29 Apr 2010 08:21
AQUARIUS PLATINUM LIMITED
Aquarius Platinum:
Third Quarter 2010 - Financial and Production Results to 31 March 2010
Highlights
Net profit for the quarter was $23.2 million, up 257% from $6.5 million in the same quarter last year
Mine EBITDA increased by 110% to $46 million
Attributable production flat compared to Q3 2009 - increased if Blue Ridge included
Average PGM Dollar prices improved - platinum up 12%, rhodium up 17% and palladium up 27%
Everest Mine restart on schedule and within budget - mining commenced with reef already being stockpiled ahead of concentrator start up
New tailings dams secured as feed material for CTRP
Blue Ridge Mine workforce moved to MRC managed contract model as used at Kroondal and Marikana, ramp-up continues
Q3 Operating Results Summary Kroondal Marikana Everest Blue Mimosa CTRP Platinum Ridge Mile 4E PGM Production Total (100% basis) 103,071 35,147 - 15,339 49,008 1,268 2,737 Attributable 51,536 17,574 - 7,669 24,504 634 1,369 4E Basket Price R/oz 9,984 9,987 - 9,867 n/a 10,945 9,810 $/oz 1,328 1,328 - 1,313 1,074 1,456 1,308 Cash Costs (4E basis) R/oz 5,905 7,142 - 8,302 n/a 4,478 8,236 $/oz 785 950 - 1,105 663 596 1,098 Cash Margin 38% 27% - 15% 49% 55% 32% Stay-in-Business Capex R/oz 416 607 - n/a n/a - 486 $/oz 55 81 - n/a 100 - 65
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said:
"The third quarter of the 2010 financial year was characterised by improving markets, rising Dollar PGM prices and a relatively stable Rand, which together contributed to improving cash margins at our operations. Production levels were down on the previous quarter, as is typical for most companies with mining operations in South Africa in the first calendar quarter of the year. The traditional effect of the Christmas and New Year holiday period resulted in fewer shifts in the quarter under review at all operations, and the commensurately lower production was exacerbated to some degree by teething problems at Blue Ridge and reduced availability of feed material at our tailings retreatment operations. Both of these issues are being resolved.
The continuing slow recovery in the developed world automotive industry is expected to continue, underpinning PGM prices in the final quarter of the financial year, a period which is likely to see operational and production metrics in line with the second quarter."
Production by mine Quarter ended PGMs (4E) Jun 2009 Sep 2009 Dec 2009 March 2010 Kroondal 105,720 88,808 108,254 103,071 Marikana 37,753 31,223 37,160 35,147 Mimosa 46,874 50,828 50,079 49,008 CTRP 1,689 1,740 2,087 1,268 Platinum Mile 4,479 5,932 8,539 2,737 Blue Ridge - 14,469 18,598 15,338 Total 196,515 193,001 224,717 206,586
Production by mine attributable to Aquarius
Quarter ended PGMs (4E) Jun 2009 Sep 2009 Dec 2009 March 2010 Kroondal 52,860 44,404 54,127 51,536 Marikana 18,877 15,611 18,580 17,574 Mimosa 23,437 25,414 25,039 24,504 CTRP 845 870 1,044 634 Platinum Mile 2,240 2,966 4,270 1,369 Blue Ridge - 7,235 9,299 7,669 Total 98,259 96,500 112,359 103,286
Aquarius Group attributable production (PGM ounces) - 12 months to 31 March 2010
[Please refer to www.aquariusplatinum.com for graph]
Metals prices
The US Dollar prices for platinum and palladium strengthened materially in January 2010 in response to investor interest in the new Exchange Traded Funds (ETFs) physically backed by those metals which were listed in early January in the US and Switzerland. ETF volumes rose sharply during the first part of the quarter, helping to drive prices, before levelling off for the remainder of the period.
Towards the end of the quarter investment demand was replaced to some degree by increasing fundamental demand from industry. Auto companies have begun re-stocking in response to slowly improving consumer sentiment in the US, EU and Japan and increased demand for imported luxury vehicles in China. This has driven the prices of not only platinum and palladium, but also notably that of rhodium, a key indicator of auto manufacturing activity.
Platinum jewellery demand from China remained robust in the face of increasing US Dollar prices, with platinum volumes on the Shanghai Gold Exchange increasing in March following a seasonally weaker February and Chinese New Year. PGM prices continue to reflect improving fundamental market demand, with prices rising across all PGM metals during the third quarter and into April 2010.
Palladium and rhodium recorded the largest average price increases, at 27% and 17% respectively. Platinum also performed strongly, rising 12%. The average platinum price for the quarter was $1,561 per ounce, reaching a high of $1,645 on the last day of the period. Palladium averaged $441 per ounce for the quarter and also ended the period on a high of $479. Rhodium rose to a quarterly average of $2,565 per ounce, finishing the quarter at $2,600.
PGM prices by individual metal - 12 months to 31 March 2010
[Please refer to www.aquariusplatinum.com for graph]
Rand-Dollar exchange rate
There was little material movement in the Rand-Dollar exchange rate during the third quarter. The Rand remained strong, weakening only briefly during February before firming against the weak US Dollar once again. The Rand averaged R7.52 to the US Dollar during the quarter, a depreciation of 1% compared to the average in the prior period. The Rand ended the quarter under review at R7.34 to the US Dollar, broadly the same level as that in December.
PGM basket prices strengthened at all operations in both currencies. The US Dollar weighted average group basket price increased by 16% to $1,267 per 4E PGM ounce compared to the previous quarter, while the weighted average basket price at the South African operations was $1,327 per PGM ounce. The South African basket price is equivalent to R9,981 per PGM ounce at the average exchange rate for the period, a 16% increase over the second quarter.
Rand-Dollar exchange rate - 12 months to 31 March 2010
[Please refer to www.aquariusplatinum.com for graph]
Average PGM basket prices achieved at Aquarius operations: US$ per 4E PGM ounce
Basket prices (Quarter ended) Jun 2009 Sep 2009 Dec 2009 March 2010 Kroondal 915 972 1,163 1,328 Marikana 928 999 1,173 1,328 Mimosa 751 805 910 1,074 CTRP 993 1,074 1,266 1,456 Platinum Mile 930 1,004 1,192 1,308 Blue Ridge - 967 1,138 1,313 Aquarius Group average 879 931 1,094 1,267
PGM basket prices (Dollar and Rand per 4E PGM ounce) - 12 months to 31 March 2010
[Please refer to www.aquariusplatinum.com for graph]
Financials
Aquarius has recorded a significant financial improvement on the previous corresponding period (pcp), increasing its profit after tax to $23.3 million, (up from a $6.5 million profit) for the quarter ended 31 March 2010 (the "Result").
This improvement was evident in the 110% increase in mine EBITDA to $46 million. The improved result was despite comparatively flat production and reflects improved and less volatile PGM prices.
Revenue for the quarter (PGM sales and interest income) was up 64% from $78.5 million in the pcp to $128.8 million. Measured on a PGM ounce basis, this represents an increase from $808 per PGM ounce in the pcp to $1,347 per PGM ounce. The stability and recovery in PGM prices has seen an end to the abnormally high sales adjustments experienced in the 2009 financial year.
Table A: Aquarius attributable production and net profit summary by quarter
Quarter Quarter Quarter Quarter Quarter ended ended ended ended ended Mar '09 June'09 Sep '09 Dec '09 Mar '10 4PGE production (oz) from 97,212 98,259 89,265 103,060 95,612 operating mines Blue Ridge (4PGE oz) - - 7,235 9,299 7,669 Total 4PGE production 97,212 98,259 96,500 112,359 103,286 Revenue $66.7m $80.6m $77.6m $106.9m $116.5m
PGM sales adjustments - realised $11.8m $12.3m $8.2m $13.4m $12.3m & Unrealised
Total revenue $78.5m $92.9m $85.8m $120.3m $128.8m Net profit/loss before tax and $5.5m $26.4m $17.9m $24.2m $26.2m exceptionals Fair value movement in - $3.8m ($3.4m) - derivative liability Early redemption of Rand ($20.8m) - convertible notes
"One - off" costs relating to - - ($3.2m) - - the Ridge acquisition
Income tax $1.0m ($12.4m) ($1.8m) ($15.6m) ($3.0m)
Net Profit/(Loss) after tax & $6.5m $17.8m $9.5m ($5.7m) $23.2m outside equity Interests
Production for the quarter was a credible 103,286 PGM ounces (including 7,669 PGM ounces from the Blue Ridge mine that was acquired from Ridge Mining in July 2009), given the lower number of shifts worked in the quarter due to the Christmas holiday break.
Unit costs increased during the quarter in line with inflationary pressures, increased electricity charges and lower production. Higher PGM prices (up 16%) were able to mitigate these cost increases with gross margins at Kroondal, Marikana and Mimosa all higher for the quarter.
Platinum Mile unit costs have been revised to include the plant feed supplier compensation fee, previously accounted for as a corporate fee. Platinum Mile's unit costs increased 65% due to a 68% decrease in production as a result of lower volumes processed and lower grade feedstock. Platinum Mile's cost structure is essentially fixed in nature and therefore reacts materially to production.
CTRP's unit costs increased 56% as a result of a 39% drop in production in the quarter. Lower production was due to a lower head grade and also lower recoveries from material that was more coarse-grained and oxidised. Costs are expected to normalise once production improves.
Unit costs at Mimosa increased by 16% as a result of several equipment failures involving conveyors and ventilation which have since been rectified, together with some areas of bad ground which had to be mined around. 1.4 kilometres of conveyor belt was replaced and expensed during the quarter. Lower mining volumes and the use of stockpiled ore also had a negative effect on costs.
Operating costs at Blue Ridge will continue to be capitalised during the ramp-up phase.
Administration costs of $2.9 million included $0.6 million of costs associated with M&A activity.
Finance charges of $8.4 million for the quarter were lower as a result of the repayment of the bridge facility of $177 million in May 2009. Included in finance charges was interest expense of $4.3 million on group debt, and a non-cash component comprising interest accretion on the convertible note of $2.3 million and unwinding of the rehabilitation provision of $1.3 million. Depreciation and amortisation were in line at $10.5 million.
Cash
Group cash balances decreased by $83.2 million since December 2009 following the repayment of $101 million in January 2010 to holders of Rand convertible notes.
Net operating cash flow for the quarter comprised $118.4 million from sales, $79.6 million paid to suppliers and net finance expenses of $0.4 million. Material cash flow items (other than mine operations) that affected cash balances during the quarter included capital expenditure of $14 million AQPSA operations, Mimosa operations and the Blue Ridge mine.
Group cash at 31 March 2010 was held as follows:
AQP $294 million AQPSA $ 48 million ACS(SA) $ 4 million Mimosa $ 11 million Platmile $ 2 million Ridge Mining $ 22 million Total $381 million Aquarius Platinum Limited Consolidated Income Statement Quarter ended 31 March 2010 $'000 Quarter Nine Financial Ended Months Year Ended Ended 31/03/10 31/03/10* 30/06/09 Note * Aquarius PGM Production 103,286* 208,859 455,675 (attributable ounces) * Revenue (i) 128,792 334,881 310,556
Cost of sales (including D&A) (ii) (89,589) (251,969) (334,327)
Gross profit/(loss) 39,203 82,912 (23,771) Other income 122 632 1,815
Admin & other operating costs (iii) (2,859) (11,127) (9,919)
Foreign exchange gain/(loss) (iv) (2,104) 13,982 (20,328)
Finance costs (v) (8,403) (19,047) (35,968) Loss on early redemption of - (20,836) - convertible note Fair value movement in derivative - - 3,829 liability Impairment reversals/(losses) 279 785 (13,050) Transaction and acquisition costs - 246 - associated with Ridge Mining Profit/(loss) before tax 26,238 47,547 (97,392) Income tax benefit/(expense) (3,004) (20,442) 15,808 Profit/(loss) after tax 23,234 27,105 (81,584) Minority interest - - (35,842) Net profit/(loss) 23,234 27,105 (45,742) EPS (basic - cents per share) 5.02 5.86 (13.30) *Unaudited
** PGM production of 103,286 includes 7,669 PGM ounces from Blue Ridge - operating costs and revenue currently capitalised.
Notes on the March 2010 Consolidated Income Statement
Revenue for the quarter was higher despite lower production due to higher PGM prices, up 16% in both Dollar and Rand terms.
Cost of sales per PGM ounce increased as a result of inflationary pressures and lower production.
Administration and other costs of $2.8 million included $0.6 million of costs associated with M&A activity.
Foreign exchange losses largely attributable to positive revaluation adjustments on intergroup debt
Finance costs included interest expensed of $4.3 million on group debt, non-cash interest accretion on the convertible note of $2.3 million and unwinding of the rehabilitation provision of $1.3 million.
Aquarius Platinum Limited Consolidated Cash flow Statement Quarter ended 31 March 2010 $'000 Nine Quarter Ended Months Financial Year Ended Ended Note: 31/03/10* 31/03/10 30/06/09 * Net operating cash inflow (i) 39,265 56,920 13,219 Net investing cash outflow (ii) (14,269) (44,150) (74,593) Net financing cash inflow/(outflow) (iii) (105,776) 207,096 38,754 Net increase (decrease) in cash held (80,780) 219,866 (22,620) Opening cash balance 464,576 153,600 170,956 Exchange rate movement on cash (2,467) 7,863 5,264 Closing cash balance 381,329 381,329 153,600 * Unaudited
Notes on the March 2010 Consolidated Cash flow Statement
Net operating cash flow for the March quarter includes $118.4 million inflow from sales, $79.6 million paid to suppliers and net finance income of $0.3 million.
Includes development and plant and equipment expenditure on AQPSA, Mimosa and capex and opex capitalised on Blue Ridge.
Includes repayment of RMB convertible note of $101m.
Aquarius Platinum Limited Consolidated Balance Sheet At 31 March 2010 $'000 Quarter Financial Year Ended Ended 31/03/10 30/06/09 Note: $'000 $'000 Assets Cash assets 381,329 153,600 Current receivables (i) 165,551 119,866 Other current assets (ii) 44,438 43,652 Property, plant and equipment (iii) 274,238 230,057 Mining assets (iv) 425,321 270,374 Intangibles (v) 76,318 74,167 Other non-current assets (vi) 27,703 25,287 Total assets 1,394,898 917,003 Liabilities Current liabilities (vii) 75,372 81,514 Non-current payables (viii) 10,831 1,555
Non-current interest-bearing liabilities (ix) 257,846 70,034
Other non-current liabilities (x) 196,524 155,730 Total liabilities 540,573 308,833 Net assets 854,325 608,170 Equity Parent entity interest 854,325 608,170 Total equity 854,325 608,170 * Unaudited
Notes on the March 2010 Consolidated Balance Sheet
Reflects debtors receivable on PGM concentrate sales
Reflects PGM concentrate inventory, reef stockpiles and consumables stores
Represents plant and equipment within the Group
Mining assets reflects Kroondal, Marikana, Mimosa, Everest and Ridge mining (mining rights)
Platinum Mile Resources acquisition
Includes recoverable portion of rehabilitation provision from P&SA partner ($12.2 million), investment in rehabilitation trust ($12.6 million) and investments in unlisted entities ($2.8 million)
Includes trade creditor and other payables
Includes rehabilitation obligations on P&SA1 and P&SA2 structures
Includes convertible note liability ($234.1 million) and Ridge group loans ($23.5 million)
Reflects deferred tax liabilities $123.9 million, provision for closure costs $72.6 million
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 100%)
P&SA 1 at Kroondal
Safety
The 12-month rolling average disabling injury incidence rate (DIIR per 200,000 hours) improved to 0.54 from 0.63 in the previous quarter
During the quarter, Kroondal achieved 15 months without a fatal accident
Mining
Production tonnes for the quarter decreased by 16% to 1,475,750 tonnes
Head grade deteriorated slightly from 2.57 g/t to 2.56 g/t
Processing
Tonnes processed decreased by 6% to 1,580,045 tonnes
Recoveries increased by 1% to 79%
PGM production decreased by 5% to 103,071 4E PGM ounces (51,536 4E PGM ounces
attributable)
P&SA1 at Kroondal PGM production and Rand cash costs per PGM ounce (100%) [Please refer to www.aquariusplatinum.com for graph]
Revenue
Revenue for the quarter increased by 8% to R979 million (R490 million attributable) due to a higher Rand basket price and positive PGM sales adjustments (PGM sales are accounted for in the month of delivery to the refineries and adjusted for actual prices at the conclusion of the three-month refining pipeline).
The Kroondal US Dollar-denominated basket price improved by 14% compared to the previous quarter to an average of $1,328 per PGM ounce. The slight depreciation of the Rand on average resulted in Kroondal's Rand-denominated basket improving by 15% compared to the previous quarter Pricing stability contributed to positive PGM sales adjustments, which decreased to R93 million in Q3 2010 from R116 million in Q2 2010.
Operations
Mining operations had a typically slow start-up after the Christmas break. As a result there were only 65 mining shifts in Q3 versus 75 in Q2, but despite this the on-reef stoping square metres mined increased by 0.4% and primary development (currently at 3,203 metres) increased by 34% during the quarter. Overall tonnes hoisted decreased by 16% to 1,475,750tonnes for the quarter.
Lower mining volumes were partially offset by the use of ore from the stockpile. Overall volumes processed decreased by 6% to 1,580,045 tonnes with stockpiles at the end of the quarter totalling 25,426 tonnes.
Off-reef mining decreased from 5.3% of the on-reef square meters mined to 1.1% as fewer unforeseen geological structures were encountered. Recoveries marginally increased from 78% to 79% as a result of a more stable metallurgical operating regime.
PGM production decreased by 5% to 103,071 4E PGM ounces (51,535 4E PGM ounces attributable).
Kroondal: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Mar 2010 60,580 30,729 11,228 534 103,071 51,535 Dec 2009 63,772 32,153 11,808 521 108,254 54,127 Sep 2009 52,287 26,366 9,708 447 88,808 44,404 Jun 2009 62,535 31,158 11,492 535 105,720 52,860 Operating cash costs
Cash costs increased by 12% to R386 per tonne, whilst costs per PGM ounce increased by 11% to R5,905. Despite absolute operating costs reducing from R604 million to R580 million for the quarter, unit costs nonetheless increased as a result of lower volumes and the consumption of 105,000 tons from the stockpile at a cost of R29 million. The increased PGM basket price improved Kroondal's cash margin for the period slightly from 37% to 38%, despite these cost pressures.
Kroondal: Operating cash costs per ounce
4E 6E 6E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu) Kroondal 5,905 4,825 4,700 Capital expenditure
Capital expenditure for the quarter was R43 million (R416 per PGM ounce). This was all stay-in-business capital, primarily related to the establishment of underground infrastructure. All critical capital expenditure is up to date.
P&SA2 at Marikana
Safety
The 12-month rolling average DIIR for the quarter improved to 0.74 per 200,000 hours worked from 1.08 in the previous quarter
Marikana has achieved 14 months without a fatal accident
Mining
Production tonnes decreased by 16% to 527,817 tonnes, comprising 393,934 tonnes from underground and 133,883 tonnes from open-pit operations
Head grade decreased by 6% to 2.57 g/t
Processing
Tonnes processed decreased by 6% to 561,740 tonnes
Recoveries increased by 7% to 76%
PGM production decreased by 5% to 35,147 4E PGM ounces (17,574 4E PGM ounces attributable)
P&SA2 at Marikana PGM production and Rand cash costs per PGM ounce (100%)
[Please refer to www.aquariusplatinum.com for graph]
Revenue
Revenue at Marikana increased by 6% to R344 million (R172 million attributable) largely due to a stronger basket price.
The Marikana US Dollar-denominated basket price averaged $1,328 per PGM ounce, 13% higher than the previous quarter. The slight depreciation of the Rand resulted in the Marikana Rand-denominated basket improving by 14% over the same period. Pricing stability also continued to contribute to positive PGM sales adjustments, which decreased to R38 million in Q3 2010 from R42 million in Q2 2010.
Operations
The Marikana Mine was also negatively affected by the Christmas break and as a result had only 64 production shifts in this quarter, 8% fewer than the 69 shifts in Q2. Because of this, underground production decreased by 10% compared to the previous quarter, to 393,934 tonnes. The ratio of mining from underground to opencast increased from 68% to 73%, as the production build-up at 4 Shaft continues and the opencast mine approaches the end of its life.
The M5 decline has intercepted reef and all further sinking will now be done on reef, but the development to 4 Shaft is currently off reef as it negotiates a fault. Opencast production was negatively affected by a three-week strike suffered by MCC, the open pit contractor at Marikana, while the National Union of Mineworkers were negotiating for access rights at several mines across the Bushveldt.
Processed tonnes mirrored the mining tonnes with total volumes processed at 561,740 tonnes, 6% lower than in the previous quarter.
The head grade decreased by 6% to 2.57g/t, as development activities at 5 Shaft contributed to an increase in off-reef mining.
Recoveries were 7% higher at 76%, benefitting from the change in mining mix and a focus on operating regime stability.
PGM production for the quarter decreased by 5% to 35,147 4E PGM ounces (17,574 4E PGM ounces attributable).
Marikana: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Mar 2010 21,007 10,236 3,698 206 35,147 17,574 Dec 2009 22,838 10,470 3,642 209 37,160 18,580 Sep 2009 19,515 8,407 3,100 200 31,222 15,611 Jun 2009 23,155 10,368 4,010 220 37,753 18,877 Operating cash costs
Cash costs increased by 4% to R448 per tonne, while costs per PGM ounce increased by 3% to R7,142 as a result of lower ounce production.
Gross revenue increased by 6% to R344 million as a result of the stronger basket price, resulting in a cash margin of 27%.
Marikana: Operating cash costs per ounce
4E 6E 6E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu) Marikana 7,142 5,876 5,723 Capital expenditure
Stay-in-business capital expenditure totalled R21 million (R607 per PGM ounce), an increase of 17%. This is expected to be a temporary increase occasioned by lower production volumes and the move from opencast to underground mining, and consisted primarily of underground infrastructure establishment. All critical capital expenditure is up to date.
Contractor dispute with Moolman Mining
As disclosed in the previous Aquarius Platinum quarterly update, this dispute has been referred to the courts and provisional dates in September 2010 have been allocated for the trial.
Everest MineSafety
The safety performance at Everest remains positive, although the first lost time injury (LTI) since November 2008 was recorded during the quarter. The 12 month rolling DIIR for the period was 0.28.
Operations
Phase 2 of the re-establishment project is progressing well. It includes the establishment of permanent underground services, the reclamation of infrastructure, the equipping of declines and strike sections and the re-establishment of stoping sections. The majority of the permanent infrastructure is now more than 60% complete.
All decline shafts in the North and South were completed during this quarter except for the chairlift decline, which will be completed in the fourth quarter. The conveyor belt system has been commissioned up to the 3rd strike section underground. Construction of permanent surface infrastructure such as mine services, roads and overland conveyors is in progress and proceeding as per plan.
Mining commenced during the quarter with reef being stockpiled ahead of the concentration plant start-up. The progress of project execution remains on track for Everest to be in a position to resume milling operations in the first quarter of the 2011 financial year.
Construction of the chromite spiral plant commenced at the beginning of the quarter, with the project now more than 70% complete. The majority of the civil and mechanical installations are complete, with commissioning of the spiral plant planned to coincide with the start of milling operations at Everest.
[Please refer to www.aquariusplatinum.com for pictures]
Temporary Underground Open pit Mining along the collapsed decline Ore outcrop. Capital Expenditure
As previously announced, the total re-establishment project capital (both Phase 1 and Phase 2) to put Everest in a position to resume operations amounts to R259 million. Project expenditure for the quarter is well within budget at R57 million, bringing the total project expenditure to date to R109 million.
MIMOSA INVESTMENTS (Aquarius Platinum - 50%)
Mimosa Platinum MineSafety
The 12-month rolling average DIIR for the period improved to 0.09 from 0.14 in the previous quarter
Zero lost-time injury was recorded during the quarter under review
Mining
Underground production decreased by 8% to 486,804 tonnes
Head grade increased marginally to 3.60g/t
Processing
Concentrator plant recoveries increased to 76.1% from 75.5%
Total mine production was reduced to 49,008 4E PGM ounces (24,504 4E PGM ounces attributable)
The surface stockpile decreased to a total of 75,985 tonnes at the end of the quarter
Mimosa Mine PGM production and Dollar cash cost per PGM ounce (100%)
[Please refer to www.aquariusplatinum.com for graph]
Revenue
The average achieved PGM basket price for the quarter increased by 18% to $1,074 per PGM ounce, while the average achieved nickel price decreased by 2% to $8.07 per pound. Revenue for the quarter increased to $70 million, with base metals accounting for approximately 23% of revenue. An $8 million positive price adjustment is included in revenue for the quarter.
The cash margin increased to 49% from 45% in the previous quarter, mainly due to the firming of metal prices and positive price adjustments.
Operations
Mimosa mining operations hoisted 486,804 tonnes of ore in the current period compared to 528,687 tonnes in the previous quarter, as a result of a since resolved equipment breakdown and some areas of bad ground. Volumes milled and processed totalled 556,870 tonnes, with 70,066 tonnes being taken from the stockpile. As a result the surface stockpile totalled 75,985 tonnes at the quarter end.
The average plant head grade increased slightly to 3.60g/t, and recoveries increased to 76.1% from 75.5% in the previous quarter.
As a result of these factors, PGM production decreased by 2% to 49,008 4E PGM ounces (24,504 4E PGM ounces attributable) during the quarter, with base metals production declining by a similar margin.
Mimosa: PGMs in concentrate produced (ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Mar 2010 24,898 18,744 1,972 3,394 49,008 24,504 Dec 2009 25,388 19,237 2,012 3.442 50,079 25,039 Sep 2009 25,691 19,569 2,096 3,473 50,829 25,414 Jun 2009 23,910 17,979 1,851 3,135 46,875 23,437
Mimosa: Base metals in concentrate produced (tons)
Mine production Attributable to Aquarius Quarter ended Ni Cu Co Ni Cu Co Mar 2010 685 561 19 343 281 10 Dec 2009 695 574 19 348 287 10 Sep 2009 705 572 19 353 286 10 Jun 2009 667 534 18 334 267 9 Operating cash costs
During the quarter, cash costs increased by 16% to $58 per ROM tonne, and costs per PGM ounce increased by 15% to $663. This was largely as a result of several equipment failures involving conveyors and ventilation which have since been rectified, together with some areas of bad ground which had to be mined around. Lower mining volumes and the use of stockpiled ore also had a negative effect on costs.
The gross cash margin increased to 49% from 45% in the previous quarter mainly due to rising PGM basket prices. Net of by-products, cash costs were $333 per PGM ounce, compared with $261 per PGM ounce in the previous quarter, primarily due to the increase in operating cash costs.
Mimosa operating cash costs per ounce
4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu & Co) Mimosa 663 629 333
Update on foreign currency regime in Zimbabwe
Since the introduction of the use of multi currencies in the economy in January 2009, there has not been any significant change in the foreign currency environment. The US Dollar and the South African Rand remain the most widely used currencies in the economy. The 2010 Fiscal Budget announced in December 2009 did not make any changes to the foreign currency environment, but as of 1 January 2010 the corporate tax rate was increased from 15% to 25%, and royalties on precious metals were increased from 3% to 3.5% of revenue.
Update on the Indigenisation Bill
Following the signing into law of the Indigenisation Bill, companies were required to submit to the Zimbabwean Ministry of Youth Development, Indigenisation and Economic Empowerment their indigenisation plans and proposals by 15 April 2010. Mimosa has complied with this requirement.
RIDGE MINING PLC (Aquarius Platinum - 50%)
Blue Ridge Platinum Mine
Safety
The 12-month rolling average DIIR for the quarter deteriorated to 1.43 from 1.09 in Q2
9 LTIs were reported, a reduction compared to the 18 reported for the previous quarter
The improvement in reported LTIs is attributable to increased training and awareness following the fatality in December together with intensified supervision and a zero tolerance approach towards safety, driven from the top down
Mining
Production from underground operations fell by 39% to 135,621 tonnes
Head grade deteriorated to 2.24 g/t
Stockpiles at the end of the quarter totalled approximately 11,000 tonnes
Processing
Tonnes processed decreased by 11% to 297,826 tonnes
Recoveries fell from 74% to 72%
PGM production decreased by 18% to 15,338 4E PGM ounces (7,669 4E PGM ounces attributable)
Revenue
Revenue for the quarter decreased by 7% to R150 million (R75 million attributable) due principally to the 18% decrease in PGM production. The mine basket price achieved at Blue Ridge for the quarter improved by 15% to an average of $1,313 per PGM ounce.
Operations
Continued improvements were made on the underground mining processes and the concentrator plant process at the Blue Ridge mine.
During the quarter it was decided that the same "Managed Contract Model" using Murray and Roberts Cementation (MRC) employed at the Kroondal and Marikana Mines would be adopted at Blue Ridge. A work stoppage occurred during this transition period as a disagreement emerged between employees and the unions in relation to leave payments. Accumulated leave was subsequently paid to all employees. All employees were transferred to MRC on the 1st of April according to the process set out in section 197 of the Labour Relations Act.
Several factors negatively influenced the development and underground production performance during the quarter, in addition to this unprotected industrial action on 17 March 2010. The most significant of these was the slow return of mine workers following the Christmas and New Year holiday break, with excessively high absenteeism among drill rig operators and rock drill operators. In addition to this, six days were lost when the DMR issued a Section 54 notice following a systems audit.
As a result, both development and underground mining deteriorated compared to the previous quarter. 1,513m of primary development was achieved for the quarter compared to 2,502m achieved in the previous quarter, while underground mining for the quarter fell from the 220,716 tonnes achieved in the previous quarter to 135,621 tonnes.
The concentrator plant availability decreased quarter on quarter, mainly due to liner failure in the primary mill. The liners in the primary mill were installed in December 2009, and the first liner failure was detected after only two weeks of operation. The risk was managed until the end of the quarter, at which point the manufacturer of the liners was able to complete the manufacture of a full set of replacement liners and install them under guarantee.
Processed volumes of 297,826 tonnes were lower than those in the previous quarter. Process instability in the float section of the plant together with low grade material from the stockpiles resulted in lower than planned recoveries. DRA (a metallurgical consultancy) has been contracted to conduct a de-bottlenecking exercise and a project to optimise the plant and to upgrade the SCADA and PLC controls to an automated system. The project will be completed in the fourth quarter. Stability and process control resulted in recoveries that remained at 72%.
The head grade averaged 2.24g/t for the quarter, a deterioration against the previous quarter.
Total PGM production was 15,338 4E PGM ounces (7,669 4E PGM ounces attributable to Aquarius).
Blue Ridge: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs Attributable to ended (4E) Aquarius Mar 2010 9,237 4,499 1,452 150 15,338 7,669 Dec 2009 11,201 5,454 1,762 181 18,598 9,299 011111 Sep 2009 8,598 4,383 1,347 141 14,469 7,235 Jun 2009 - - - - - - Operating cash costs
Total operating expenditure during the quarter amounted to R127 million, a 20% decrease on the previous quarter. Operating expenditure continued to be capitalised during the ramp-up phase but a modest on-mine operating cash margin (before finance costs) of R23 million was achieved. The resultant capitalisation of cost and revenue to the project (including finance costs) amounted to R8 million for the quarter.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD
Chromite Tailings Retreatment Plant (CTRP) (ACS(SA) - 50%)
Safety
The DIIR remained at zero for the quarter
Resource development
During the quarter Aquarius was able to finalise the right to process significant additional chrome tailings dams
Processing
Material processed increased by 4% to 75,873 tonnes
Grade decreased by 12% to 2.06g/t
Recoveries decreased by 33% to 25%
Production decreased by 39% to 1,268 4E PGM ounces (634 4E PGM ounces attributable)
CTRP PGM production and Rand cash costs per PGM ounce (100%)
[Please refer to www.aquariusplatinum.com for graph]
Revenue
The achieved mine basket price for the quarter averaged $1,456 per PGM ounce, 15% higher than the previous period.
Operations
Material processed increased to 75,873 tonnes for the quarter, at a lower head grade of 2.06g/t. Recoveries also decreased to 25% from 33% in the last quarter. The lower grades and recoveries where driven by the treatment of the last remaining areas of the Kroondal Chrome Mine Tailings dam. This material is coarse grained and more oxidised, which resulted in the lower recoveries. The net result was a 39% drop in the production of 4E ounces to 1,268 PGM ounces (634 PGM ounces attributable). The recently secured alternative sources of feed material to the CTRP plant are expected to greatly improve plant stability in feed rates, recoveries and production of 4E ounces (see below).
Resource development
During the quarter Aquarius was able to finalise the rights to process additional chrome tailings dams in the following areas:
Rustenburg Chrome Mining Holdings - 3 tailings dams (the Bayer Dumps)
Xstrata South Arica (Pty) Ltd - 2 tailings dams, (the Purity and Cashan dumps, in the Kroondal area)
These 5 tailings dams will secure feed to the CTRP plant for an estimated 5 to 7 years, and provide redundancy and flexibility in material supply.
CTRP: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs (4E) Attributableto Aquarius
Mar 2010 777 279 210 3 1,268 634 Dec 2009 1,267 464 353 4 2,087 1,044 Sep 2009 1,048 381 308 3 1,740 870 Jun 2009 1,024 369 292 4 1,689 845
Operating costs
Cash costs increased by 56% to R4,478 per PGM ounce primarily as a result of the 39% drop in ounces produced.
The cash margin for the period was 55%, a decrease from 66% in the previous quarter.
CTRP Operating cash costs per ounce
4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu& Co) CTRP 4,478 3,094 3,016
Platinum Mile Resources (ACS (SA) - 50%)
Safety
The DIIR was zero for the quarter
Processing
Tailings processed totalled 1,849 million tonnes.
PGM grade was 0.51g/t, a decrease of 9% on the previous quarter
Production was 2,737 4E PGM ounces (1,369 4E PGM ounces attributable)
Platinum Mile PGM production and Rand cash costs per PGM ounce (100%)
[Please refer to www.aquariusplatinum.com for graph]
Revenue
Revenue decreased to R33 million (R17 million attributable), despite the achieved mine basket price for the quarter averaging $1,308 per PGM ounce, 10% higher than the previous quarter.
Operations
Production levels decreased by 68% during the quarter as a result of lower volumes processed, falling head grade and significantly reduced recoveries. 6% less tonnes were treated, while the head grade of the tailings processed decreasing to 0.51g/t from 0.56g/t in the previous quarter. Recoveries are highly sensitive to grade and volume, and as a result decreased to 9% compared to 24% in the previous quarter.
As a result, production fell to 2,737 4E PGM ounces (1,369 4E PGM ounces).
Options to improve metal output from Platinum Mile are being explored with the feed supplier.
Platinum Mile: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs (4E) Attributable to Aquarius Mar 2010 1,601 835 243 58 2,737 1,369 Dec 2009 4,953 2,647 769 170 8,539 4,269 Sep 2009 3,440 1,839 534 119 5,932 2,966 Jun 2009 2,598 1,388 403 90 4,479 2,239 Operating costs
Platinum Mile unit costs have been revised to include the supplier compensation fee which is payable out of the profits generated by Platinum Mile and which was previously accounted for as a corporate fee. Platinum Mile's unit costs increased 65% due to a 68% decrease in production as a result of lower grades and volumes processed. Platinum Mile's cost structure is essentially fixed in nature and therefore reacts materially to production.
Cash costs were R8,236 per PGM ounce under the new calculation methodology (see Statistics sheet at the end of this document).
Platinum Mile operating cash costs per ounce
4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu& Co) Platinum Mile 8,236 7,099 nm Capital expenditure
Capital expenditure to sustain operations amounted to R1.3 million.
CORPORATE MATTERS
Resignation of Managing Director: Aquarius Platinum (South Africa) (Proprietary) Limited
The Company regrets to announce the resignation of Mr Hugo H¶ll as Managing Director of Aquarius Platinum (South Africa) (Proprietary) Limited. Mr H¶llhas decided to leave Aquarius for personal reasons, and the Company wishes to thank him for his significant contribution to the Aquarius group over the past 8 years and wish him well in his future endeavours.
Mr H¶ll will remain in his current position until the end of the current financial year in order to effect an orderly handover of his responsibilities. A search for his successor has commenced both internally and externally and a further announcement in this regard will be made in due course.
More information on all corporate matters can be found at www.aquariusplatinum.com
Statistical Information: Kroondal P&SA1
[Please refer to www.aquariusplatinum.com for statistical table]
Statistical Information: Marikana P&SA2
[Please refer to www.aquariusplatinum.com for statistical table]
Statistical Information: Mimosa
[Please refer to www.aquariusplatinum.com for statistical table]
Statistical Information: Blue Ridge
[Please refer to www.aquariusplatinum.com for statistical table]
Statistical Information: Chrome Tailings Retreatment Plant
[Please refer to www.aquariusplatinum.com for statistical table]
Statistical Information: Platinum Mile
[Please refer to www.aquariusplatinum.com for statistical table]
Aquarius Platinum LimitedIncorporated in BermudaExempt company number 26290Board of DirectorsNicholas Sibley Non-executive Chairman Stuart Murray Chief Executive Officer David Dix Non-executive Tim Freshwater Non-executive Edward Haslam Non-executive
Sir William Purves Non-executive (Senior Independent Director)
Kofi Morna Non-executive Zwelakhe Mankazana Non-executive Audit/Risk CommitteeSir William Purves (Chairman)David DixEdward HaslamNicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)David DixZwelakhe MankazanaNicholas SibleyNomination Committee
The full Board comprises the Nomination Committee
Company SecretaryWilli BoehmInvestor Relations
Gavin Mackay Business Development & Communications Executive
AQPSA ManagementStuart Murray Executive Chairman Hugo H¶ll Managing Director H©l¨ne Nolte Director: Finance Hulme Scholes Commercial Director Anton Lubbe Operations Director: West Anton Wheeler Operations Director: East Graham Ferreira General Manager: Group Admin & Company Secretary Mkhululi Duka General Manager: Group Human Resources & Transformation Abraham van Ghent General Manager: Kroondal Wessel Phumo General Manager: Marikana Gabriel de Wet General Manager: Engineering Augustine Simbanegavi General Manager: Everest Anthony Joubert General Manager: Blue Ridge ACS (SA) Management
Paul Smith Director: New Business
Mimosa Mine Management
Winston Chitando Managing Director Herbert Mashanyare Technical Director Peter Chimboza Resident Director Fungai Makoni General Manager Finance & Company Secretary
Platinum Mile Management
Richard Atkinson Managing Director
Paul Swart Financial Director Issued Capital
At 31 March 2010, the Company had in issue: 462,755,572 fully paid common shares and 1,017,930 unlisted options.
Substantial Shareholders 31 March 2010 Number of Shares Percentage
Savannah Consortium 68,658,728 14.84
HSBC Custody Nominees (Australia) Limited 34,394,034 7.43
JP Morgan Nominees Australia Limited 31,803,201 6.87 Trading InformationISIN number BMG0440M1284ADR ISIN number US03840M2089Convertible Bond ISIN number XS0470482067Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE) Liberum Capital Limited City Point, 1 Ropemaker Street, London, EC2Y 9HT Euroz Securities Rand Merchant Bank Telephone: +44 (0) 20 3100 Level 14, The (A division of FirstRand 2000 Quadrant Bank Limited) 1 William Street, 1 Merchant Place Bank of America Merrill Perth WA 6000 Cnr of Rivonia Rd and Lynch Telephone: +61 Fredman Drive, Sandton 2146 2 King Edward St (0) 8 9488 1400 Johannesburg South Africa London, EC1A 1HQ Telephone: +44 (0)20 7628 1000
Aquarius Platinum (South Africa) (Proprietary) Ltd
100% Owned(Incorporated in the Republic of South Africa)
Registration Number 2000/000341/07
1st Floor, Building 5, Harrowdene Office Park, Western Service Road, Woodmead 2191, South Africa Postal Address: PO Box 76575, Wendywood, 2144, South Africa.
Telephone: +27 (0)11 656 1140Facsimile: +27 (0)11 802 0990
Aquarius Platinum Corporate Services Pty Ltd
100% Owned
(Incorporated in Australia)
ACN 094 425 555
Level 4, Suite 5, South Shore Centre, 85 The Esplanade, South Perth, WA 6151,AustraliaPostal Address: PO Box 485, South Perth, WA 6151, AustraliaTelephone: +61 (0)8 9367 5211Facsimile: +61 (0)8 9367 5233Email: info@aquariusplatinum.com
For further information please visit www.aquariusplatinum.com or contact:
In AustraliaWilli Boehm+61 (0) 8 9367 5211
In the United Kingdom and South Africa
Gavin Mackay
gavin.mackay@aquariusplatinum.com
+ 44 7909 547 042GlossaryA$ Australian Dollar Aquarius Aquarius Platinum Limited APS Aquarius Platinum Corporate Services Pty Ltd AQPSA Aquarius Platinum (South Africa) (Pty) Ltd ACS(SA) Aquarius Platinum (SA) Corporate Services (Pty) Ltd BEE Black Economic Empowerment BRPM Blue Ridge Platinum Mine CTRP Chromite Ore Tailings Retreatment Operation. Consortium comprising Aquarius Platinum (SA) (Corporate Services) (Pty) Limited (ASACS), Ivanhoe Nickel and Platinum Limited and Sylvania South Africa (Pty) Ltd (SLVSA). DIFR Disabling injury frequency rate - being the number of lost-time injuries expressed as a rate per 1,000,000 man-hours worked DIIR Disabling injury incidence rate - being the number of lost-time injuries expressed as a rate per 200,000 man-hours worked DME formerly South African Government Department of Minerals and Energy Affairs DMR South African Government Department of Mineral Resources and Energy, formerly the DME Dollar United States Dollar or $ Everest Everest Platinum Mine Great A PGE bearing layer within the Great Dyke Complex in Zimbabwe Dyke Reef g/t Grams per tonne, measurement unit of grade (1g/t = 1 part per million) JORC Australasian code for reporting of Mineral Resources and Ore Reserves code JSE JSE Limited Kroondal Kroondal Platinum Mine or P&SA1 at Kroondal LHD Load haul dump machine Marikana Marikana Platinum Mine or P&SA2 at Marikana Mimosa Mimosa Mining Company (Private) Limited nm Not measured PGE(s) Platinum group elements plus gold. Five metallic elements commonly (6E) found together which constitute the platinoids (excluding Os (osmium)). These are Pt (platinum), Pd (palladium), Rh (rhodium), Ru (ruthenium), Ir (iridium) plus Au (gold) PGM(s) Platinum group metals plus gold. Aquarius reports the PGMs as (4E) comprising Pt+Pd+Rh plus Au (gold) with the Pt, Pd and Rh being the most economic platinoids in the UG2 Reef P&SA1 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Kroondal P&SA2 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Marikana R South African Rand Ridge Ridge Mining plc ROM Run of mine. The ore from mining which is fed to the concentrator plant. This is usually a mixture of UG2 ore and waste. Tonne 1 Metric tonne (1,000kg)
UG2 Reef A PGE-bearing chromite layer within the Critical Zone of the Bushveld
Complex
Z$ Zimbabwe Dollar
vendor