Acquisitions on the backburner for Implats after C$1bn Canada buy
Monday, September 21, 2020 - 12:28:28 PM
Mining Weekly

Participating in the 2020 Denver Gold Forum Americas conference, he said on Sunday that PGM prices were elevated and that assets were priced accordingly.

“We do not believe it is in our best interest to go on a major acquisition spree at the moment,” Muller said on the first day of the event, which is being held virtually.

Having endured a decade of depressed PGM prices, Implats’ balance sheet focus was on debt reduction and ensuring its shareholders were rewarded with financial returns for the faith that they had shown in the company, he said.

Implats in December 2019 bought North American Palladium (NAP) for C$1-billion, marking its foray into the North American market – a key growth area for the PGMs producer.

Operating as Impala Canada, the group is excited about the long-term potential of its mine near Thunder Bay, Ontario. In the six months since Implats took over operations, the mine life has been extended from eight years to 11 years and Muller is confident that Lac des Iles has potential to operate for the next 20 years.

On its decision to turn down an option to extend its 15% stake in the Waterberg joint venture project, in South Africa, to 50%, Muller said that Implats was supportive of the orebody and the asset, but that, unlike the cash-generative NAP acquisition, the Waterberg project would have triggered a cash obligation.

Besides North America, Implats sees Zimbabwe as a key growth area for the company. Muller said the group was a “happy investor” in Zimbabwe, notwithstanding the jurisdiction risk and socioeconomic upheaval experienced in that country.

“It would be useful if the socioeconomic conditions were to improve, but we have a very positive orientation towards future potential of Zimbabwe and we see the country as a potential growth node for the company,” he said.

Implats’ cornerstone assets in that country – Zimplats and its shareholding in the Mimosa joint venture – have been world-class and some of the group’s best-performing assets.

Despite policy uncertainty in Zimbabwe, Muller said that Implats, to date, had not struggled to extract any of the foreign currency earned by those assets.$1bn-Canada-buy
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