Impala Canada advances integration into Implats Group

The acquisition of Impala Canada concluded on 13 December 2019 and the reported operational and financial results reflect the first full year of Implats’ ownership. Despite the logistical obstacles to travel and staffing due to Covid-19 restrictions, material progress was achieved in integrating Impala Canada into the broader Implats Group, with the development and implementation of technical, financial, environmental and stakeholder management processes.

Underground production rates increased by circa 20% during the period, despite Covid-19 staffing constraints, and changes were implemented to the processing flow sheet to improve the integrity and reliability of the concentrator plant.

Impala Canada delivered milled throughput of 3.90 million tonnes (FY2020: 1.55 million tonnes) and the milled grade improved to 2.59g/t in the period (FY2020: 2.45g/t), yielding 260 000 ounces 6E in concentrate (FY2020: 97 000 ounces).

In FY2020, the impact of Covid-19 accounted for total 6E production losses of 29 000 ounces. Gross costs of C$266 million were impacted by the start-up cost associated with the Sherriff Pit and resulted in a unit cost of C$1 021 per 6E ounce in concentrate. Covid-related expenditure of C$3 million equates to spend of C$12 per 6E ounce.

Capital expenditure of C$94 million was incurred on the development of the underground expansion project, the TSF and strengthening critical infrastructure at LDI. 6E sales volumes in concentrate increased to 260 000 ounces (FY2020: 97 000 ounces) and free cash flow generated increased to R3.1 billion (FY2020: R1.1 billion).

Impala Canada achieved gross profit of R4.1 billion (FY2020: R879 million) and contributed R2.8 billion in headline earnings (FY2020: R168 million) to the Group.

OUTLOOK

Impala Canada is expected to produce between 270 000 and 300 000 ounces of 6E in concentrate in FY2022. Capital expenditure of circa C$95 million to C$105 million is expected with spend on the mill decoupling project and continued development of the underground mine. Unit costs are expected to be C$950 to C$1 000 per 6E ounce in concentrate.

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