Zimplats / Makwiro Platinum – Profitably Commissioning Ngezi

• By the end of the June Quarter 2002, following several modifications to the plant (as it had never run as Hartley at full capacity), the concentrator was operating at its 6000tpd design capacity of 2.2mtpa and ZIM was in positive cashflow, its 70% held Makwiro Platinum having produced and sold 18,680oz Pt in the quarter or 38,400oz PGE .
• Given ZIM’s vast landholding containing delineated ore resources, there are significant upside scenarios for Zimplats and its resulting share price. In our opinion, there are 3 key factors influencing ZIM’s future, namely the success of the underground trial at Ngezi, the decision on a new plant probably in 2003, and the integration of Mwakiro and Impala into a simpler corporate structure.
• A study appears likely to occur in 2003 to decide on the scope of the first expansion which could involve a doubling of production. The first expansion may be influenced by the progress of the trial underground mine, as to what mix occurs with possibly a new open-cut further north.
• The underground mining at Ngezi has the advantage of having time on its side to develop a mining method since the open-cut is currently supplying the mill requirement of 2.2mtpa, and it can base its design on the (AQP/IMP) Mimosa mine to the south which has spent 6 years refining its underground mining method.

Apex Minerals NL (AXM) – Moving Into the Drilling Phase

• Apex Minerals has made material progress since its inception only one year ago in October 2001, and IPO primarily as a platinum exploration company in June 2002. It owns 80% of two significantly sized projects in WA namely the Windimurra Superproject focusing on PGE, nickel and gold, and the Jillawarra Project focusing on copper – gold mineralisation.
• Apex is run by Stephen Stone who favours lateral thinking and the use of the latest geological exploration techniques in combination with tried and tested methods, which resulted in one of his previous companies discovering the Weld Range PGE mineralisaton which apparently had not been recognised before.
• This viewpoint has resulted in Apex going “back to basics” on its two projects while using up-to-date technology, and has highlighted areas of these projects that were apparently not considered prospective and have been little or poorly explored. While fieldwork is still continuing at Windimurra, drilling is expected to commence early in 2003.
• The southernmost intrusion of the Windimurra Superproject is called Narndee and has been farmed out to a 50/50 JV between Falconbridge and Impala Platinum, in which the Falconbridge JV can earn 70% of Apex’s 80% by spending $4m over 5 years, or 80% of 80% of any specific areas it selects to take through to a BFS. The Falconbridge JV have completed their fieldwork following their recently completed aeromag, and also expect to commence drilling in the March Quarter of 2003.

Hill End Gold Limited – Expecting to Generate Cashflow by mid - 2003.

• The IPO Offer : Hill End Gold Limited (HEG) is offering a subscription of 17.5m shares at 20c to raise $3.5m (minimum subscription 13m shares raising $2.6m) to reopen the old Hill End goldfield in NSW. As part of the offer, 1 free option (exercisable at 25c before 30 June 2005) is to be issued for every 2 shares subscribed.
• HEG is very aware of the pitfalls that some of the later 1980 or so syndicates were trapped under, and hence intend to generate cashflow as soon as practically possible, aiming by Mid - 2003, should the IPO attain its minimum raising (and preferably closure) by the end of December 2002.
• HEG has an extensive line of strike of old workings (about 27km or so) on which to explore, so it has the potential to have a very long life. Although it is focusing on the old workings and the stope fill and unmined areas for its initial production, it has to be remembered that the veins are “open” at depth.
• It has to be recognised that this is a nuggetty distribution in which it is extremely difficult to determine expected grades before the plant has been in production for as long as a year or so, at the same time it also has to be noted that nuggetty distributions can produce spectacular results, as have occurred in the past.
• The grade of the stope fill is thought to be in the region of 4 to 6gpt, but could be much higher since extraction techniques were fairly archaic, as illustrated by Silver Orchid mining Golden Gully (which lies north of the Hill End township) and reputedly only achieving a 50% recovery treating 300t of 2oz/t ore using its stamp battery in 2000.