Zimbabwe Platinum Mines - Imara

NATURE OF OPERATIONS
Zimplats Holdings Limited is a mining group which explores for
and produces platinum group metals (PGMs) in Zimbabwe. The
company's exploration projects include Ngezi South and North,
Hartley Platinum and Selous. It is a company incorporated in
Guernsey, British Isles and is listed on the Australian Stock Exchange
(ASX). Zimplats is 87% owned by Impala Platinum Holdings (IMP: SJ)
of South Africa. It operates from two main sites (Ngezi and Selous)
and employs underground mining techniques (board and pillar
method) to extract PGMs. We note that six metals (Platinum,
Palladium, Gold, Rhodium, Nickel and Lithium) contribute c99% of
total revenues whilst other metals contribute 1.0%.
Zimplats has a vision to be the leading platinum company in
Zimbabwe, producing 1.0m platinum oz per annum. In line with its
vision the company has embarked on a phased expansion drive to
ramp up production levels. For example, the Phase II project which
is currently underway is the second stage in a series of planned
expansions to grow the business.
Zimplats currently has three underground mines. It is worth noting
that Zimpats has shifted away from open pit mining and now employs
underground mining through its three mines (Ngwarati, Rukodzi and
Bimha Mine). Ngwarati and Rukodzi Mine have a combined capacity
in the region of 2.2mtpa whereas the new Bimha Mine has a capacity
of around 2.0mtpa. This implies that the group currently has an
estimated capacity of 4.2m tonnes of ore per annum. However, the
Phase II expansion project is expected to add another 2.0mtpa
through the Mupfuti Mine (Portal 3).
Top 10 Shareholders
Impala Platinum BV 87.00%
HSBC Custody Nominees (Australia) 4.87%
Merrill Lynch (Australia) 2.53%
National Nominees Limited 1.04%
J P Morgan Nominees (Australia) 0.54%
Citicorp Nominees 0.50%
J P Morgan Nominees (Australia) 0.44%
Primeoak Ltd 0.30%
Credit Suisse Securities 0.29%
Minerva Trust Company 0.19%
Source: Company Reports
Group Structure
Zimplats also operates two concentrators at Ngezi and the Selous
Metallurgical Complex (SMC) with a combined capacity of
4.2mtpa. The concentrators are currently operating at full capacity.
Furthermore, Zimplats also has a smelter at the SMC with the
capacity to process 6.2mtpa of concentrate.
Refining is done through parent company’s Impala Refinery
Services (IRS). From the 4.2m tonnes of ore mined, a 3.0% (127k
tonnes) concentrate is produced. This gives about 7.5k tonnes of
white matte that is then exported to South Africa to a Base Metal
Refinery (Impala Refinery Services). Zimplats receives approximately
90% of the value of PGMs and 80% of the value of base metals from
IRS. The underlying fact is that at a national ouput of approximately
340k pt oz per annum it is uneconomic to set up a Refinery in
Zimbabwe. The minimum threshold would be in the region of 500k pt
oz.
Source: Company Reports
Location of PGM Mining Sites
GEOLOGICAL FEATURES
Attractive Great Dyke geology. We opine that the Ngezi resources
represent one of the world’s largest block of potentially economic Pt
mineralisation. The resource is the second-largest resource
controlled by any company in Southern Africa.
Lower grades, but shallow depth. The PGMs mined at Zimplats are
generally a low grade type (3.4g/ tonne of ore) when compared with
existing, conventionally mined reserves in South Africa. The reserves
also suffer from small scale faulting, jointing and rolling reef
conditions. However, Zimplats’ main strength lies in the depth of the
ore, which is relatively shallow (100m deep) compared with South
Africa platinum mines which could be as deep at 2,000m.
Source: Company Reports
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