IMPALA PLATINUM HOLDINGS LIMITED - Third quarter production report for the period 1 January to 31 March 2019
26 April 2019 8:00
IMP 201904260003A
Third quarter production report for the period 1 January to 31 March 2019
IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1957/001979/06)
JSE Share code: IMP
ADR code: IMPUY
ISIN: ZAE000083648
("Implats" or "the Group")
Third quarter production report for the period 1 January to 31 March 2019
Implats' Chief Executive Officer, Nico Muller, commented: "The Group achieved a record safety
result during the quarter, which underpinned sustained operational delivery, despite a traditionally
weak production quarter for Implats. Metal prices for our primary products remain buoyant,
allowing us to sustain profitability in FY2019, year to date. Along with the rest of South Africa we
were faced with interruptions to our operations caused by Eskom power disruptions: while we
could manage this at Impala Rustenburg due to the flexibility offered by our integrated mining and
processing operations, our other South African operations elsewhere fared less well. In Zimbabwe,
the operational excellence at both Zimplats and Mimosa has endured, despite continued in-
country economic and social pressures, and we are encouraged by the ongoing initiatives led by
the government of Zimbabwe to restore economic growth."
Unaudited Unaudited Unaudited Unaudited
Operational information quarter quarter nine nine
ended ended months months
31 March 31 March 31 March 31 March
2019 2018 2019 2018
Safety
LTIFR pmmh 5.37 5.42 5.17 6.01
FIFR pmmh 0 0.038 0.013 0.065
Fatal injuries No 0 1 1 7
Gross production
Tonnes milled 000t 4 532 4 593 14 767 14 537
Grade (6E) g/t 3.81 3.87 3.84 3.88
Platinum in concentrate 000oz 350 346 1 125 1 214
Platinum in concentrate (mine-to-market) 000oz 307 309 985 987
Platinum in concentrate (third-party and toll) 000oz 43 37 140 227
Platinum refined 000oz 333 316 1 133 1 042
Impala: platinum refined 000oz 144 71 549 342
IRS: platinum refined 000oz 189 245 584 700
Palladium refined 000oz 219 196 683 602
Rhodium refined 000oz 50 43 156 142
Nickel refined 000t 4 095 3 724 12 169 11 631
Managed operations production:
Impala
Tonnes milled 000t 2 579 2 493 8 548 8 163
Grade (6E) g/t 3.95 4.11 3.97 4.06
Platinum in concentrate 000oz 160 151 518 499
Platinum refined(stock-adjusted) 000oz 159 149 520 496
Platinum refined 000oz 144 71 549 342
Zimplats
Tonnes milled 000t 1 604 1 659 4 916 4 992
Grade (6E) g/t 3.48 3.48 3.48 3.48
Platinum in concentrate 000oz 66 69 204 208
Platinum in matte 000oz 67 69 202 205
Marula
Tonnes milled 000t 349 441 1 303 1 382
Grade (6E) g/t 4.29 4.12 4.35 4.28
Platinum in concentrate 000oz 15 20 60 63
JV operations production:
Mimosa
Tonnes milled 000t 678 675 2 085 2 081
Grade (6E) g/t 3.83 3.82 3.83 3.84
Platinum in concentrate 000oz 29 30 91 93
Two Rivers
Tonnes milled 000t 834 878 2 501 2 592
Grade (6E) g/t 3.59 3.56 3.55 3.65
Platinum in concentrate 000oz 36 40 112 123
Impala Refining Services (IRS) production
Platinum refined 000oz 189 245 584 700
Platinum refined (mine-to-market) 000oz 143 179 454 468
Platinum refined (third-party and toll) 000oz 45 67 129 232
SAFETY
The safety of our employees remains a priority at Implats. The Group's safety strategy remains
firmly centred on inculcating an inherently safe production culture. This has seen a step-change
in safety performance, resulting in the Group recording its lowest fatal injury frequency rate (FIFR)
of 0.013 per million man hours worked in the financial year to 31 March 2019. No fatal injuries
were recorded during the quarter under review. Zimplats achieved the milestone of 10-million
fatality free shifts worked during the third quarter, while Impala Rustenburg worked five-million
shifts without a fatality. These were new safety records for both operations.
Regrettably, both Zimplats and Impala Rustenburg recorded fatal incidents post the end of the
quarter. Mr Richard Mapuranga passed away at Zimplats' Mupfuti Mine on 5 April 2019 and
Mr Martin Ludick was fatally injured at the Impala Rustenburg UG2 Plant on 18 April 2019. The
Implats board and management team extend their sincere condolences to the families, friends and
colleagues of Mr Mapuranga and Mr Ludick.
PRODUCTION
Group tonnes milled (excluding associates) during the quarter were slightly lower at 4.53 million
tonnes, compared to 4.59 million tonnes in the prior comparable quarter. A stronger mining
performance at Impala Rustenburg was offset by lower tonnage at Marula and Zimplats. Overall,
mill grades were steady at 3.81g/t (6E) during the quarter and mine-to-market platinum in
concentrate production was maintained at 307 000 ounces, compared to 309 000 ounces in the
prior corresponding period.
In the nine-month period ended 31 March 2019, tonnes milled excluding production from
associates was marginally higher at 14.77 million tonnes. The average mill grade was 1.0% lower
at 3.84g/t (6E) and platinum in concentrate production was maintained at 985 000 ounces,
compared to 987 000 ounces produced in the prior corresponding nine months.
Platinum in concentrate received by IRS from third-party and toll customers during the third quarter
increased by 16.2% from the prior comparable period to 43 000 ounces due to higher contractual
deliveries. However, in the nine months ended 31 March 2019 platinum in concentrate production
from third-party and toll customers declined by 38.3% to 140 000 ounces due to elevated deliveries
from a large, once-off toll refining customer in the prior comparable nine months.
Total platinum in concentrate production during the quarter was slightly higher at 350 000 ounces,
however refined platinum production increased by 5.4% to 333 000 ounces, compared to 316 000
ounces in the prior corresponding period. The Number 3 furnace at Impala Rustenburg was taken
off-line in January 2019 for a full scheduled rebuild. As a result, available smelter capacity was
constrained during the quarter, resulting in no further reduction in excess accumulated pipeline
stocks during the period.
In the nine months ended 31 March 2019, refined platinum production benefitted from higher
available smelter capacity at the Group, which was impacted by extensive maintenance work
performed in the prior comparable period. This facilitated higher refined volumes at Impala in the
nine-month period (549 000 ounces versus 342 000 ounces). Conversely, refined volumes at IRS
were lower due to the once-off toll contract in the previous comparable period (584 000 ounces
versus 700 000 ounces). Gross refined platinum production increased by 8.7% to 1.13 million
ounces, compared to 1.04 million ounces during the prior corresponding period.
The Number 3 furnace is expected to be recommissioned in the coming weeks and return to full
production during May 2019, following which the Zimplats furnace will be taken down for scheduled
maintenance in June 2019. At 31 March 2019, 138 000 ounces excess platinum in concentrate
remained in stock, which together with associated PGMs, equates to approximately R4.75 billion
in revenue at prevailing rand PGM pricing. The majority of this inventory is expected to be
processed and sold in FY2020 once the Zimplats furnace maintenance work is completed.
Impala Rustenburg
Despite the challenges presented by a slow post-Christmas start-up, Eskom load shedding and
unscheduled shaft maintenance at 16 Shaft, Impala Rustenburg delivered an improved
operational performance.
Tonnes milled during the quarter increased by 3.5% to 2.58 million tonnes, compared to
2.49 million tonnes in the prior comparable period. Higher volumes were delivered across the
operation, with the exception of 1 Shaft, where production declined in line with guided closure
plans. Changes in the operational mix as the restructuring plan is effected impacted the mill grade,
which declined by 3.9% to 3.95g/t (6E) from 4.11g/t (6E) in the corresponding period.
The lower grade was more than offset by improved concentrator recoveries and the treatment of
additional surface sources. Consequently, platinum in concentrate production increased by 6.0%
to 160 000 ounces, compared to 151 000 ounces in the previous corresponding period.
In the nine months ended 31 March 2019, tonnes milled increased by 4.7% to 8.55 million tonnes.
The mill grade decreased by 2.2% to 3.97g/t (6E), but the higher tonnage throughput and improved
recoveries resulted in a 3.8% increase in platinum in concentrate production to 518 000 ounces,
compared to 499 000 ounces in the prior corresponding period, (which also benefitted from a
c.12 000 ounce contribution from the now-closed 4 Shaft).
Refined platinum production during the quarter increased significantly to 144 000 ounces from
71 000 ounces in the prior corresponding period. This was due to the increased processing
capacity available to process Impala production, which was displaced by IRS ounces in the prior
comparable period as a result of IRS contractual delivery terms and constrained processing
capacity.
In the nine-months ended 31 March 2019, refined platinum production increased by 60.5% to
549 000 ounces from 342 000 ounces during the previous comparable period, benefitting from
higher available processing capacity. On a stock-adjusted basis, refined platinum production
increased by 4.8% to 520 000 ounces, compared to 496 000 ounces in the previous corresponding
reporting period.
The Group continues to make strides towards delivering a safer and more profitable Impala
Rustenburg operation, centred on assets accessing a higher-quality, long-life orebody with lower
operating costs and capital intensity. A multitude of stakeholder engagements were undertaken
during the reporting period principally focused on the planned closure/divestment from 1 Shaft,
which is nearing the end of available mine life. These are expected to be concluded over the next
four to six months.
Zimplats
Zimplats sustained its operational performance during the quarter under review. Tonnes milled
decreased by 3.3% to 1.60 million tonnes, compared to 1.66 million tonnes in the prior
corresponding period, largely due to a shortened operating period and the impact of contributions
from open-cast operations in the third quarter of FY2018. The mill grade was maintained at 3.48g/t
(6E). Consequently, platinum in concentrate production decreased by 4.4% to 66 000 ounces,
compared to 69 000 ounces in the prior corresponding period.
Mill throughput in the nine months ended 31 March 2019 decreased by 1.5% to 4.92 million tonnes,
compared to 4.99 million tonnes in the prior corresponding period. Platinum in concentrate
produced similarly declined by 1.9% to 204 000 ounces from 208 000 ounces in the first nine
months of FY2018.
Marula
Operational continuity at Marula was hampered by community disruptions, which resulted in a
seven-day work stoppage at the mine. This, together with power interruptions caused by Eskom
load shedding, resulted in tonnes milled during the quarter decreasing by 20.8% to 349 000 tonnes
from 441 000 tonnes in the third quarter of FY2018. Notwithstanding a 4.1% improvement in mill
grade during the quarter to 4.29g/t (6E), platinum in concentrate production decreased by 25.0%
to 15 000 ounces, compared to 20 000 ounces in the prior comparable period.
Mill throughput over the nine months ended 31 March 2019 decreased by 5.7% to 1.30 million
tonnes, compared to 1.38 million tonnes in the previous corresponding period. Consequently,
platinum in concentrate production deteriorated by 4.8% to 60 000 ounces, compared to
63 000 ounces in the prior nine month period.
Mimosa
Mimosa delivered another good performance during the quarter under review. Tonnes milled
improved marginally to 678 000 tonnes, while the mill grade was sustained at 3.83g/t (6E).
Platinum in concentrate production was impacted by lower concentrator availability, which
impacted metal recoveries and decreased platinum production to 29 000 ounces from 30 000
ounces in the prior corresponding period.
Mill throughput over the nine months ended 31 March 2019 was maintained at 2.09 million tonnes,
compared to 2.08 million tonnes in the prior comparable period. Platinum in concentrate
production, however, declined to 91 000 ounces from 93 000 ounces in the prior corresponding
period on the back of lower metal recoveries.
Two Rivers
Operational performance at Two Rivers was impacted by continued lower-grade split-reef mining
during the period under review, which was further exacerbated by Eskom load shedding and an
overland belt failure. Tonnes milled during the quarter decreased by 5.0% to 834 000 tonnes,
compared to 878 000 tonnes in the prior comparable period. Despite a slight improvement in mill
grade to 3.59g/t (6E) from 3.56g/t (6E), platinum in concentrate production declined by 10.0% to
36 000 ounces, compared to 40 000 ounces in the prior corresponding period.
Mill throughput in the nine months ended 31 March 2019 decreased by 3.5% to 2.50 million tonnes,
while the mill grade decreased by 2.7% to 3.55g/t (6E). Consequently, platinum in concentrate
production during the period decreased by 8.9% to 112 000 ounces, from 123 000 ounces in the
prior comparable period.
IRS
Refined platinum production of 189 000 ounces from both mine-to-market operations (Zimplats,
Marula, Two Rivers and Mimosa) and IRS third-party and toll customers was 22.8% lower than
the previous period (245 000 ounces) when constrained processing capacity and IRS contractual
delivery terms boosted IRS refined production at the expense of Impala metal.
Over the nine months ended 31 March 2019, refined platinum production decreased by 16.6% to
584 000 ounces, compared to 700 000 ounces in the prior corresponding period. This was largely
as a result of once-off toll treatment of third-party material in the previous period, with mine-to-
market refined volumes also reflecting lower receipts from Two Rivers and Marula.
Outlook and guidance
The third quarter historically remains a challenging period for Implats, largely as a result of the
Christmas holiday break. This situation was further aggravated this year by the unexpected Eskom
power supply issues, which impacted the South African operations, and the community disruptions
experienced at Marula. During the final quarter of the financial year, against the backdrop of South
African National Elections, the business will focus on concluding extensive maintenance on Impala
Rustenburg's Number 3 furnace, progressing the closure/divestment from Impala 1 Shaft, initiating
wage negotiations with AMCU and endeavouring to secure operations from further Eskom power
disruptions.
Notwithstanding all these challenges, market guidance for the 2019 financial year is maintained
as per the guidance provided in the FY2019 half-year results. However, both Marula mined
volumes and gross Group refined volumes are likely to be towards the lower end of the guided
range.
Unit FY2019 guidance
Concentrate platinum production
Impala oz 650 000 690 000
Zimplats oz 270 000 280 000
Two Rivers oz 160 000 170 000
Mimosa oz 115 000 125 000
Marula oz 80 000 90 000
IRS (Third Party and Toll) oz 170 000 180 000
Group refined platinum production oz 1 500 000 1 600 000
Group unit cost (stock adjusted) R/oz platinum 23 900 24 800
Group capital expenditure Rbn 4.1 4.3
The third quarter production report for the period 1 January to 31 March 2019 has not been
reviewed and reported on by the external auditors of Implats.
Queries:
Johan Theron
Group Executive: Corporate Affairs
E-mail: Johan.Theron@implats.co.za
Tel: +27 11 731 9013/43
Cell: +27 82 809 0166
Emma Townshend
Executive: Corporate Affairs
E-mail: Emma.Townshend@implats.co.za
Tel: +27 21 794 8345
Cell: +27 82 415 3770
Alice Lourens
Group Head : Investor Relations and Corporate Communication
E-mail: Alice.Lourens@implats.co.za
Tel: +27 11 731 9033/43
Cell: +27 82 498 3608
26 April 2019
Johannesburg
Sponsor to Implats
Nedbank Corporate and Investment Banking
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