1 February 2013

Zimbabwe: Mimosa's Revenue Up 16 Percent

MIMOSA Mining Company posted revenue of US$68 million in the quarter to December 2012, an increase of 16% from the previous quarter.

However, production in the December quarter decreased 6% to 52 752 ounces from the previous September quarter but increased 5% against the comparable year ago period.

Co-parent Aquarius Platinum in its quarter results said the decrease in production was in line with forecasts.

Tonnage produced decreased 5% to 600 066t, which the group said was also in line with forecasts. Volumes processed were down 7% to 575 638t. There had been a slight improvement in the head grade to 3.67g/t while recoveries were at 77.8%.

However, mining cash costs increased by 8% to US$82 per tonne, and costs per PGM ounce by 8% to US$897.

"The Mimosa mine continues to operate well, despite growing cost pressures which led to above- expectation increases in costs," the quarter results showed.

The group said the higher costs were mainly due to decreased PGM production relative to the first quarter (September), the temporary increase in reagent usage, as well as costs incurred in building the ore stockpile following the fire incident in May 2012. Stockpiles at the end of the quarter totalled approximately 123 191t.

Metal recoveries, though marginally improved from the previous quarter, were still below expected levels. The consumption of chemicals and reagents had increased and exceeded budget in an effort to improve recoveries and to counter lower-than-anticipated process efficiencies.

The group said the reagents would be changed as soon as existing inventory levels had been depleted by June 2013. "A dedicated team has been put in place to work on an initiative to improve recoveries and other plant efficiencies by about 3% within the next 12 months."

Mimosa's capex in the quarter was US$9 million.

Expenditure was mainly incurred for mobile equipment, drill rigs and loader-hauler- dumpers, conveyor belt extension, down dip development, and housing projects. Stay-in-business capital expenditure was US$171 per PGM ounce for the quarter. The cash margin for the period decreased from 20 to 16% due to increased costs.

Mimosa has the shortest reserve life in Zimbabwe of 58 years. Its resource is estimated at 15 million ounces.

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