Zimplats Hit by $114M Loss After Board Resignation

Mining Giant Recovers Post-Compliance Mishap with ASX Regulations

by Ikeoluwa Ogungbangbe
Zimplats ASX compliance misstep

Zimplats Holdings Limited, one of Zimbabwe’s leading platinum group of metals miners, is grappling with a substantial loss amounting to US$114 million following a critical oversight in promptly filing the resignation of Air Zimbabwe (Pvt) Ltd chairperson Chipo Mtasa from its board. The failure to adhere to regulatory timelines resulted in the miner facing scrutiny from the Australian Stock Exchange (ASX), further exacerbating its financial woes.

Mtasa’s resignation, which occurred on January 8, 2024, was not officially announced by Zimplats until January 25, subsequently raising concerns from the ASX Compliance Committee. According to a letter dated January 29, 2024, from the ASX, Zimplats was required to file the resignation letter by January 15 to comply with listing rules. However, the delay in submission prompted ASX to demand an explanation from Zimplats, warning of potential delisting consequences.

In response to ASX’s inquiry, Zimplats acknowledged the oversight and attributed it to filing the resignation at the wrong office. Patricia Zvandasara, Zimplats’ chief financial officer, assured ASX of corrective measures, including enhanced notification procedures to prevent future lapses. Although Zimplats confirmed the resolution of the issue with ASX, its share price suffered a significant decline of 7.33% following the revelation. The miner’s market capitalization plummeted from AU$2.34 billion to AU$2.17 billion, translating to a staggering loss of AU$172.22 million or nearly US$114 million.

This financial setback comes at a challenging time for Zimplats, as it recently committed US$289 million to complete major projects aimed at ramping up production. Rising costs experienced during the quarter ended December 31, 2023, further compounded the miner’s financial strain. In response to the oversight, Zimplats has engaged the services of Clayton Utz, a reputable Australian law firm, to review and enhance its procedural compliance with ASX Listing Rule 3.19. With a commitment to providing tailored legal solutions, Clayton Utz aims to assist Zimplats in aligning its procedures with regulatory requirements effectively.

As Zimplats navigates through this turbulent period, stakeholders remain vigilant about the company’s efforts to mitigate losses and strengthen its compliance framework. With proactive measures in place, Zimplats endeavors to uphold its status as a key player in Zimbabwe’s mining sector while regaining investor confidence amidst market volatility.

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