Overview - Formerly known as Zimbabwe Platinum Mines Limited, Zimplats Holdings Limited (Zimplats) is 86.9%-owned by Impala Platinum Holdings Limited (Implats).

Keywords   South Africa   platinum   open pit

Implats' holding in Zimplats gives it access to rights over 161 million ounces of platinum resources on the Great Dyke, which is the second largest known near-surface PGM-resource in the world. Implats has both the technical and financial resources and the proven track record to effectively exploit this opportunity.

Ownership Summary  Name: Zimplats Platinum Holding Ltd    Interest: 100%    Note: public Reference: June 30, 2006

Zimplats currently mines just over 2 million tonnes annually to produce 86,800 ounces of platinum-in-matte. They expect annual production to be increased to 160,000 ounces by FY2010.

Location - Zimplats, which is located on the northern part of the Zimbabwean Great Dyke, the world's second largest PGM deposit, consists of Ngezi opencast mine - a shallow ore deposit, Selous Metallurgical Complex - located 77km from Ngezi and where the ore is milled, concentrated and smelted and Hartley Platinum Mine - currently under care and maintenance.

Zimplats is located 150 kilometres southwest of Harare, Zimbabwe's capital, which is located in the north-eastern part of the country at an elevation of 1,483 metres. Zimbabwe enjoys a subtropical climate because of its high average altitude. Mean monthly temperatures in Harare range from 14°C in July to 21°C in October. An extended dry season occurs from May through October. Average annual rainfall increases generally from south-west to north-east, averaging, less than 400mm in the Limpopo Valley along the border with South Africa to more than 1,000mm in the Eastern Highlands.

Location Summary Nearest Landmark: HARARE Distance from Landmark: 150km Direction from Landmark: SW Latitude: 18 deg 40 min S Longitude: 30 deg 21 min E Satellite Image: <click to view>

The geologist and explorer Dr. Carl Mauch first recorded the Great Dyke in 1867, but it was not until around 1918 that the presence of platinum, along with nickel and copper, was noted in the rocks of the Great Dyke. The 2.6 billion-year-old Great Dyke is a sinuous, layered, mafic-ultramafic intrusion, which is 550km long with a width ranging between 4km and 11km.

Property - Although platinum was first discovered in the Great Dyke in 1925, its exploitation was overshadowed by that of the Bushveld Complex in South Africa. Focus has returned to the Great Dyke following the increase in demand for platinum and given that much of the shallow resources in the Bushveld Complex are spoken for.

Deposit Summary Deposit Type: ultramific reef Primary Commodity: platinum

The Great Dyke is a layered complex similar to that of the Bushveld Complex; however, its geometry is elongated overall. It extends for 550km and has a maximum width of 11km, although this does vary. The stratigraphy is broadly divided between the lower ultramafic and the overlying mafic (around 1,100 metres thick) sequences. The ultramafic sequence hosts the P1 pyroxenite, directly below the mafic-ultramafic contact. The P1 pyroxenite, which is marked by significant lateral variations in thickness, texture and composition, hosts the economic PGE-bearing Main Sulphide Zone (MSZ).

Reserves Summary Name: Zimplats (Ngazi) Commodity: platinum Class: Proven + Probable Tonnage: 254.3 Mtonnes Grade: 3.35 g/t Note: 3 PGE & Au Reference: June 30, 2006

The MSZ is a discontinuous PGE-mineralised zone with a potential strike of some 400km and is generally 2-3 metres thick. The optimal mineralisation varies and, in contrast to the Bushveld Complex, is often difficult to follow visually. Peak values for the PGM and base metals are commonly offset, while the proportions between platinum and palladium also vary vertically.

Operation - Zimplats currently operate both opencast and underground operations, however, given the increase in opencast contractor mining costs, it was decided to reduce the volume of tonnes mined at the opencast pit and to increase the volumes mined underground. In addition to being less costly, the underground ore is of a higher grade and the underground operation will be owner operated. The Implats and Zimplats boards approved an expansion to the underground trial mine from 240,000 tonnes to 1 million tonnes annually over the next two years at a capital cost of $46 million.

A feasibility study to replace the remaining opencast production with underground ore and to simultaneously expand to 145,000 ounces of platinum is nearing completion. This will involve the construction of two underground mines at Portal 1 and Portal 4 as well as a 1.5 million tonne per annum concentrator.

Mine Production Summary  Mine - Zimplats (Ngezi)    Capacity: 2.205 Mtonnes/y    Rate: 2.205 Mtonnes/y Reference: Dec 31, 2006

The new crusher was commissioned in July 2006, and will see production from the Portal 2 mine reach the 80 000 tonnes per month planned target early in the new financial year. The Portal 2 underground mine project has been successfully implemented at well below budgeted cost, which is very encouraging and bodes well for future underground expansion.

Process - Ore is transported to the Selous Metallurgical Complex (SMC) for milling, concentrating and smelting via Australian-style road trains and the smelter matte is then transported to Mineral Processes in Rustenburg, South Africa for processing in terms of an offtake agreement with Impala Refining Services.

At the SMC, located 77km from Ngezi, both the semi-autogenous mill and the ball mill were relined during the 2005 year. Liners of a different design were installed in the semi-autogenous mill in an attempt to improve mill throughput and the efficacy of this is still being assessed.

Processing Summary  Facility - Selous Metallurgical Complex    Capacity: 2.018 Mtonnes/y    Rate: 2.018 Mtonnes/y  Product    Commodity: platinum    Quantity: 90,318 oz    Cost: 511 $    Note: cash cost per 4E oz Reference: Dec 31, 2006

Mill feed was hampered by a one-day national industrial action in November and a breakdown on the primary crusher (a total of 163 hours were lost) at Ngezi. The crusher was taken off-line for repairs at the beginning of July 2005.

Overall concentrator recoveries were hampered by the increase in partially oxidized ore milled in the first half of the year as industrial action by the opencast contractors at the end of the previous financial year disrupted the mining sequence in the opencast mine. Concentrator recoveries improved in the second half of the year with finer grind being achieved and a reduction in the volume of oxidized material processed. Record average recovery levels were reported during the third quarter of the 2005.

Environment and Community - Although there was a deterioration in safety at Zimplats during 2006, this operation was still the best performer in terms of safety within the Implats group. Zimplats, who had a fatality-free year, emphasizes a management-driven culture of safety with the focus on behaviour-based safety programmes.

Following extensive discussions regarding empowerment and indigenisation, it was announced on 31 May 2006 that Zimplats had entered into an agreement with the government of Zimbabwe on the release of a portion of its property to the government which accounted for 36% of its Mineral Resource base in exchange for a combination of empowerment credits of 19.5% and $51million in cash or equity in a joint venture. The agreement also allows for the ground Zimplats requires for long-term expansion to be secured in terms of the special mining lease. The portion of land to be released contains an estimated 51 million ounces of platinum or 99 million ounces (3E + Au) and does not affect Zimplats long-term expansion programme to produce at least 1 million ounces of platinum annually over the 50 year life of mine. The land to be released is in the north of the property held by Zimplats and excludes the land on which the Selous Metallurgical Complex and the old Hartley mine are located.