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Oliver Kazunga, Senior Business Reporter
PLATINUM producer Aquarius says its Zimbabwe division, Mimosa Mining Company spent $18 million in capital expenditure in the half year ended December 31, 2015.

The group said its Zimbabwean operation invested in capital expenditure to sustain its operations despite concerns over declining commodity prices on the international market.

“Stay in business capital expenditure at Mimosa was $18 million ($150 per PGM ounce), spent mainly on mobile equipment, support and drill rigs and LHDs (Load-Haul Dumps), the conveyor belt extension, down dip development and ventilation walls,” said the group in a statement.

“Operating costs decreased by two percent mainly as a result of increased production as well as the benefits emanating from cost reduction initiatives being implemented by the company.”

It said during the period under review, Mimosa continued to perform strongly producing 60,214 platinum group metals (PGM) ounces.

During the period under review, Mimosa’s revenue decreased by 32 percent to $99 million due to lower metal prices.

“Mining cash costs increased nine percent to $76 per tonne, and PGM ounce cost decreased by two percent to $784.”

The mine recorded an EBITDA profit attributable to Aquarius of $4 million and a net loss before tax of $51 million.

“Despite consistent production, the 83 percent decrease from $27 million to $4 million in EBITDA compared to the prior period was driven by lower PGM prices (down 26 percent), higher production (up two percent), and lower unit costs (down two percent).”

Meanwhile, the group’s South Africa’s operation Kroondal platinum mine was the other top performer during the period under review.

Together with Mimosa, the two operations had a combined output amounting to 352, 107 PGM oz.
Commenting on the results, Aquarius Platinum chief executive officer Jean Nel, said:

“Both Kroondal and Mimosa produced ahead of guidance and at reduced costs during the half year. Combined production from Kroondal and Mimosa, of 352,107 4E oz for the half year is a company record.”

He said Kroondal and Mimosa’s PGM unit costs were lower than three years ago in nominal terms (and substantially lower in real terms), a really credible performance by the operating teams led by Rob Schroder and Winston Chitando.

“That said, the lower PGM prices experienced during the half year significantly impaired both Kroondal and Mimosa’s profitability. In order to ensure sustainability in this macro environment further cost saving initiatives were implemented at Kroondal, and specifically Mimosa, which management expects to result in unit costs reducing further going forward,” he said.