IMP
IMPO
IMP - Impala Platinum Holdings Limited - Consolidated annual results for the
year ended 30 June 2007 (audited)
IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration No. 1957/001979/06
Share code: IMP/IMPO ISIN: ZAE000083648
LSE: IPLA ADR`s: IMPUY
("Implats" or "the company")
Consolidated Annual Results for the year ended 30 June 2007 (Audited)
* Unsatisfactory safety performance
* Record group platinum production of more than 2Moz
* Lower Merensky volumes affect unit cost at Impala
* Gross margin improves to 46%
* Headline earnings up by 75% to R13.12 per share
* Normalised headline earnings* more than double to R16.36 per share
* Capital expenditure of R2.89 billion
* Total dividend per share of R9.75 (Final R7 per share)
* Excluding BEE charge
Balance Sheet
As at As at
(All amounts in rand millions 30 June 30 June
unless otherwise stated) 2007 2006 (1)
ASSETS
Non-current assets
Property, plant, equipment, exploration and 20,346.3 12,435.4
evaluation assets
Intangible assets 1,020.2 -
Investments in equity accounted entities 1,416.5 1,167.9
Available-for-sale financial investments 1,557.9 761.1
Held-to-maturity investments 120.9 108.2
Other receivables and prepayments 12,738.8 611.3
37,200.6 15,083.9
Current assets
Inventories 3,997.4 2,936.0
Trade and other receivables 5,535.9 3,585.6
Cash and cash equivalents 3,221.9 1,864.4
12,755.2 8,386.0
Non-current assets classified as held-for- 2.4 -
sale
12,757.6 8,386.0
Total assets 49,958.2 23,469.9
EQUITY
Capital and reserves attributable to the
equity holders of the company
Share capital 14,809.1 457.9
Other reserves 676.2 18.7
Retained earnings 17,483.8 13,363.3
32,969.1 13,839.9
Minority interest 1,730.1 214.9
Total equity 34,699.2 14,054.8
LIABILITIES
Non-current liabilities
Borrowings 685.6 174.0
Deferred income taxation 5,047.0 2,919.0
Provision for employee benefit obligations 560.6 187.5
Provision for future rehabilitation 330.1 335.4
Derivative financial instruments - 38.2
6,623.3 3,654.1
Current liabilities
Trade and other payables 7,087.5 4,741.1
Current income taxation 1,373.4 926.9
Borrowings 32.1 27.8
Provision for employee benefit obligations 93.5 -
Derivative financial instruments 49.2 65.2
8,635.7 5,761.0
Total liabilities 15,259.0 9,415.1
Total equity and liabilities 49,958.2 23,469.9
Income Statement
Year ended Year ended
(All amounts in rand millions 30 June 30 June
unless otherwise stated) 2007 2006 (1)
Sales 31,481.5 17,500.2
On-mine operations (5,900.7) (4,708.6)
Concentrating and smelting operations (1,315.8) (1,129.6)
Refining operations (594.1) (523.4)
Amortisation of operating assets (864.7) (643.1)
Metals purchased (9,369.1) (4,326.2)
Increase in metal inventories 1,034.9 1,161.0
Cost of sales (17,009.5) (10,169.9)
Gross profit 14,472.0 7,330.3
Net foreign exchange transaction (15.5) 177.8
(losses)/gains
Other operating expenses (478.0) (340.0)
Other expenses (214.1) (147.6)
Share of profit of associates 388.5 114.8
Royalty expense (1,703.4) (851.8)
BEE compensation charge (1,790.0) (95.3)
Reversal of impairment of assets - 583.1
Interest and other income - net 642.4 303.8
Finance costs (81.9) (79.0)
Profit before taxation 11,220.0 6,996.1
Income taxation expense (3,894.7) (2,614.5)
Profit for the year 7,325.3 4,381.6
Profit attributable to:
Equity holders of the company 7,232.2 4,341.9
Minority interest 93.1 39.7
7,325.3 4,381.6
Earnings per share (expressed in cents
per share - cps)
- basic 1,312 825
- diluted 1,272 823
Dividends to group shareholders (cps)
- final dividend - June 2007/6 700 275
- interim dividend - December 2006/2005 275 125
- special dividend - December 2005 - 688
975 1,088
Summary of Business Segments
(All amounts in Rand millions, unless otherwise stated)
Mining segment
Impala Marula Afplats Zimplats Mimosa
for the year ended
30 June 2007
Total sales 29,813.9 1,212.7 1,697.3 843.0
Cost of sales 19,015.9 650.7 768.7 261.5
Gross profit 10,798.0 562.0 928.6 581.5
Profit for the year 4,193.8 397.5 (9.3) 716.3 518.6
for the year ended
30 June 2006 (1)
Total sales 16,864.9 511.1 1,037.9 436.0
Cost of sales 10,912.9 416.2 604.3 207.0
Gross profit 5,952.0 94.9 433.6 229.0
Profit for the year 3,346.5 402.6 305.4 174.8
Total Refining Investment Inter
Mining Services and Other segment
segment segment segment adjustment Total
for the year
ended 30 June
2007
Total sales 33,566.9 13,649.3 (15,734.7) 31,481.5
Cost of sales 20,696.8 11,862.1 (15,549.4) 17,009.5
Gross profit 12,870.1 1,787.2 (185.3) 14,472.0
Profit for the 5,816.9 1,312.9 341.4 (145.9) 7,325.3
year
for the year
ended 30 June
2006 (1)
Total sales 18,849.9 6,221.6 (7,571.3) 17,500.2
Cost of sales 12,140.4 5,336.5 (7,307.0) 10,169.9
Gross profit 6,709.5 885.1 (264.3) 7,330.3
Profit for the 4,229.3 715.0 (355.0) (207.7) 4,381.6
year
Headline earnings
Year ended Year ended
(All amounts in rand millions 30 June 30 June
unless otherwise stated) 2007 2006 (1)
Profit attributable to equity holders of 7,232.2 4,341.9
the company
Adjustments net of taxation:
Impairment write-back of assets - (421.6)
Investment written off - 127.1
Profit on disposal of assets (0.4) (100.9)
Headline earnings 7,231.8 3,946.5
BEE compensation charge 1,790.0 95.3
Normalised headline earnings 9,021.8 4,041.8
Headline earnings per share (cents) 1,312 750
Normalised headline earnings per share 1,636 768
(cents)
Weighted averge number of ordinary shares 551.400 526.148
in issue (millions)
Cash Flow Statement
Year ended Year ended
(All amounts in rand millions 30 June 30 June
unless otherwise stated) 2007 2006 (1)
Cash flows from operating activities
Cash generated from operations 12,945.0 6,533.4
Interest paid (42.0) (60.8)
Income taxation paid (2,931.4) (1,553.8)
Net cash from operating activities 9,971.6 4,918.8
Cash flows from investing activities
Acquisition of subsidiary, net of cash (3,884.2) -
acquired
Increase in shareholding in subsidiary - (1.5)
Long term royalty prepayment to the
Royal Bafokeng Nation (12,482.6) -
Purchase of property, plant and equipment (2,810.2) (2,176.7)
Proceeds from sale of property, plant and 4.2 101.7
equipment
Increase in investments in associates (119.0) (151.7)
Payment received from associate on 258.9 -
shareholders loan
Loan repayments received 36.3 36.5
Interest received 547.6 356.3
Dividends received 22.6 10.9
Net cash used in investing activities (18,426.4) (1,824.5)
Cash flows from financing activities
Issue of ordinary shares, net of cost 12,544.1 213.9
Lease liability repaid (22.0) (16.1)
Proceeds from short-term borrowings - 6.9
Repayments of short-term borrowings (11.3) -
Proceeds from long-term borrowings 435.9 10.2
Repayments of long-term borrowings (11.3) -
Dividends paid to company`s shareholders (3,111.7) (5,467.9)
Net cash from/(used in) financing 9,823.7 (5,253.0)
activities
Net increase/(decrease) in cash and cash 1,368.9 (2,158.7)
equivalents
Cash and cash equivalents at beginning of 1,864.4 3,984.3
year
Effects of exchange rate changes on (15.0) 38.8
monetary assets
Cash and cash equivalents at end of year 3,218.3 1,864.4
(1) Restated with the adoption of IFRIC 4
NOTES
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS), Interpretations of those
standards (as adopted by the International Accounting Standards Board) and
applicable legislation (requirements of the South African Companies Act and the
regulations of the JSE Limited.)
The consolidated financial statements have been prepared under the historical
cost convention except for the following:
Revaluation of available-for-sale financial investments at fair value, certain
financial assets and financial liabilities are measured at fair value,
derivative financial instruments are measured at fair value and liabilities for
cash-settled share-based payment arrangements are measured at fair value.
The principal accounting policies used by the group are consistent with those of
the previous year, unless otherwise stated.
Changes in accounting policies
The following new interpretations of International Financial Reporting Standards
have been issued and have been adopted:
- IFRIC 4: Determining whether an Arrangement contains a Lease (effective 1
January 2006). The adoption of IFRIC 4 requires the group to identify any
arrangement that does not take the legal form of a lease, but conveys a right to
use an asset in return for a payment or series of payments. The effect of the
implementation of this interpretation is set out below.
The group has identified arrangements that contain leases and reported these
arrangements in terms of IAS 17. The retrospective adoption of this
interpretation resulted in the recognition of assets and corresponding finance
lease liabilities, with a corresponding reduction in retained earnings of R15.6
million (2006: R10.2 million.) Profit for the year reduced by R5.4 million
(2006: R3.5 million).
- IFRIC 10: Interim Financial Reporting and Impairment (effective 1 November
2006) prohibits the reversal of an impairment loss recognised in a previous
interim period in respect of goodwill, an investment in an equity instrument or
a financial asset carried at cost. The implementation of this interpretation had
no impact on the results of the group.
- IFRIC 11: IFRS 2 - Group and Treasury Share Transactions (effective 1 March
2007). The interpretation addresses how to apply IFRS 2 - Share-based Payment,
to share-based payment arrangements involving an entity`s own equity instruments
or equity instruments of another entity in the same group. The implementation of
this interpretation had no material impact on the results of the group.
- IFRIC 14: IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding
Requirements of their Interaction. The interpretation addresses refunds or
reductions in future contributions, the impact of minimum funding on future
contributions and potential liabilities. The implementation of this
interpretation had no impact on the results of the group.
The following standard has been adopted by the group:
- IAS 19 Employee Benefits (revised, effective 1 January 2006). This standard
deals with the accounting for employee benefits. The adoption of this accounting
statement had no material impact on the results of the group.
AUDIT OPINION
The financial statements have been audited by PricewaterhouseCoopers Inc. whose
unqualified opinion is available for inspection at the registered office of
Implats.
AFPLATS
On 14 May 2007 the group acquired the entire issued and to be issued share
capital of African Platinum PLC, an exploration and development business
focussed on platinum group metals. The acquired business did not contribute to
group revenue or profit for the year under review due to its nature as a
developing mine
and exploration activities. The net cash outflow on acquisition amounted to
R3,884.2 million. The goodwill of R1,020.2 million is based on the provisional
purchase price allocation of fair value. The purchase price allocation will be
finalised in FY2008, subject to an independent review of resources.
SHARE ISSUE
Implats issued 75.1 million shares to the Royal Bafokeng Nation ("RBN") whereby
the RBN acquired an effective shareholding of 13.4% in Implats. The difference
between the fair value of the shares acquired and the fair value of the prepaid
royalty was R1,790.0 million.
EMPLOYEE SHARE OWNERSHIP PROGRAMME
During the period under review 16.4 million shares were issued in terms of an
approved Employee Share Ownership Programme.
BORROWINGS
Borrowings from Standard Bank Limited, amounting to R395.0 million, were
obtained during the financial year, which carries interest at the Johannesburg
Interbank Acceptance Rate (JIBAR) plus 90 basis points and a revolving credit
facility amounting to R72.9 million, which carries interest at JIBAR plus 100
basis points. The loans are repayable over 8.5 years.
CONTINGENT LIABILITIES AND GUARANTEES 2007 2006
Most signaficant guarantees
Related party:
Two Rivers Platinum (Proprietary) Limited 292.9 210.6
Department of Minerals and Energy 324.9 296.9
CONTINGENCIES
BTX Mining, a contract miner for Barplats Limited, has lodged a claim for an
amount of R49.0 million against Impala Platinum Limited following the closure of
the Barplats Mine. The company maintains its position that the claim lacks merit
and therefore no amount is due to BTX Mining.
CAPTIAL EXPENDITURE
Capital expenditure approved at 30 June 2007 amounted to R14.0 billion (2006:
R11.9 billion) of which R3.2 billion (2006: R2.3 billion) is already committed.
This expenditure will be funded internally and if necessary, from borrowings.
STATEMENT OF CHANGES IN SHAREHOLDERS` EQUITY
(All amounts in rand millions unless otherwise stated)
Attributable to equity holders
of the Company
Share Other Retained
capital reserves earnings Total
Balance at 30 June 2005 (1) 120.4 (506.1) 14,489.3 14,103.6
Net income recognised
directly
in equity 525.1 525.1
Profit for the year (1) 4,341.9 4,341.9
Employee share option
scheme:
- Proceeds from shares 213.9 213.9
issued
- Fair value of employee 28.3 28.3
service
Final dividend relating to (1,181.9) (1,181.9)
2005
Interim dividend relating (661.9) (661.9)
to 2006
Special dividend (3,624.1) (3,624.1)
Share in revaluation 0.2 0.2
reserve of associate
BEE compensation charge 95.3 95.3
from sale of shares in
Marula Platinum (Pty)
Limited
Purchase of additional (0.5) (0.5)
share in Zimplats Holdings
Limited
Balance at 30 June 2006 (1) 457.9 18.7 13,363.3 13,839.9
Net income recognised
directly
in equity 657.5 657.5
Profit for the year 7,232.2 7,232.2
Employee share option
scheme:
- Proceeds from shares 79.1 79.1
issued
- Fair value of employee 17.1 17.1
service
Issue of shares to the 12,465.0 12,465.0
Royal Bafokeng Nation
Final dividend relating to (1,451.7) (1,451.7)
2006
Interim dividend relating (1,660.0) (1,660.0)
to 2007
BEE compensation charge 1,790.0 1,790.0
from shares issued to the
Royal Bafokeng Nation
Acquisition of a subsidiary
Balance at 30 June 2007 14,809.1 676.2 17,483.8 32,969.1
Minority Total
interest equity
Balance at 30 June 2005 (1) 159.9 14,263.5
Net income recognised directly
in equity 16.3 541.4
Profit for the year (1) 39.7 4,381.6
Employee share option scheme:
- Proceeds from shares issued 213.9
- Fair value of employee service 28.3
Final dividend relating to 2005 (1,181.9)
Interim dividend relating to 2006 (661.9)
Special dividend (3,624.1)
Share in revaluation reserve of 0.2
associate
BEE compensation charge from sale of 95.3
shares in Marula Platinum (Pty)
Limited
Purchase of additional share in (1.0) (1.5)
Zimplats Holdings Limited
Balance at 30 June 2006 (1) 214.9 14,054.8
Net income recognised directly
in equity (5.3) 652.2
Profit for the year 93.1 7,325.3
Employee share option scheme:
- Proceeds from shares issued 79.1
- Fair value of employee service 17.1
Issue of shares to the Royal 12,465.0
Bafokeng Nation
Final dividend relating to 2006 (1,451.7)
Interim dividend relating to 2007 (1,660.0)
BEE compensation charge from shares 1,790.0
issued to the Royal Bafokeng Nation
Acquisition of a subsidiary 1,427.4 1,427.4
Balance at 30 June 2007 1,730.1 34,699.2
(1) Restated with the adoption of IFRIC 4
OPERATING STATISTICS
Variance
for the year ended 30 June 2007 2006 %
Gross refined production
Platinum (`000 oz) 2,026 1,846 9.8
Palladium (`000 oz) 1,114 989 12.6
Rhodium (`000 oz) 247 242 2.1
Nickel (`000 t) 16.2 15.6 3.8
Impala refined production
Platinum (`000 oz) 1,055 1,125 (6.2)
Palladium (`000 oz) 472 492 (4.1)
Rhodium (`000 oz) 103 129 (20.2)
Nickel (`000 t) 7.0 7.9 (11.4)
IRS refined production
Platinum (`000 oz) 971 721 34.7
Palladium (`000 oz) 642 497 29.2
Rhodium (`000 oz) 144 113 27.4
Nickel (`000 t) 9.2 7.7 19.5
IRS returned metal (Toll
refined)
Platinum (`000 oz) 262 246 6.5
Palladium (`000 oz) 191 190 0.5
Rhodium (`000 oz) 47 42 11.9
Nickel (`000 t) 0.9 2.2 (59.1)
Group consolidated
statistics
Exchange rate: (R/$)
Closing rate on 30 June 7.06 7.16 (1.4)
Average rate achieved 7.20 6.37 13.0
Free market price per
platinum
ounce sold ($/oz) 2,445 1,791 36.5
Revenue per platinum ounce ($/oz) 2,369 1,721 37.7
sold
(R/oz) 17,057 10,963 55.6
Prices achieved
Platinum ($/oz) 1,185 988 19.9
Palladium ($/oz) 334 258 29.5
Rhodium ($/oz) 5,152 3,015 70.9
Nickel ($/t) 34,486 15,343 124.8
Sales volumes
Platinum (`000 oz) 1,827 1,582 15.5
Palladium (`000 oz) 870 896 (2.9)
Rhodium (`000 oz) 206 193 6.7
Nickel (`000 t) 16.3 14.8 10.1
Financial ratios
Gross margin achieved (%) 46.0 41.9 9.8
Return on equity (%) 52.3 28.0 86.8
Return on assets (%) 19.4 26.2 (26.0)
Debt to equity (%) 2.1 1.4 (50.0)
Current ratio 1.5:1 1.5:1 -
Operating indicators
Tonnes milled ex-mine (`000 t) 20,732 20,197 2.6
PGM refined production (`000 oz) 3,858 3,490 10.5
Capital expenditure (Rm) 2,887 2,248 28.4
($m) 401 352 13.9
Group unit cost per (R/oz) 6,370 5,009 (27.2)
platinum ounce
($/oz) 886 784 (13.0)
EXTRACTS FROM THE ANNUAL REPORT
SAFETY
Safety at Impala Platinum Holdings Limited (Implats) in FY2007 has been
disappointing with the fatality frequency rate having deteriorated. The number
of fatal incidents rose for the first time in five years with 13 fatal incidents
during the year compared to seven in the previous reporting period. Nine of
these fatalities occurred at the Impala Platinum mining operations, one at
Marula and three at Mimosa in Zimbabwe. The board and management of the company
extend their sincere condolences to the families and friends of these employees.
The lost-time injury frequency rate rose marginally from 3.41 in FY2006 to 3.48
per million manhours.
The reversal of the major gains in safety that have been made in recent years
are taken extremely seriously and the group has taken steps to re-vitalise the
fall of ground prevention campaign and increase focus on visible felt leadership
- falls of ground accounted for 62% of all fatal incidents in FY2007. A great
deal of emphasis is also being placed on training, particularly of new
employees, and on behaviour-based initiatives. Implats remains committed to a
policy of "zero harm" in the longer term and is pursuing this challenge with
vigour.
PERFORMANCE
The strength of the market for platinum group metals (PGMs) continued unabated,
particularly for platinum and rhodium. The platinum markets continue to be
driven by automotive growth, particularly in the diesel sector at the expense of
the more price elastic jewellery market that again succumbed to higher prices.
Industrial demand also experienced strong growth during the period fuelled by
increased demand in both the information technology and liquid crystal display
glass sectors. The palladium market once again showed a substantial supply
surplus but nonetheless experienced price robustness primarily due to the
general strength of investor interest in precious metals. The price of rhodium
rose sharply as the increasing need for the automotive sector to reduce NOx
emissions in gasoline vehicles resulted in demand exceeding supply.
Higher dollar metal prices, together with generally favourable exchange rates
and higher metal production have materially benefited the group. Dollar revenues
per platinum ounce sold rose by 38%, while rand revenues were 56% higher
compared to the previous financial year.
Key operating and financial performance indicators pertaining to the business
for the period under review are:
* Record gross platinum production of 2.026 million ounces was attained despite
unsatisfactory output of 1.055 million ounces at Impala Rustenburg.
* Sales revenue was up by 80% on FY2006, reaching a record R31.5 billion ($4.4
billion).
* The average rand:dollar exchange rate was R7.20/$ for the year, with the
closing rand:dollar exchange rate at R7.06/$.
* Cost of sales rose by 67%, R5.0 billion of the R6.8 billion was due to the
higher cost of metals purchased on the back of higher rand metal prices.
* Group unit cost per platinum ounce refined was up by 21% (excluding share
based payments) over the period, as a result of increased employee benefits
granted during the period, and aggravated by declining grade and production
output at Impala Rustenburg.
* Profit increased year-on-year to R7.2 billion ($1.0 billion).
* Headline earnings per share rose by 75% to 1,312 cents per share (182 US cents
per share). Excluding the BEE compensation charge, normalised headline earnings
per share increased by 113%.
* Gross margins for the Group improved to 46% from 42% in the previous year,
while Impala improved to 62%.
OPERATIONS
Operationally the group delivered a mixed performance. Under-delivery at Impala
Rustenburg was offset by strong growth at the other operations and at Impala
Refining Services.
Impala Platinum
Impala Platinum reported production of 1.055 million platinum ounces, a decrease
of 6.2% on the record production levels of the previous year. Although tonnes
mined declined marginally by 1.2%, less of the relatively high grade Merensky
ore was mined and increased tonnages from mechanised Merensky, underground UG2
and opencast UG2 ore resulted in lower platinum output.
High staff turnover at certain levels of middle management, including
supervisory and skilled categories also contributed to poor operational
performance. To counter this, salaries have been realigned and a new incentive
scheme was introduced as from May 2007.
The issues of lower grade and volumes aggravated unit cost increases, as did the
poor performance at 4, 11, 12 and 14 shafts. Excluding share-based payments, the
cash operating cost per refined platinum ounce rose by 22.3%. Steep increases in
the prices of steel, coal, fuel, copper and reagents far in excess of rates of
inflation (CPIX) contributed to the increase in costs. Operational efficiency
and cost management remain priorities.
Good progress is being made with the 16 and 20 shaft projects. Both shafts are
on track to begin production as originally scheduled: 16 shaft in FY2012 and 20
shaft in FY2009 with full production scheduled for FY2016 and FY2013
respectively. Implats` total capital investment in these two shafts will amount
to R7 billion.
The refineries continued to deliver an excellent performance, not only for
Impala, but also for Impala Refining Services (IRS), which markets and sells the
capacity not used by Impala. The board has approved the expansion of both
smelter and refining capacity to 2.8 million ounces of platinum per annum by
FY2010 at a cost of R1 billion and R1.4 billion respectively.
Marula
Production of platinum-in-concentrate at 65,200 ounces exceeded expectations and
was 63% up on FY2006 while tonnes milled increased by 49%. The conversion to
conventional mining and the plan to achieve full steady state production of
130,000 ounces of platinum per annum by FY2010 remain on schedule.
A pre-feasibility study has been completed on the Merensky Reef and was
presented to the board in May 2007. The Merensky Reef project will incorporate
the development of a new decline, concentrator and supporting mining
infrastructure and will yield 115,000 oz of platinum annually. Initial forecasts
indicate capital expenditure in the region of R3 billion.
Afplats
The development of the Leeuwkop project in which Implats holds 74%, is scheduled
to begin in FY2008. This depends on the necessary mining permit being received
from the DME. Total capital expenditure is expected to be approximately R3.0
billion which is over and above the acquisition cost of R4.2 billion. Full
production of 160,000 oz of platinum is scheduled for FY2013 with a life of mine
of 22 years.
Two Rivers
The Two Rivers Platinum mine will reach full production of 120,000 oz of
platinum in concentrate in FY2008. The mine is still in build up phase and
produced approximately 88,000 oz in FY2007. The implementation of trackless,
mechanised bord-and-pillar mining has progressed well. Wet commissioning of the
plant started ahead of schedule in July 2006. Problems with initial
commissioning were resolved and plant design capacity of 225,000t per month was
achieved during FY2007. Average recoveries of 79% were achieved during the year
and this is expected to improve in FY2008. The final cost of the project is
R1.38 billion, R187 million less than originally budgeted.
Zimplats
Zimplats had another record year with production of 96,500 oz of platinum in
matte. Tonnes milled rose by 6% and recoveries were maintained at 84.4% while
costs were below budget. The conversion from opencast to underground mining
continues and the original underground trial mine (Portal 2) is now fully
operational. Closure of the opencast operation is scheduled for 2008.
The phase 1 expansion, involving the development of portals 1 and 4 together
with the simultaneous construction of a new concentrator, 700 houses and
associated infrastructure is well underway. Combined full production of 160,000
oz of platinum is expected by 2010.
Capital expenditure for FY2007 totaled US$62 million of which $40 million was
spent on the Phase 1 expansion, $264 million has been budgeted for FY2008.
Mimosa
Mimosa produced 78,200 oz of platinum in concentrate for FY2007, an 8.3%
increase on the previous year. Underground production ramped up in line with the
Wedza Phase V expansion project announced in January 2007. However, major
equipment failures at the concentrator relating to Wedza Phase IV during the
third quarter of the year impacted mill throughput. The mill has now been
repaired and record tonnes were achieved in the fourth quarter of the year.
Wedza Phase V is now scheduled for hot commissioning in November 2007 and will
be finalised in January 2008.
Impala Refining Services
FY2007 was another record year in both operating and financial terms for Impala
Refining Services. Refined platinum production rose by 35% to 971,000 oz of
platinum. This increase was attributable in part to the continued ramp up in
production at Marula, Two Rivers and AQPSA`s Everest Mine, and increased
production from the Crocodile River mine. Also making favourable contributions
were A1 Specialised Services and Supplies Inc., with the ongoing supply of spent
autocatalyst material for recycling, and Lonmin, which delivered material during
that company`s recent smelter incident.
TRANSFORMATION
A transformation committee reporting at board level and responsible for
compliance and the implementation of relevant programmes and processes was
constituted during the year. Detailed plans to effect the required changes in
this regard have been developed.
In March 2007 the Black Economic Empowerment (BEE) ownership component of the
group`s transformation initiative was enhanced when a deal with the Royal
Bafokeng Holdings (Pty) Limited (RBH) was concluded. In terms of this
transaction, Impala Platinum agreed to pay the Royal Bafokeng Nation (RBN) all
royalties due to them, thus effectively discharging any further obligation to
pay royalties. In turn the RBN purchased 75.1 million Implats shares giving them
a total holding of 13.4% in the company.
A further component of the transformation initiative was the Employee Share
Ownership Programme (ESOP) where some 28,000 employees will benefit from the
appreciation in value of 3.0% (2.6% on a dilutive basis) of the group`s equity
ensuring them a direct interest in the future growth of the company. At the end
of the financial year this programme was worth in the region of R1 billion to
employees.
STRATEGIC ISSUES
Implats will remain a primary platinum producing company. Growth is integral to
the company`s strategic direction going forward, not only in terms of ounces,
but also in the realisation of value. There are essentially three areas of
growth:
* Organic growth from existing operations, namely Impala, Marula, Afplats, Two
Rivers, Mimosa and Zimplats.
* Future sources of production.
* The recycling market which will grow significantly in coming years.
PROSPECTS
Ongoing strong market conditions, coupled with our developing growth and
resource profile and strategic acquisition policy will ensure continued strong
performance from the group.
Fred Roux David Brown
Chairman Chief Executive Officer
Johannesburg
30 August 2007
DECLARATION OF FINAL DIVIDEND
A final dividend of 700 cents per share has been declared in respect of the year
ended 30 June 2007. The last day to trade ("cum" the dividend) in order to
participate in the dividend will be Friday, 14 September 2007. The share will
commence trading "ex" the dividend from the commencement of business on Monday,
17 September 2007 and the record date will be Friday, 21 September 2007.
The dividend is declared in the currency of the Republic of South Africa.
Payments from the London transfer office will be made in United Kingdom currency
at the rate of exchange ruling on 19 September 2007 or on the first day
thereafter on which a rate of exchange is available.
The dividend will be paid on Tuesday, 25 September 2007. Share certificates may
not be dematerialised/rematerialised during the period 17 September 2007 to 21
September 2007, both dates inclusive.
By order of the board
R Mahadevey
Group Secretary
Johannesburg
30 August 2007
CORPORATE INFORMATION
Registered Office
2 Fricker Road, Illovo 2196
(Private Bag X18, Northlands 2116)
Transfer Secretaries
South Africa:
Computershare Investor Services 2004 (Pty) Limited
70 Marshall Street, Johannesburg 2001 (PO Box 61051, Marshalltown 2107)
United Kingdom:
Computershare Investor Services PLC
The Pavilons, Bridgwater Road, Bristol, B513 8AE
Directors:
FJP Roux (Chairman), DH Brown (Chief Executive Officer), S Bessit, D Earp, F
Jakoet, JM McMahon*, MV Mennell, TV Mokgatlha, K Mokhele, NDB Orleyn, LJ Paton,
DS Phiri, JV Roberts, LC van Vught. *British
A copy of the annual report is available on the company`s website:
http://www.implats.co.za
Alternatively please contact the Company Secretary, via e-mail at
alan.snashall@implats.co.za or by post at Private Bag X18, Northlands 2116,
South Africa. Telephone: (011) 731 9000
Johannesburg
30 August 2007
Sponsor to Implats:
Deutsche Securities (SA)(Proprietary) Limited
Date: 30/08/2007 08:00:04 Produced by the JSE SENS Department.
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