Platinum miner Zimplats has reported a 20% year-on-year decrease in revenue, dropping from $962.3-million at the end of the 2023 financial year to $767.1-million at the close of the 2024 financial year on June 30. The company attributed this decline to the softening of average dollar metal prices during the period.

The gross revenue per six-element (6E) platinum group metal (PGM) ounce sold, which includes the revaluation of pipeline debtors, also decreased by 20%, falling to $1 196 from $1 595 in the previous financial year.

Despite this, sales volumes increased by 6% to 641 000 oz of 6E PGMs, a rise attributed to higher production during the period, compared to 603 000 oz in the 2023 financial year.

However, the cost of sales rose by 5% to $684.7-million, up from $651.9-million in the previous year, primarily owing to higher production and sales volumes, as well as a higher depreciation charge, though several cost containment initiatives implemented during the period helped moderate the overall increase.

Operating unit cash costs decreased by 1% to $829/oz of 6E PGMs, down from $836/oz in the previous year, benefiting from these cost containment efforts.

The company’s gross profit margins were negatively impacted by the lower revenue, contracting to 11% from 32% in the previous year. Additionally, foreign exchange losses increased to $35.8-million, up from $17.2-million, driven by the depreciation of the Zimbabwean dollar against the dollar, which fell from Z$5 769 on June 30, 2023, to Z$33 904 on April 5. (Zimbabwe launched its new currency, the Zimbabwe Gold, or ZiG, on April 5.)

As a result of these challenges, Zimplats saw a significant decline in profit before tax, dropping to $37.6-million from $286.8-million in the previous year. The income tax expense rose to $29.4-million, largely owing to an increase in deferred tax expense of $17.2-million following a change in the corporate income tax rate from 24.72% to 25.75%. Consequently, profit after tax fell sharply to $8.2-million from $205.5-million in the 2023 financial year.

Free cash generation was also negatively impacted by weaker prevailing PGMs pricing and elevated capital expenditure during the period. The company raised $60-million in debt, resulting in a closing cash position of $78.1-million, down from $253.6-million at the end of the 2023 financial year.

In terms of dividends, the board of directors declared a final dividend of $100-million, equating to $0.929 a share, for the year ended June 30, 2023, which was paid on September 13, 2023. The ex-dividend and record dates for this dividend were September 1, 2023, and September 4, 2023, respectively.

In comparison, a final dividend of $120-million, equating to $1.11 a share, was declared for the year ended June 30, 2022, and was paid on September 8, 2022, with ex-dividend and record dates on August 19, 2022, and August 22, 2022, respectively.

Additionally, an interim dividend for the half-year ended December 31, 2022, amounting to $100-million ($0.929 a share), was declared in February 2023 and paid on March 8, 2023.

OPERATIONS
Zimplats' operations achieved a 5% increase in mined volumes, reaching 7.9-million tonnes in the 2024 financial year, up from 7.6-million tonnes in the previous year.

This growth was driven by increased production volumes from the replacement mines. However, the mined grade experienced a slight decline of 1%, falling to 3.32 g/t of 6E PGMs, down from 3.33 g/t in the previous financial year. This decline was attributed to an increase in lower-grade development tonnages from Mupani mine and dilution caused by traversing geological structures at other mines.

Despite the slight decrease in mined grade, notable production gains were achieved across the operation. Bimha mine recorded a 6% increase in volumes mined, while Mupani mine saw a significant 20% increase as these operations ramped up to design capacity.

Conversely, volumes at Mupfuti mine declined by 4%, impacted by the availability of trackless mining machinery. Production from Ngwarati mine was reduced by 20% as the mine's primary operations were depleted, leading to the cessation of operations in June 2024.

Meanwhile, pillar reclamation at Rukodzi mine contributed 5% of the total ore mined during the 2024 financial year, with ground conditions remaining stable.

The total ore milled for the year increased by 6% to 7.9-million tonnes, up from 7.5-million tonnes in the previous year. This increase was mainly owing to the additional tonnage from the third concentrator plant, which operated for a full year compared to nine months in the prior year, as well as higher milling rates. As a result, 6E PGMs production increased by 6%, reaching 646 000 oz, compared to 611 000 oz in the previous year.

On the capital projects front, Zimplats said it was advancing a series of stay-in-business, mine replacement, and expansion projects, leading to a 45% increase in capital project spending, which rose to $440-million from $304-million in the previous year.

The development of Mupani mine, which will provide replacement volumes for the depleted Rukodzi and Ngwarati mines, remains on schedule, with total cumulative expenditure reaching $325-million.

The Mupani mine is expected to achieve production of 2.2-million tonnes a year in the 2025 financial year, with full replacement of the depleted mines, and is scheduled to reach design capacity production of 3.6-million tonnes a year by the 2029 financial year.

The upgrade of Bimha mine was completed during the year under review, increasing its design capacity to 3.1-million tonnes a year, up from two-million tonnes a year. A total of $82-million was spent on this project, which will partially replace tonnage from Mupfuti mine, forecast to deplete in the 2028 financial year.

In addition, $387-million has been spent on the smelter expansion and sulphur dioxide abatement plant project, against a total budget of $544-million. The expanded smelter, which includes a new 38-MW furnace, will increase smelting capacity to more than one-million ounces of 6E PGMs in converter matte a year. The commissioning of the expanded smelter is scheduled for the first half of the 2025 financial year.

Zimplats has also invested $36-million in the implementation of a 35 MW solar power plant project against a budget of $37-million. The plant is set to be commissioned in the first quarter of the 2025 financial year.

Additionally, $28-million of the budgeted $190-million has been spent to date on refurbishing the mothballed base metal refinery at Selous.