AQUARIUS Platinum mine local unit Mimosa says little progress has been made in ongoing negotiations with the government to conclude the drafting of the indigenisation agreement, it has been learnt.
Report by Victoria Mtomba
In its third quarter trading update yesterday, the platinum mine company owned 50/50 by Mimosa Investments and Impala Platinum Holdings Limited said in December 2012 a term sheet was concluded in respect of a proposed indigenisation implementation plan with the government.
“During the quarter under review a number of discussions took place between Mimosa, the government of Zimbabwe and shareholders of Mimosa, but progress in drafting the indigenisation agreements was limited. Nevertheless, Mimosa remains engaged in discussions with the government of Zimbabwe and shareholders will continue to be advised of any progress made,” the company reported.
The company in December came up with a sale consideration for 51% of Mimosa Holdings to indigenous parties at $550 million attributable to Aquarias based on an agreed fair market value for Mimosa Holdings of $1 078 billion.
Under the transaction Mimosa will provide a vendor loan funding mechanism to facilitate the transaction for 10 years and bear interest of 9% annually and will be settled through waiver of the right to receive 90% of dividends due to indigenous parties.
During the period under review production and volumes at Mimosa decreased by 2% respectively to 590 620 tonnes and 563 054 tonnes.
Revenue for the group increased by 2% to $69 million, due to higher PGM basket prices realised in the quarter. The mining company cash margin for the period increased to 34% from 24% due to lower operating costs and the higher basket price.
During the third quarter ending March 2013, Mimosa cash costs decreased by 3% to $870 per PGM ounce quarter-on-quarter.
“Mimosa in turn managed to maintain production at above budget levels while unit costs declined by 3%, even after the annual wage increase of 7,5%. While our operational performance improved, the operating environment remained particularly challenging across most disciplines and was exacerbated by the significant drop in dollar metal prices post the period end,” the company said.