Platinum group metals miner Zimbabwe Platinum Mines (Zimplats) increased its mined tonnes by 9% year-on-year to 3.6-million tonnes for the six months ended December 31, as a result of improved fleet productivity and additional tonnes milled at the Mupani mine, which is still under development.

Tonnes milled increased by 2% to 3.4-million tonnes mainly owing to an increase in the milling rates at both concentrators, CEO Alexander Mhembere said in a statement on Thursday.

Zimplats’ Selous metallurgical complex concentrator benefited from the positive impact of the high-pressure grinding rolls (HPGR) project, which had been commissioned in the December quarter.

The Ngezi concentrator also achieved a higher average milling rate owing to a steady ore supply.

The mill head grade, at 3.48 g/t, remained largely unchanged and reflected sustained grade control at the group’s operations.

Production of platinum, palladium, rhodium, ruthenium, iridium and gold (6E), however, decreased by 7% to 267 366 oz, from 289 010 oz, owing to unfavourable furnace inventory movement on start-up (first fill) following a furnace rebuild shutdown.

During the half-year, 252 748 oz of 6E were sold, about 12% lower than the 286 760 oz reported in the same period last year owing to the lower production.

FINANCIALS

Meanwhile, Zimplats’s revenue increased by 29% year-on-year to $377.7-million for the six months under review and was largely driven by an increase in average metal prices.

The gross revenue per 6E ounce for the period was $1 494/oz – 47% higher than the $1 018/oz for the same period last year.

Zimplats’ $240.6-million cost of sales was, however, also 7% higher year-on-year, mainly owing to an increase in depreciation, royalties and share-based payments.

The increase in depreciation was a result of the higher asset base and a review of estimated useful lives of assets, and resultantly, Zimplats’ gross profit margin at 36% increased by 13% from 23% achieved in the same period last year.

Administrative expenses for the half-year at $3.7-million were 12% higher than the restated amount of $3.3-million incurred during the same period last year mainly owing to higher corporate social responsibility costs.

Cash operating cost at $641/oz was 6% higher than the $607/oz for the prior period, and was driven by a 7% reduction in 6E production and an increase in selling expenses owing to a higher volume of concentrate sales during the smelter shutdown.

Finance costs at $1.3-million were below the prior period owing to higher capitalised borrowing costs for the current period and a repayment of part of the Standard Bank of South Africa (SBSA) revolving credit facility (RCF) in the prior financial year.

The final instalment on the SBSA RCF was made in December and, as a result, profit before income tax for the period, at $126.5-million, was 28% higher than $98.5-million recorded in the same period last year.

CAPITAL PROJECTS

Further, Zimplats said the redevelopment of Bimha mine was progressing well, and that the installation of the south underground crusher and the ore-conveyancing system had been completed during the half-year under review.

The focus was now on completing the two underground workshops.

The development of Mupani mine, which serves as a replacement for the Ngwarati and Rukodzi mines, was ahead of schedule. The mine is expected to receive the first mining fleet from the Rukodzi mine in the second half of the financial year.