South African platinum miner Impala Platinum Holdings said on Thursday that its subsidiary Zimplats has reached agreement with Zimbabwe government that creates the platform for further large scale investments in the company.
Zimplats signed an agreement with the Zimbabwe government relating to the release of a portion of its mining claims in exchange for a combination of empowerment credits and cash, it said.
In addition, the agreement ensures that the ground required for long term expansion is secured under the special mining lease regime.
In terms of the agreement, Zimplats will release claims together amounting to 36% of the company’s resource base on the Great Dyke in Zimbabwe. The contained metal in the ground to be released is 51-million ounces of platinum or 99-million ounces of platinum, palladium, rhodium and gold.
The released ground is outside of Zimplats’ long term expansion programme of one-million platinum ounces per annum over the 50-year life of the mine.
The agreement allows for the market value of the claims to be recognised. The credit is calculated with reference to the weighted average share price of Zimplats over the 30 days prior to signing of the agreement, multiplied by the number of shares in issue.
The market value of the released claims is $153-million and the weighted average price of Zimplats shares during the 30 day period was $4,86. Using these values and the agreed formula, Zimplats will therefore receive a cash credit and an empowerment credit to realise the full value of the released claims.
The agreement also provides for all remaining claims retained for the long term expansion to be incorporated into the special mining lease regime that applies to Zimplats’ current operations.
This will facilitate the potential to fast-track any expansion in these areas.
Following the signing of the agreement, both the Implats and Zimplats board of directors said that the first phase of their expansion plan would go ahead.
The first phase of expansion will involve new investment of $258-million, including
$69,5-million for the replacement of the opencast mine and an increase in platinum production from the current 90 000 ounces per annum to 160 000 ounces per annum.
The expansion also includes the simultaneous development of two new underground mines at Ngezi and the construction of a new 1,5-million tonnes per
annum concentrator at Ngezi. A total of 715 new staff houses will be constructed near Ngezi and amenties within the area will be upgraded.
About 1 200 new direct jobs will be created, plus an estimated further 3 000 contractor jobs during the three year construction phase, Implats said. – I-Net Bridge