Zimplats posts a US$1,8 million loss in 2015 Q4, on seven percent percent decrease in volumes.

Zimplats Bimha

This resulted in the Q4 metal produced the in converter matte falling only three percent from Q3 volumes.

ZIMPLATS posted an 11 percent decline in revenues in the last quarter of 2015 from US$108,076 recorded in Q3 to US$96, 317, largely on the back of slumping metal prices and a two percent drop in sales volumes for the period.

Year on year, the Group`s Q4 revenues fell by a modest four percent. A total loss from operations after royalties of US$1,8 million was recorded for the quarter.

There was a marginal increase in the group`s operating costs, which rose slightly by one percent from the Q3 figures, in the period under review. In the 6 months to December 2015, procurement costs totaling US$140 million, constituted the bulk of Zimplats` operating costs.

Employment costs at US$34 million were the second biggest cost center, followed by Capital expenditure and payments to government which stood at US$28 million and US$13 million respectively.

Ore mined increased by one percent from Q3 volumes mainly due to the 12,800 tonnes increase in ore mined from the open pit operation. Production from the underground mines remained unchanged from the previous quarter, in the quarter under review.

The volume of ore milled in Q4 decreased by seven percent from the previous quarter due to lower operating time as the mills for the two concentrators were re-lined during the period under review. However, despite the 7% decrease in the metal produced by the concentrators during the period, the smelter managed to process approximately 1,400 tonnes of concentrates from the stockpile, in addition to all the concentrates produced in the period.

This resulted in the Q4 metal produced the in converter matte falling only three percent from Q3 volumes.

Global platinum prices averaged $907/Oz in Q4, which was a 26% decline year-on-year from the $1,229/Oz realised in the previous comparable period. Palladium and Rhodium prices also fell 1% and 7% respectively from the Q3 market prices.

Meanwhile, the Ngezi Phase 2 expansion project implementation is progressing steadily, with a total of $447 mln of the project budget having been spent as at 31 December 2015. Implementation of the outstanding components of the Phase 2 expansion project remains on schedule for overall project completion, later this year.

Zimplats has spent a total of 12.2 million on the refurbishment of the Selous Metallurgical Complex base metal refinery project and US$9.9 million was committed as at 31 December 2015. The group has said that, cash flow constraints being fueled by falling commodity prices have resulted in the reprioritisation of capital projects, with some projects being deferred to future periods.

The group also says that the Bimha Mine re-development is on schedule to reach full production in April 2018 as planned.

Furthermore, the $34 mln debt owed to Zimbabwe Platinum Mines (Pvt) Ltd is set to be taken over by government in line with the provisions of the Reserve Bank of Zimbabwe Debt Assumption Bill that was passed last year, subject to the debt being validated and reconciled by the Ministry of Finance and Economic Development.

The company is awaiting approval from the RBZ for the sale of a 10% equity stake in the operating subsidiary to the Zimplats Employee Share Ownership Trust (ESOT) as part of the company’s indigenisation implementation plan. Zimplats says, it will continue engaging with government on the modalities of this transaction, following the recent amendments to the country`s indigenisation law.

Zimplats has said that it remains in negotiations with government over the state`s intention to compulsorily acquire 27,948 ha within its operating subsidiary`s special mining lease zone.

Zimplats is majority owned by the Johannesburg Stock Exchange listed Impala Platinum BV, which has an 87% stake in the company. FinX

Follow us on Twitter on @FingazLive and on Facebook – The Financial Gazette