Mimosa seeks $82m for expansion


HARARE - South Africa’s platinum producer, Aquarius Platinum Limited, says it is seeking $82 million for a planned expansion programme at its Zimbabwean subsidiary Mimosa Platinum Mines (Mimosa).
This comes after a feasibility study was conducted early this year to determine the Zvishavane-based mine’s life.

“Based on results of the pre-feasibility study, the estimated capital requirement is $82 million over five years. This would include additional mill capacity and an upgrade to the crusher, additional fully equipped production teams and a ventilation upgrade,” Aquarius said.

The platinum miner noted that given the relatively low capital expenditure required for this expansion and the fixed cost dilution — unit costs were expected to decline by 6-8 percent from current levels, this expansion project was significantly value accretive.

“It is estimated that this project can be executed within 24 months of its start. However, guarantees of fiscal and regulatory stability would be important before the Aquarius Board made any decision to commit the capital required,” said the Johannesburg Stock Exchange-listed company.

Aquarius added that expansion into the Mtshingwe block was also expected to sustain Mimosa as a long-life mining asset for at least 20 years.

“Access to the block is being developed via the Wedza shaft and a total of 305m of on-reef development was achieved during the year under review, as planned and on budget,” the company said.

Meanwhile, Mimosa’s production for the 2016 first quarter to September 2015 decreased by two percent to 654 127 tonnes due to low production in the period under review following a fatal accident.

The slow-down in production also saw Mimosa’s revenue declining by 15 percent to $53 million from $62 million in the previous quarter, while gross cash profit margin for the period decreased from 23 percent to four percent.

The miner noted that hoisted tonnage for the quarter was at 654 127 tonnes compared to 684 030 tonnes achieved in the previous quarter representing a 7,3 percent decrease in performance.

“Hoisting performance is expected to improve in line with the anticipated improvement in the amount of blasted ore,” Mimosa said.

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