21 Jun 2012 07:41
Aquarius Platinum Limited(Incorporated in Bermuda)Registration Number: EC26290Share Code JSE: AQPISIN Code: BMG0440M1284EVEREST MINE
Aquarius Platinum Limited ("Aquarius" or the "Company") advises that it has placed its Everest mine on care and maintenance with effect from the close of business on 21 June 2012.
The ramp-up at Everest has encountered challenges resulting from poor ground conditions and on-going disruptive industrial relations over an extended period and these issues, coupled with the present low PGM price environment, have rendered the mine uneconomic. It has therefore been decided to place the mine on care and maintenance, pending better prices and improved industrial relations.
It is incumbent on the Board to monitor trading conditions and safeguard the business and assets of the Company. The Board is of the view that the platinum market is in an abiding surplus, with the industry generating nearly half a million ounces of unneeded platinum each year due to the current European economic crisis, among other factors. From an operating perspective, costs continue to rise at above the rate of domestic South African inflation, while labour productivity has declined. As a result PGM prices in both Rand and US Dollar terms are likely to remain stagnant for some time, and margins will remain under severe pressure across the industry.
Given the above, the Board of Aquarius has concluded that the only defensible strategy for any platinum producer is to cut all non-essential capital expenditure, and place all non-contributing assets on care and maintenance while optimising profitable operations for maximum contribution in the current low price environment.
In keeping with the policies of the Company, the business plan of the group is focused on cash conservation and the preservation of the Company's reserves and resources until economic circumstances merit their extraction. Aquarius expects that operating its remaining two mines and its two tailings operations will maximise short and medium term cash flows, while the three mines currently not producing will all be maintained in a state to enable their rapid ramp up when PGM prices rise sufficiently to generate an economic return once again, and labour relations are stabilised. No other mine closures are envisaged within the Company.
Further updates will be released as appropriate.
For further information please contact:
In the United KingdomGavin Mackay+44 7909 547 042In Australia: In South Africa: Willi Boehm Stuart Murray +61 8 9367 5211 +27 (0) 11 656 1140 21 June 2012Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
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