Aquarius Platinum Group (Aquarius), a 50% shareholder of Mimosa Mine, sees its total output of platinum group metals surging 25% to 530 000 ounces in the 2011 financial year, buoyed by the Zvishavane–based platinum miner, which may bring phase six of its expansion programme to financial closure next year.
Phase six of Mimosa’s expansion plans is expected to progress beyond a feasibility study stage this year.
The second largest platinum producer in Zimbabwe targets ramping up the output of platinum group metals to 200 000 ounces this year with platinum accounting for half the output. At this level of output, Mimosa would significantly lift the country’s total output of platinum, officially seen at 250 779 ounces.
In its fourth quarter ended June 30, Mimosa’s revenue rose 2,9% to $72 million from $70 million in the previous quarter as the miner increased production, stepped up cost-cutting measures and relished on strengthening platinum prices.
“The group is currently working on a pre-feasibility study for a phase-six expansion project, which would entail a new decline and expansion of production of about 50% to 75% on current output levels,” Stuart Murray, Aquarius CEO, said in a statement accompanying the group’s financial results.
During the year under review, the South Africa-based mid-tier resources company and the world’s fourth-largest platinum producer spent
$18 million in capital expenditure on Mimosa.
The bulk of the capex was committed to the completion of Wedza phase-five expansion, which increased Mimosa’s annual production of platinum group metals to nearly 200 000 ounces from 160 000 ounces.
Murray said production at Mimosa in the last quarter had been impressive with output up 11% to 199 625 ounces of 4E PGMs, of which 99 812 ounces were attributable to Aquarius.
“The final quarter of the 2010 financial year has been positive overall, with production volumes better than those achieved in the previous quarter, and improved average PGM prices.
Kroondal and Mimosa performed well during the period,” he said in a statement accompanying the financial results.
He however noted that cash cost per unit have increased by 22% since the country adopted multiple currencies, raising input costs to the same level as equivalent services in South Africa.
This he said had been worsened by the increase in royalties to 4,5% on gross PGMs output, up from an initial 2,5%, while the corporate tax had been increased to 25%, from 15%.
“Cash costs per unit jumped 22% following the introduction of the multi-currency system in the country,” Murray said, adding the increased costs were eroding Mimosa’s competitive advantage.
“Input costs were now in line with that of equivalent services rendered in South Africa,” he said.
Mimosa mining operations hoisted 563 976 tonnes of ore in the last quarter compared to
486 804 tonnes the previous quarter.
Volumes milled and processed totalled 567 845 tonnes, with 3 869 tonnes being taken from the stockpile.