IMP
IMPO
IMP - Implats - Condensed Consolidated Annual Results For The Year Ended 30
June 2009
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" or "the group")
CONDENSED CONSOLIDATED ANNUAL RESULTS FOR THE YEAR ENDED 30 JUNE 2009
A challenging year exacerbated by the economic crisis
A tragic accident in July claims nine lives
Key features
Disappointing safety performance
Revenues decline by 31%
Headline earnings per share decrease 52%
Lower production
Cost increases by 32%
Capex at R6.9 billion
Cash preservation remains paramount
Consistently returning dividends to shareholders
Income statement (Audited)
For the For the
Year ended Year ended
30 June 30 June
(R millions) Notes 2009 2008
Revenue 26 121 37 619
Cost of sales (16 359) (19 888)
Gross profit 9 762 17 731
Other operating expenses (497) (533)
Royalty expense (442) (648)
Profit from operations 8 823 16 550
Finance income 963 689
Finance cost (169) (155)
Net foreign exchange transaction (211) 439
(losses)/gains
Other expenses (54) (215)
Profit on sale of investments - 4 831
Share of profit of associates 41 678
Profit before tax 9 393 22 817
Income tax expense (3 389) (5 112)
Profit for the year 6 004 17 705
Profit attributable to:
Owners of the parent 6 020 17 596
Non-controlling interest (16) 109
6 004 17 705
Earnings per share (expressed in
cents per share - cps)
Basic 1 001 2 910
Diluted 1 000 2 907
Dividends to group shareholders 8
(cps)
Interim dividend (paid) 120 300
Final dividend (declared) 200 1 175
Dividends per share 320 1 475
Statement of financial position (Audited)
As at As at
30 June 30 June
(R millions) Notes 2009 2008
Assets
Non-current assets
Property, plant and equipment 5 26 224 20 601
Exploration and evaluation assets 5 4 294 4 294
Intangible assets 5 1 018 1 018
Investments, receivables and 14 644 13 692
prepayments
Current assets 11 500 22 504
Total assets 57 680 62 109
Equity and liabilities
Equity attributable to owners of the 40 939 43 418
parent
Non-controlling interest 1 864 1 885
Total equity 42 803 45 303
Long-term borrowings 7 1 778 1 464
Deferred tax liability 6 909 5 247
Long-term provisions 1 098 1 548
Current liabilities 5 092 8 547
Total equity and liabilities 57 680 62 109
Segmental analysis (Audited)
2009 2008
(R millions) Sales Profit Sales Profit
Mining segment
Impala 15 250 5 346 20 889 8 522
Marula 631 (333) 1 827 755
Zimplats 1 099 (229) 2 132 819
Mimosa 631 (140) 958 517
Afplats - (93) 161
Total mining segment 17 611 4 551 25 806 10 774
Refining Services 10 507 1 375 15 704 1 700
segment
Other - (786) - 5 693
Inter segment (1 997) 864 (3 891) (462)
adjustment
26 121 6 004 37 619 17 705
Capital expenditure Total assets
2009 2008 2009 2008
Mining segment:
Impala 4 782 3 415 36 549 38 922
Marula 398 345 2 794 1 970
Zimplats 1 358 1 319 4 881 3 583
Mimosa 277 144 1 295 1 287
Afplats 108 145 7 216 7 110
Total mining 6 923 5 368 52 735 52 872
Refining Services 3 777 8 053
Other 1 168 1 184
6 923 5 368 57 680 62 109
Headline earnings per share (Audited)
For the For the
Year ended Year ended
30 June 30 June
(R millions) 2009 2008
Profit attributable to owners of the 6 020 17 596
parent:
Adjustments net of tax:
Profit on disposal of property, plant (5) (4)
and equipment
Impairment of Zimplats Base Metal - 74
Refinery
Profit on the sale of investment - (5 181)
Headline earnings 6 015 12 485
Headline earnings per share 1 001 2 065
Weighted average number of ordinary 601.12 604.65
shares in issue (millions)
Cash flow statement (Audited)
For the For the
Year ended Year ended
30 June 30 June
(R millions) 2009 2008
Cash flows from operating activities 6 507 11 241
Cash flows (used in)/from investing (5 726) 1 279
activities
Cash flows used in financing activities (7 940) (5 455)
Net (decrease)/increase in cash and (7 159) 7 065
cash equivalents
Cash and cash equivalents at beginning 10 393 3 218
of year
Effects of exchange rate changes on 114 110
monetary assets
Cash and cash equivalents at end of 3 348 10 393
year
Statement of changes in equity (Audited)
Share
capital and Other
share Retained components
(R millions) premium earnings of equity
Balance at 30 June 2007 14 809 17 483 676
Movements (59) 17 596 (1 032)
Dividends (6 055)
Balance at 30 June 2008 14 750 29 024 (356)
Movements (681) 6 020 4
Dividends (7 822)
Balance at 30 June 2009 14 069 27 222 (352)
Attributable
to owners Non-
of the controlling Total
(R millions) parent interest equity
Balance at 30 June 2007 32 968 1 730 34 698
Movements 16 505 155 16 660
Dividends (6 055) (6 055)
Balance at 30 June 2008 43 418 1 885 45 303
Movements 5 343 (21) 5 322
Dividends (7 822) (7 822)
Balance at 30 June 2009 40 939 1 864 42 803
Statement of total comprehensive income (Audited)
Fair value Translation
adjustments of foreign
(R millions) investments subsidiaries Total
30 June 2008
Profit for the year
Fair value adjustment 577 577
Disposal of available-for-sale (1 890) (1 890)
financial asset
Currency translation reserve 327 327
Total comprehensive income for the (1 313) 327 (986)
year
30 June 2009
Profit for the year
Fair value adjustment (38) (38)
Currency translation reserve 37 37
Total comprehensive income for the (38) 37 (1)
year
Retained
(R millions) earnings Total
30 June 2008
Profit for the year 17 705 17 705
Fair value adjustment 577
Disposal of available-for-sale financial (1 890)
asset
Currency translation reserve 327
Total comprehensive income for the year 17 705 16 719
30 June 2009
Profit for the year 6 004 6 004
Fair value adjustment (38)
Currency translation reserve 37
Total comprehensive income for the year 6 004 6 003
Notes (Audited)
1 General information
The company is a limited liability company incorporated and domiciled in South
Africa. The address of its registered office is 2 Fricker Road, Illovo, 2196.
The Company has its primary listing on the JSE Limited. The consolidated
annual financial results were approved for issue on 27 August 2009.
2 Basis of preparation
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and IAS 34 Interim
Financial Reporting, 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).
3 Accounting policies
The consolidated financial statements have been prepared under the historical
cost convention except for the following:
Revaluation of available-for-sale financial investments and certain financial
assets and financial liabilities are at fair value, derivative financial
instruments and liabilities for cash-settled share-based payment arrangements
are based on fair value.
The principal accounting policies used by the group are consistent with those
of the previous year, except for the adoption of various revised and new
standards as fully described in the annual report available on the company`s
website. The adoption of these standards had no material impact on the
financial results for this financial year.
4 Audit opinion
The financial statements have been audited by PricewaterhouseCoopers Inc.
whose unqualified opinion is available for inspection at the registered office
of Implats.
5 Property, plant and equipment
Property, Exploration
plant and and evaluation Intangible
(R millions) equipment assets assets
Opening net book amount 16 029 4 294 1 018
as at 30 June 2007
Additions 5 368
Disposals (43)
Exchange adjustment on 344
translation
Depreciation, (1 097)
amortisation and other
movements
Closing net book amount 20 601 4 294 1 018
as at 30 June 2008
Additions 6 923
Disposals (44)
Exchange adjustment on (277)
translation
Depreciation, (979)
amortisation and other
movements
Closing net book amount 26 224 4 294 1 018
as at 30 June 2009
6 Capital commitments and derivative exposure
Capital expenditure approved at 30 June 2009 amounted to R22.1 billion (June
2008: R20.6 billion), of which R2.9 billion (June 2008: R3.9 billion) is
already committed. This expenditure will be funded internally and if
necessary, from borrowings. With regards to derivative instruments, the group,
from time to time, sells refined metal on behalf of third parties, into the
market with a commitment to repurchase the metal at a later date. The net fair
value of the commitments as at 30 June 2009 amounted to R38 million (2008:
R318 million).
7 Long-term borrowings
Borrowings from Standard Bank of South Africa Limited:
Loans obtained by BEE partners for purchasing a 27% share in Marula Platinum
(Proprietary) Limited amounting to R710 million (2008: R755 million). The loan
carries interest at JIBAR plus 130 (2008: 90) basis points and a revolving
credit facility amounting to R107 million (2008: R57 million), which carries
interest at JIBAR plus 145 (2008: 100) basis points. The loans are repayable
over 6.5 (2008: 7.5) years. The rise in basis points is due to an increase of
R89 million on the term facility and R55 million on the revolving credit
facility.
A loan facility of R621 million (USD80 million) (2008: R635 million (USD80
million)) was obtained to partially finance the Ngezi Phase 1 expansion at
Zimplats. An amount of R588 million (USD76 million) (2008: R404 million (USD51
million)) of this facility was drawn at the end of the period. The loan
carries interest at LIBOR plus 700 (2008: 700) basis points. It is repayable
in 12 equal quarterly instalments starting December 2009 and will be repaid by
December 2012. The loan is secured by cessions over cash, debtors and revenues
of Zimbabwe Platinum Mines (Pvt) Limited.
A loan facility of R300 million was obtained to finance the expansion of
underground mine and related above-ground processing facilities at Zimplats.
An amount of R261 million of this facility was drawn at the end of the period.
The loan carries interest at JIBAR plus 700 basis points. It is repayable in
10 semi-annual instalments starting December 2010 and will be repaid by June
2015. Zimplats secured additional funding of R200 million in July 2009, which
increased the total term loan facility to R500 million. The loans are secured
by sessions over cash, debtors and revenues of Zimbabwe Platinum Mines (Pvt)
Limited.
8 Dividends per share
On 27 August 2009, a sub-committee of the board declared a final cash dividend
of 200 cents per share amounting to R1.2 billion in respect of financial year
2009. Secondary Tax on Companies (STC) on the dividend will amount to R120
million.
(R millions) 2009 2008
Dividends paid
Final dividend No. 81 for 2008 of 1 175 (2007: 700) cents 7 110 4 237
per share
Interim dividend No 82 for 2009 of 120 (2008: 300) cents 712 1 818
per share
7 822 6 055
9 Guarantees
At year end the group had bank and other guarantees of R508 million (2008:
R542 million).
10 Contingencies
The Zimbabwe Revenue Authority (ZIMRA) has issued an amended assessment to the
value of R217 million (USD28 million) for additional profits tax on Zimbabwe
Platinum Mines (Pvt) Ltd. An objection has been lodged on the basis that
additional profits tax is not payable in terms of an agreement entered into
with the Zimbabwean government.
Operating statistics
(R millions) 2009 2008
Gross refined production
Platinum (000oz) 1 704 1 907
Palladium (000oz) 1 008 1 044
Rhodium (000oz) 248 261
Nickel (000t) 15 15
IRS returned metal
Platinum (000oz) 194 208
Palladium (000oz) 181 199
Rhodium (000oz) 38 42
Nickel (000t) 3 2
Group consolidated statistics
Exchange rate: (R/$)
Closing rate on 30 June 7.76 7.93
Average rate achieved 8.63 7.32
Revenue per platinum ounce sold ($/oz) 1 995 2 941
(R/oz) 17 217 21 528
Prices achieved
Platinum ($/oz) 1 219 1 598
Palladium ($/oz) 263 390
Rhodium ($/oz) 3 517 6 963
Nickel ($/t) 12 995 30 253
Sales volumes
Platinum (000oz) 1 503 1 739
Palladium (000oz) 781 885
Rhodium (000oz) 180 197
Nickel (000t) 14 13
Financial ratios
Gross margin achieved (%) 37 47
Return on equity (%) 14 38
Return on total assets (%) 10 20
Debt to equity (%) 4 3
Operating indicators
Tonnes milled (000t) 20 083 20 380
PGM refined production (000oz) 3 428 3 644
Capital expenditure (Rm) 6 923 5 368
Cost per platinum ounce excluding share (R/oz) 9 129 6 930
based payments
($/oz) 1 005 954
Safety
Safety remains the key priority for Implats, and we are committed to achieving
our vision of Zero Harm. It is regrettable that eleven employees lost their
lives at work during the financial year. The tragedy involving nine employees
in a fall-of-ground incident at 14 Shaft in July 2009 was a disappointing blow
for the group. We extend our sincere condolences to the families and friends
of all those who died.
The group`s safety performance did, nevertheless, improve marginally during
the year. The improvement in the fatality rate (FIFR), however, belies the
disappointing safety records of both the Rustenburg and Marula operations. The
Lost Time Injury Frequency Rate (LTIFR) for the group was maintained at 2.92
per million man-hours worked.
It is of great concern to the company that safety performance was well below
the targets set. A number of safety initiatives, developed jointly with our
Unions, were rolled out during the year. These include:
creating and promoting a safety culture within every employee at Implats;
safety communication using sms-messaging, e-mail, posters and billboards and
our Safety Health and Environment (SHE) structures;
enforcing compliance with our new Platinum Rules; and
visible safety leadership using our behaviour-based safety programmes and
recognition of outstanding safety leaders and achievers in the company.
Implats welcomes the Department of Mineral Resources` attention to safety and
applauds all efforts to increase safety in the mining industry. It is only
through the involvement of all role-players, including government, unions,
management, employees, employee safety representatives and members of the
community, that a safer working environment will be created. The realisation
of our vision of Zero Harm will only be achieved through a collective effort.
Market Overview
The slowdown in the rate of decline of new vehicle sales in developed
economies, accompanied by the emergence of China as a major player in the
world vehicle market, is stabilising autocatalyst demand. This is being
underpinned by strong demand from the Chinese platinum jewellery industry as
manufacturers restock on the back of renewed consumer appetite at lower price
levels. Consumption from this sector over the first half of this calendar year
has more than equalled the consumption during 2008. Other factors, including
the restocking from Japanese investors following the liquidation of the
previous year, the increased appeal of platinum ETF`s, the introduction of
vehicle scrappage incentives in various developed economies and a number of
primary supply cutbacks, indicate a platinum market that is close to balance
despite the global recession.
The significant reduction in new vehicle inventory, coupled with government
sponsored incentive programmes will stimulate new-vehicle build which in turn
will be broadly supportive of an economic recovery over the next twelve
months. Returning industrial interest in platinum, in conjunction with
positive price movements, is expected to be at the expense of a portion of
Chinese jewellery demand. We expect the market to move progressively into
deficit over the medium-term due to improving demand and a lack of investment
in new capacity which will curtail the growth in supply.
A sustainable appreciation in the platinum price is forecast over the medium
term in line with improved fundamentals. The increase in dollar liquidity
following quantitative easing measures is expected to be broadly supportive of
PGM prices. The caveat is that the Rand could be `stronger for longer`.
The growth in the Chinese vehicle market, supported by a turnaround in the
North American market, is expected to result in the palladium market moving
into increasing deficits over the medium term. While the potential for
significant price appreciation will continue to be capped by above-ground
Zurich stocks, prices are expected to steadily firm over the upcoming years.
Rhodium continues to be supported at current price levels by consumer
restocking following the massive selloff over the latter half of 2008. The
incentive to thrift has abated at the current price levels and we expect
tightening emission standards to underpin rhodium demand over the medium term.
The market remains fully supplied and will continue to be so for the next few
years.
Financial Review
Revenue
The plight of the global economy impacted financial performance and sales for
the 2009 financial year decreased by 31% to R26.1 billion from R37.6 billion
in the previous financial year. In dollar terms, sales were 41% lower at $3.0
billion. This was a result of:
lower sales volumes - there was a 10% decrease in sales volumes, resulting in
a negative variance of R3.8 billion;
lower metal prices - significant falls in the price of certain metals, in
dollar terms were worse than anticipated. Platinum, palladium and rhodium
prices decreased by 24%, 33% and 49% respectively, dollar revenues per
platinum ounce sold fell by 32% to $1 995/oz and contributed to a negative
price variance of R11.7 billion; and
a volatile R/$ exchange rate - The average exchange rate achieved for the
year was R8.63/$, compared with R7.32/$ for FY2008.This resulted in a positive
exchange rate variance of R3.9 billion.
Cost of sales
Cost of sales decreased by 18% to R16.4 billion from R19.9 billion in FY2008.
There were several key drivers:
cost of purchases (net of change in stock) decreased by R3.8 billion, mainly
due to 20% decrease in rand metal prices and lower volumes; and
lower share-based payments changed from a cost of R1 042 million to a credit
of R717 million. This was due to a fall in share price.
These decreases were offset by:
the cost of labour increased by 14.6%; and
the price of consumables also rose steeply: explosives increased by 23%,
support 27%, mining contractors 29%, coal 65% and electricity 24%.
The unit cost per platinum ounce produced rose by 10% to R8 526. Excluding
share-based payments credit of R717 million, unit cost per platinum ounce
relating to operating costs increased by 32% to R9 129/oz.
Headline earnings
Headline earnings for the financial year decreased by 52% to 1 001 cents per
share, from 2 065 cents per share in FY2008, as a result of:
an R8.0 billion decline in gross profit; and
the reduction in the share of profit from associates of R637 million is due
to the sale of AQP(SA) in the previous financial year.
This was, however, offset by a decrease in taxation of R1.7 billion because of
lower taxable income and lower STC resulting from decreased dividends.
Cashflow
Net cash generated from operating activities amounted to R6.5 billion.
Net cash used in investing activities is mainly as a result of capital
expenditure of R6.8 billion.
Dividend payments totalling R7.8 billion were made during the year.
The group will continue to fund cash requirements from cash generated from
operations, and will use its adequate banking facilities to cover any
shortfalls.
The net result of Implats` operating, investing and financing activities was a
net cash outflow of R7.2 billion. When combined with the opening balance of
R10.4 billion and the positive translation of R0.1 billion, this resulted in a
closing cash and cash-equivalent balance of R3.3 billion.
Operational Review
Production and cost performance have been extremely disappointing. Gross
platinum production for the group declined by 11% to 1.7 million ounces
impacted by lower output from Impala Rustenburg and IRS, the latter due to
lower deliveries from third parties.
IMPALA PLATINUM
The deterioration in safety performance at Impala Rustenburg, where the number
of fatalities doubled period-on-period, is unacceptable. Ten employees lost
their lives in various accidents. The primary cause of the majority of these
incidents was equipment-related, whilst two were the result of falls of
ground, the principal cause of fatal incidents in prior years. The focus going
forward remains on leadership and training. In conjunction with these
programmes, a communication initiative is being undertaken in order to raise
safety awareness levels and to engender a safety culture among all employees.
The quantum of Merensky ore mined declined by 12% to 6.8 million tonnes from
the previous period, with underground ore sourced from UG2 remaining virtually
unchanged at 7.8 million tonnes. The decline in Merensky can be attributed to
a lack of adequate on-reef development on the major Merensky shafts, namely
11, 12 and 14. This resulted in limited face availability, and consequently a
lack of mining flexibility. The decline in volumes is also attributed to poor
operational efficiencies due to the failure to complete the mining cycle,
which was compounded by safety stoppages and poor discipline.
The decline in Merensky tonnage impacted on the ore mix, which increased to
55:45 in favour of the lower plainum grade UG2, which is characterised by
lower recoveries. (The overall platinum yield for the UG2 is some 20% less
than that for the Merensky.) The drop in grade was further exacerbated by
dilution resulting from increased off-reef mining. As a consequence, refined
platinum production declined by 9% from 1 044 000 ounces in the previous year
to 950 000 ounces. The reduced volumes negatively impacted unit costs, which
rose 31% to R8 559 (excluding share-based payments).
The key mining initiatives in FY2010 will focus on on-reef development and the
timeous delivery of Merensky volumes, particularly at 11, 12 and 14 shafts. In
order to ensure the requisite mining flexibility, plans are in place to
increase on-reef development by approximately 30% next year. New supervisory
structures have been put in place to ensure delivery against these targets. It
is estimated that it will take 2 years to restore on-reef/off-reef development
to the correct balance. During this period, grade will continue to be impacted
by the mix.
MARULA
Marula had a difficult year characterised by an unsatisfactory safety
performance, a slower-than-expected ramp-up in production, reduced
productivity and persistent labour issues. This operation has been
particularly affected by the economic slowdown.
Sadly, one employee lost his life at work during the year, whilst the LTIFR
deteriorated from the previous year - a disturbing trend requiring serious
management intervention.
The 1.57 million tonnes milled, though slightly up on the previous year, was
well short of the operation`s internal target as the production ramp-up once
again fell behind schedule. This failure can be attributed to a lack of
adequate on-reef development, which resulted in a lack of face availability
and, consequently, limited mining flexibility. Grade fell slightly as
production from the higher-grade Driekop shaft declined, and on-reef
development at the Clapham shaft increased. Team efficiencies and productivity
were of concern, and were impacted by the introduction of new teams to the
conventional section as well as safety stoppages and industrial action during
the year. As a consequence, platinum production rose only a disappointing 5%
to 74 000 ounces in concentrate.
Unit costs rose 30% (excluding share-based payments) on the back of the high
inflationary environment and lower than expected throughput. Increased volumes
and higher efficiencies should contain costs going forward.
Marula has a difficult year ahead as it focuses on continuing its ramp-up to
full production and ensuring profitability. The ongoing viability of the
operation will be continuing not only by higher metal prices and more
favourable exchange rates, but also by a safer working environment, good cost
management and improved operational performance - all of which are receiving
concerted management attention.
ZIMPLATS
Zimplats delivered an excellent safety performance and remains the leader in
the group in this area. Output of platinum in matte rose marginally year-on-
year as the operation geared itself for the ramp-up in production from the
Phase 1 expansion in FY2010. Open-pit mining, which had already been scaled
back because of high costs, was finally halted in November 2008 in response to
the slump in metal prices. Underground production from Portal 2 was ramped up
to maintain production levels. The open-pit orebody continues to provide
optionality should the market environment demand fast access to additional ore
in the future.
The Phase 1 expansion, a USD340 million project involving the development of
two underground mines (Portal 1 and Portal 4), a new concentrator and other
infrastructure, is on track. Portal 1 reached full production in December 2008
(1 million tonnes a year), and Portal 4 is scheduled to reach this milestone
in 2011 (2 million tonnes a year). The concentrator, was commissioned in July
2009 and should reach its full production capacity of 2 million tonnes per
annum in October 2009.
In the wake of the dramatic decline in metal prices and the dollarisation of
the Zimbabwean economy, both operating costs and capital expenditure were
reviewed during the period with a view to minimising debt and conserving cash.
Unit costs were negatively impacted by the increase in overhead costs as the
operation prepared for ramp-up to full production in the coming year. Once
this is achieved, Zimplats will become one of the lowest-cost primary
producers in the world.
In the coming year, the Phase 1 expansion will ramp-up to full production of
approximately 4.2 million milled tonnes per annum. Steady-state output of 180
000 platinum ounces will be achieved in 2010. Future growth at Zimplats
depends on a politically stable investment environment. Various expansion
options in this regard are currently being investigated. A future expansion
could involve the development of underground mines, another concentrator, a
dam, as well as a new smelter.
MIMOSA
Mimosa had a solid, trouble-free year during which all key production and
expansion parameters were met. The Wedza Phase 5 expansion project,
commissioned last year, was completed. It focused on the extension of milling
and tailings handling facility capacities in order to optimise the extra
flotation capacity created in Phase 4. As a result, total tonnes milled
increased by 21% to 2.1 million tonnes. Consequently, production of platinum-
in-concentrate rose 19% to 91 500 ounces. Unit costs were 35% higher year-on-
year, mainly driven by higher input costs due to the dollarisation of the
Zimbabwean economy, inflation and the impact of the rand/dollar exchange rate.
Mimosa has now achieved capacity for steady-state production of 100 000 ounces
of platinum-in-concentrate a year. No further expansions are envisaged at this
stage.
TWO RIVERS
Two Rivers successfully completed its ramp-up to full production, reaching its
nameplate milling capacity of 225 000 tonnes per month in June 2007. The plant
optimisation, which involved increased crushing capacity, additional cleaner
circuit cells and filter capacity, is on schedule for completion in the first
quarter of FY2010.
Subject to regulatory approval from the DMR, Implats will vend portions of the
farm Kalkfontein, as well as the farm Tweefontein prospecting rights to Two
Rivers in return for a further 4% equity stake. This will take Implats`
holding up to 49% in this joint venture.
Plant optimisation will result in a marginal increase in tonnes milled to 2.8
million in FY2010. Coupled with further improvements in concentrator
recoveries, platinum-in-concentrate production for next year is forecast at
130 000 ounces, increasing to 150 000 ounces by FY2013. The establishment of
mining infrastructure in the area, together with the Kalkfontein resource,
provides additional growth and flexibility for the company.
IMPALA REFINING SERVICES (IRS)
IRS, which leverages Impala`s smelting and refining assets to process
concentrate and matte for group operations as well as other third parties, saw
a 13% decline in refined platinum production during the year. As expected, the
Kroondal contract ended in March 2008, resulting in a drop of 130 000 ounces
through IRS. Further ounces were lost following the collapse of the decline at
Everest, which caused the suspension of operations at that mine in December
2008.
Future growth in platinum output at IRS in the short-term will emanate from
the continued ramp-up in production at Zimplats and Marula, as well as the two
new projects, Smokey Hills and Blue Ridge. Everest is expected to resume
production in the medium term.
IRS has access to additional capacity and therefore is well positioned to
expand throughput significantly.
Capital Expenditure
Group capital expenditure for FY2009 totalled R6.9 billion compared to the
R5.4 billion in the previous period. The bulk of this capital expenditure was
spent at Impala on the development of 16, 17 and 20 shafts. These new-
generation deeper-level shafts will replace older shafts that will reach the
end of their lives. Number 20 shaft will commence production in FY2011. This
will be followed by 16 shaft in FY2013 and 17 shaft in FY2016. At full
production, the latter shafts will produce in the region of 330 000 ounces of
platinum.
Zimplats and Marula spent R1.4 billion and R398 million respectively during
the year on their ongoing ramp-ups. Forecast capital expenditure for FY2010 is
estimated at R5 billion. Cash preservation remains paramount for the group
and, in the light of the current market environment it was deemed prudent to
defer long lead projects such as Leeuwkop and Marula Merensky. As a result,
capital expenditure over the next five years will amount to R23 billion which
will be managed in line with group profitability and cash flow.
Prospects
In the shorter term, we believe the platinum market will remain close to a
position of balance, with lower supply being welcome given the demand
destruction in the automobile industry. The next financial year will be a
difficult one due to the slow recovery of the world economy, and improved
sentiment will only likely be seen towards the end of this period resulting in
a resurgence in the market.
The challenge in the interim is for the group to position itself to take
advantage of the next upturn. We are currently focusing on ensuring a stable
production base in the short-term. Looking forward, there are several organic
growth opportunities available to us, and these will be embarked upon as soon
as funding constraints abate and the timing is right. Given an improved
environment in Zimbabwe, it will be possible in due course to increase
platinum production significantly. This organic growth potential, taken
together with that of the South African operations, will ensure that future
growth will not be constrained. Further opportunities to add to the resource
base will continue to receive attention as will opportunities to utilise
smelting and refining assets for third party processing.
Fred Roux David Brown Johannesburg
Chairman Chief Executive Officer 27 August 2009
DECLARATION OF FINAL CASH DIVIDEND
A final cash dividend of 200 cents per share has been declared in respect of
the financial year ended 30 June 2009. The last day to trade ("cum" the
dividend) in order to participate in the dividend will be Friday, 11 September
2009. The share will commence trading "ex" the dividend from the commencement
of business on Monday, 14 September 2009 and the record date will be Friday,
18 September 2009.
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 Thursday, 17 September 2009, or on
the first day thereafter on which a rate of exchange is available.
A further announcement stating the Rand/GBP conversion rate will be released
through the relevant South African and UK news services on Friday, 18
September 2009.
The dividend will be paid on Monday, 21 September 2009. Share certificates may
not be dematerialised/rematerialised during the period Monday, 14 September
2009 to Friday, 18 September 2009, both dates inclusive.
By order of the Board
A Parboosing Johannesburg
Group Company Secretary 27 August 2009
Corporate Information
Registered Office
2 Fricker Road, Illovo 2196
(Private Bag X18, Northlands 2116)
Transfer Secretaries
South Africa: Computershare Investor Services (Pty) Limited
70 Marshall Street, Johannesburg, 2001, (P.O. Box 61051, Marshalltown, 2107)
United Kingdom: Computershare Investor Services plc
The Pavilons, Bridgwater Road, Bristol, BS13 8AE
Directors
FJP Roux (Chairman), DH Brown (Chief Executive Officer), S Bessit, D Earp, F
Jakoet, JM McMahon*, MV Mennell, TV Mokgatlha (Alt: N Carroll), K Mokhele, NDB
Orleyn, LJ Paton, DS Phiri, *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
avanthi.parboosing@implats.co.za or by post at Private Bag X18, Northlands
2116, South Africa. Telephone: (011) 731 9000
27 August 2009
Johannesburg
Sponsor to Implats:
Deutsche Securities (SA)(Proprietary) Limited
Date: 27/08/2009 08:00:01 Produced by the JSE SENS Department.
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