Mimosa’s revenue dips 32 percent on low metal prices

A conveyor belt carries ore extracted at Mimosa Platinum mine

Mimosa will spend about US$85 million on expansion which entails increasing plant and mine hoist capacity by 25-30 percent.

MIMOSA Platinum Mine’s revenue for the half year to 31 December 2015 declined 32 percent to US$99 million on low metal prices but the mine continues to operate above design capacity.

Parent company Aquarius Platinum said PGM production at the Zimbabwean mine increased 2% to 120,429 PGM ounces on prior year’s level.

Mimosa recorded an EBITDA profit of $4 mln and a net loss before tax of $51 mln. The miner said despite consistent production, the 83% decrease from $27 mln to $4 mln in EBITDA compared to the previous comparative period was driven by lower PGM prices which were down 26%.

Production however increased by 2% whilst unit costs were down 2% to $784. Mining cash costs increased 9% to $76 per tonne. The average US Dollar PGM basket price of $825 during the six months was 29% lower compared with the comparative period.

Volumes processed increased 1% to 1.310 mln tonnes while the head grade increased slightly to 3.65g/t. Recoveries improved 1% to 78.6% and cash margin for the period decreased to 6% from 35%.

The total stay in business capital expenditure at Mimosa was $18 mln ($150 per PGM ounce), spent mainly on mobile equipment, support and drill rigs and LHDs, the conveyor belt extension, down dip development and ventilation walls.

Meanwhile, the company will spend about $85 mln on expansion which entails increasing plant and mine hoist capacity by 25%-30%.The project which feasibility studies are under consideration also aims to deliver additional circa 60,000 PGM ounces p.a.The project is expected to be complete in 24 months from the day of commencement.

Commenting on the performance Jean Nel, CEO Aquarius Platinum said both Mimosa and Kroondal in South Africa produced ahead of guidance and at reduced costs during the half year.

Nel said in order to ensure sustainability in this macro environment further cost saving initiatives were implemented at Kroondal, and specifically Mimosa, which management expects to result in unit costs reducing further going forward. FinX

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