Implats - Empowerment Agreement and New Expansion Project
IMPALA PLATINUM HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1957/001979/06)
Share code: IMP/IMPO
EMPOWERMENT AGREEMENT AND NEW EXPANSION PROJECT
Impala Platinum Holdings Limited (Implats) is pleased to announce that their
subsidiary Zimplats has reached agreement with The Government of Zimbabwe which
creates the platform for further large scale investments into this operation.
Following extensive negotiations Zimplats has signed an agreement with the
Government of Zimbabwe relating to the release of a portion of its mining claims
in exchange for a combination of empowerment credits and cash. In addition, the
agreement ensures that the ground required for long term expansion is secured
under the special mining lease regime.
In terms of this agreement, Zimplats will release claims together amounting to
36% of the company"s resource base on the Great Dyke in Zimbabwe. The contained
metal in the ground to be released is 51 million ounces of platinum or 99
million ounces 4E (platinum, palladium, rhodium and gold).
The released ground is outside of Zimplats" long term expansion programme of 1
million platinum ounces per annum over a fifty year life of mine.
The agreement allows for the market value of the claims to be recognised. The
credit is calculated with reference to the weighted average share price of
Zimplats over the 30 days prior to signing of the agreement, multiplied by the
number of shares in issue.
The market value of the released claims is USD153 million and the weighted
average price of Zimplats shares during the 30 day period was US4.86. Using
these values, and the agreed formula, Zimplats will therefore receive a cash
credit and an empowerment credit to realise the full value of the released
The agreement also provides for all remaining claims retained for the long term
expansion to be incorporated into the special mining lease regime that applies
to Zimplats" current operations. This will facilitate the potential to fast-
track any expansion in these areas.
Following the signing of this agreement, both the Implats and Zimplats Boards
are pleased to announce that they have approved with immediate effect Phase 1 of
their long term expansion plan, and the replacement of the remaining opencast
operation with underground mining operations.
Phase 1 expansion will involve:
- New investment of US$258 million, including US$69.5 million for the
replacement of the opencast mine.
- Increase in platinum production from the current 90,000 ounces per annum to
160,000 ounces per annum (4E production will increase from 185,000 ounces
to 322,000 ounces per annum and Nickel production will increase from 1,540
tonnes to 2,900 tonnes per annum.)
- The simultaneous development of 2 new underground mines at Ngezi.
- The construction of a new 1.5 million tonnes per annum concentrator at
- The construction of 715 new staff houses near Ngezi, as well as the
upgrading of amenities within the area.
- The creation of 1,200 new direct jobs, plus an estimated further 3,000
contractor jobs during the three year construction phase.
31 May 2006
Issued by sponsor: Deutsche Securities (SA)(Proprietary) Limited
Date: 01/06/2006 07:00:22 AM Produced by the JSE SENS Department