JOHANNESBURG, South Africa, June 1, 2006 (PRIMEZONE) -- Impala Platinum Holdings Limited (Implats) (JSE:IMP) (LSE:IPLA) (ADRs:IMPUY) (Pink Sheets:IMPUY) is pleased to announce that its 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 US$153 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 claims.
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 two new underground mines at Ngezi.
-- The construction of a new 1.5 million tonnes per annum concentrator
at Ngezi.
-- 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.