South Africa’s Aquarius Platinum Ltd on Tuesday said it may consider listing Mimosa Mining Company on the Zimbabwe Stock Exchange (ZSE) to comply with the country’s Indigenisation and Economic Empowerment Act, which warehouses 51% equity for locals.
The world’s fourth-largest platinum producer with a primary listing on the JSE and a secondary listing on London and Australian bourses owns 50% of the Zvishavane-based mine, the country’s second largest platinum producer.
In a financial and production update for the first quarter of 2011, Acquarius said Mimosa’s major shareholders were currently in talks to dispose part of their equity to local investors.
“A process has been agreed on by the shareholders of Mimosa to achieve this objective, which may include seeking a listing on the ZSE,” Acquarius said in the statement.
“Further details will be made available once relevant regulatory approvals have been granted.”
The initial public offering would increase the number of resources companies listed on the local bourse to five and take its total tally to 77.
Under indigenisation general regulations, foreign operations have up to five years to comply.
Mimosa is Acquarius’ second largest mine by volume and on-mine EBTDA.
In the trading update, Acquarius reported that Mimosa Mining Company produced its highest platinum group metals (PGM) output ever and drove group earnings for the first quarter of 2011 that had been battered by a 5% sag in global platinum prices.
The Johannesburg-based miner said the volume of PGM increased 28% to 123 392 ounces during the review period, Mimosa included.
“Everest is ramping up nicely, rand costs were largely contained, Mimosa achieved record production and the tailings operations both enjoyed much improved recoveries,” Aquarius Platinum CEO Stuart Murray said.
“As a result, production is on track to achieve our previous guidance for FY2011.”
The miner sees total PGM output surging 25% to 530 000 ounces during the 2011 financial year, driven by Mimosa, currently under expansion.
Mimosa targets ramping up PGM output to 200 000 ounces this year from around 160 000 per ounce, with platinum accounting for half the projected output.
The outlook for the commodity is seen relatively stable as the global automobile industry slowly comes back.
Platinum is used to manufacture pollution-control devices for cars and as jewellery in Asian markets.
For the first quarter of 2011 ended September 30, Aquarius Platinum said Mimosa produced a “record quarterly production” of 54 133 ounces of PGM from 49 709 in the last quarter, 27 067 ounces of which were attributable to its Johannesburg-based associate.
At this level, Mimosa ranked second after Aquarius’ Kroondal mine, which produced 110,575 ounces of PGM.
During the period, the operation contributed $76,2 million to Acquarius’ PGM sales of $149,5 million with base metals accounting for 24% of this.
Total group sales surged 75% from $85,9 million during the same quarter last year and 9% on a quarter-on-quarter basis.
Group net profit after tax for the quarter amounted to $42,4 million or 9,2 cents per share from $9,5 million or 2,1 cents per share as production increased 28% year-on-year and 12% quarter-on-quarter.
This surge in revenue shrugged the downward effect of PGM prices, which tumbled 5% from the previous quarter.
“As a result of the very high US dollar prices across all PGM metals in April and May, average prices in the fourth quarter of FY2010 were higher than those in the quarter under review, with the result that the average platinum price fell by 5% and that of rhodium fell 17%.
“Palladium was unchanged while gold rose by 3% on average. Dollar PGM prices remained relatively static during the first half of the current quarter as the effects of the May correction continued to be felt, before rising again in September.
“Platinum closed the quarter up 8% at $1,662 per ounce, and palladium rose by 28% to $573 per ounce over the same period.”