000oz) | 163.3 | 150.5 | 8.5 |
| Total cost | 423.3 | 370.6 | (14.2) | |
| per tonne milled | (R/t) | 250 | 242 | (3.3) |
| ($/t) | 35 | 38 | 7.9 | |
| per PGM ounce in concentrate | (R/oz) | 2,592 | 2,462 | (5.3) |
| ($/oz) | 360 | 385 | 6.5 | |
| per platinum ounce in concentrate | (R/oz) | 5,413 | 5,133 | (5.5) |
| ($/oz) | 753 | 803 | 6.2 | |
| Capital expenditure | (Rm) | 113.0 | 208.4 | 45.8 |
| (US$m) | 16 | 33 | 51.5 |
Capital expenditure for FY2007 totalled $16 million (R113 million), with by far the largest portion of $6 million (R43 million) being spent on the Wedza Phase V expansion. An additional $15 million will be required to complete the processing aspect of Wedza Phase V.
Additional exploratory drilling is to be undertaken at North Hill so as to further delineate the orebody. Mimosa will continue to investigate ways and means of optimising the plant (Wedza Phase VI).
Impala Platinum Holdings Limited — Annual Report 2007