11 Aug 2011 07:00
AQUARIUS PLATINUM LIMITED
PRELIMINARY FULL YEAR RESULTS TO 30 JUNE 2011
Key Points: Financial
- Revenue increased by 45% to $682.9 million (FY2010: $472.2 million)
- Mine operating net cash flow increased by 44% to $162.3 million (FY2010: $112.8 million)
- Mine EBITDA increased by 40% to $203.2 million (FY2010: $145.1 million)
- Headline Earnings (before exceptional charges) increased more than fivefold to $142.8 million (FY2010: $23.6 million)
- Headline EPS of 30.85 US cents per share
- Asset impairment of the Blue Ridge mine (non-cash) of $159.8 million following cessation of operations
- Reported net loss of $10.4 million (US (2.25) cents per share) as a result of Blue Ridge impairment
- Group cash balance at FY close of $328.1 million
- Final dividend of US 4 cents per share declared, taking full year dividend to US 8 cents per share (FY2010: US 6 cents)
Key Points: Operational
- Group attributable production increased by 15% to 487,404 PGM ounces for the full year
- US Dollar PGM prices increased materially, but this benefit more than offset in South Africa by a strengthening Rand-US Dollar exchange rate
- Weighted average on-mine unit cash costs in South Africa increased by 12% in Rand terms
- Mimosa on-mine unit cash costs up 14% as a result of challenging ground conditions and significant industry collective bargaining wage settlements for unionised employees
- Everest mine ramping up successfully
- Marikana open pit mined out and closed during the year
- Operations suspended at Blue Ridge mine and Marikana's 1 Shaft due to low Rand PGM prices
Key Points: Strategic
- Global industry best practice hangingwall support methodology implemented across South African mines following tragic Marikana multiple fatal accident in July 2010
- Acquired Afarak Platinum for $109.7m to facilitate potential mine life extensions at Kroondal and Marikana
- Agreed to acquire Booysendal South for approximately $180m to extend mine life and expand production at Everest
- Afarak and Booysendal South transactions to increase Aquarius PGM resources by approximately 50%
- Agreed to acquire a further 41.7% of Platinum Mile for approximately $17m, raising ownership in that asset to 91.7%
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said:
"On balance the 2011 financial year was an improved one for Aquarius, though reflective of the volatile times in which we live. Strengthening PGM prices and a briefly weaker Rand in the first half of the year were cause for the optimism I spoke about at the half year results and which proved to be premature. The better market conditions together with strong operational performances from our mines during that period set Aquarius up for a good full year result. January brought with it the usual holiday-season absenteeism, exacerbated by a material industry-wide increase in the number of Section 54 safety stoppages imposed by the government regulator in South Africa. Markets also began to falter. Together with some temporary operational challenges at our South African mines in the final months of the year, these factors impacted negatively on production and revenue in the second half. Aquarius was nonetheless able to materially increase PGM production and deliver an improved financial result this year. Everest was the source of much of this production growth, and its continued ramp up will provide further growth in the 2012 financial year. Mimosa also had yet another record production year, despite difficult ground conditions in parts of the mine.
Unit costs did increase during the year, but within expectations particularly given the inflationary mining environment, the ramp-up status of Everest and the oft-ignored effect of production volumes on our relatively large fixed cost base.
The year was overshadowed by the terrible accident at Marikana in July 2010, in the wake of which we have spared no effort or expense to improve hangingwall support in our mines. Safety is and will remain an absolute priority for Aquarius, at any cost.
On the corporate front, I am very pleased that we were able to consummate several transactions which will in time be transformational for the company. We have grown our resource base by approximately 50% during the year, and the Booysendal South transaction in particular ensures the future of the Everest mine and the Company for many years to come. The cessation of operations at Blue Ridge and its resulting impairment is unfortunate, but I strongly believe it was the right thing to do given the state of the PGM market. Aquarius now has flexibility in its capital allocation decisions and we are well-placed to weather and potentially benefit from the challenges that the new financial year will surely bring."
Financial results: Year to 30 June 2011
Aquarius' Headline Earnings increased to $142.8 million in FY 2011 (FY 2010: $23.6 million), a five-fold increase over FY 2010 supported by a 45% increase in revenue and a 15% increase in production over FY 2010 (pcp). Consolidated net results after tax (to IFRS) was a loss of $10.4 million (FY 2010: net profit $27.8 million) following impairment of the Ridge assets due to the Blue Ridge mine ceasing operations.
Operating results at mine level (Mine EBITDA) for the year of $203.2 million was 40% higher compared to FY2010 following an increase of 85,236 PGM ounces of production in the current year. The increased production, up 15%, was derived mainly from the restart of the Everest mine.
The Directors have declared a final dividend of US 4 cents per share (2010: 4 cents) payable on 30 September 2011 to shareholders registered on 9 September 2011, recognising the company's improved operational cash flow whilst being cognisant of the current economic circumstances. This brings the total dividend payable for the year ended 30 June 2011 to US 8 cents (2010: 6 cents).
Revenue (PGM sales, interest) for the year was $682.9 million, up 45% from $472.2 million in the pcp. The increased revenue was a result of increased production, up 85,236 PGM ounces and an 18% increase in the US Dollar PGM basket price achieved for South African operations and a 29% increase in the US Dollar price in Zimbabwe. Measured on a PGM ounce basis, group revenue increased by 20% to $1,395 per PGM ounce from $1,164 per PGM ounce in the pcp.
Group attributable mine production for the period was 487,404 PGM ounces. The Group's existing operations are expected to continue to increase production in FY2012 to between 545,000 and 560,000 PGM ounces after allowing for the temporary suspension of mining at the Blue Ridge operations. The increase is envisaged to come from the continued ramp up of Everest as it reaches steady state production, and from Marikana.
Total cost of production was $507.7 million, up 44% per PGM ounce in Dollar terms, due to increased production volumes in addition to being materially influenced by inflationary pressures and Rand strength. The Rand strengthened by 8% on average against the US Dollar.
Gross margins were stable with improved pricing providing relief from higher operating costs. Average unit cash costs for FY2011 (excluding Blue Ridge) were $932 per 4E ounce, up 18% compared to FY2010. The weighted average cash cost per PGM ounce at the South African operations increased by 12% to R6,910, equivalent to $982 per PGM ounce at the average Rand exchange rate for the year. The increase in US dollar terms was 21%, as a result of the strengthening in the value of the Rand during the year under review. In Zimbabwe the cash cost per PGM ounce was $695, a 14% increase. Increases in cash costs were driven by inflationary factors affecting inputs such as labour, electricity, steel and diesel. The ramp up of Everest and new support installation also had a negative effect, as did lower volumes at certain operations impacting on the high fixed cost base.
An impairment charge of $159.8 million against the carrying value of the Ridge assets has been recognised in the income statement netted off against a reversal of $10 million deferred tax. Based on a recoverable amount of the project of R1 billion (per independent valuation) the assets in Blue Ridge Platinum (BRP) have been impaired by R1.8 billion. 50% of this impairment is attributable to the Aquarius group and results in a group impairment charge on the project of $159.8 million. A tax credit of $10 million arises from the previously recognised deferred tax payable balance in BRP. Aquarius continues in discussions with its Blue Ridge partners, Imbani Platinum, and lenders to explore all alternatives with respect to the future direction and development of the Ridge assets, particularly the Blue Ridge mine. Aquarius, which stepped into a Rand Merchant Bank (RMB) loan to Blue Ridge (inclusive of all RMB's rights), is also a preferred creditor. The loans to BRP from Aquarius, DBSA and IDC are preferential and rank equally.
Exchange rate movements continued to have a volatile effect on earnings with a $66 million forex gain recorded in the first six months followed by a $6 million forex loss recorded in the second half of the financial year. The weakening US Dollar resulted in foreign exchange gains of $77 million on the revaluation of net monetary assets, partially offset by $18 million exchange losses on sales adjustments recorded at EBITDA level.
Amortisation and depreciation (D&A) at $61.5 million (FY 2010: $41.9 million) was higher in line with higher production for the year. D&A included $5.5 million of write-offs following closure of the Marikana open pit.
Corporate administration expenses of $10.7 million was lower compared to the pcp largely due to lower M&A and restructuring activity.
Finance costs for the year of $30.9 million included $13.9 million interest on convertible notes and bank borrowings, borrowing costs amortised of $1.0 million and a (non cash) charge of $16.0 million relating to the net present value adjustments to the Marikana and Kroondal rehabilitation provisions and accretion of the interest component of the convertible note debt.
Income tax expense comprises $18.1 million normal corporate tax, $14.0 million deferred tax and $3.6 million withholding tax.
Headline Earnings, Profit & Production Comparison by Half Year & Full Year (FY 2011 & 2010)
1st half 2nd half FY2011 FY2010 Movement FY 2011 FY 2011
Headline earnings $94.2M $48.6M $142.8M $23.6M $119.2M Net profit before $130.0M $55.2M $185.2M $58.4M $126.8M
impairment and
tax
Impairment - ($159.8M) ($159.8M) - ($159.8M) Net profit (loss) $94.3M ($104.7M) ($10.4M) $27.8M ($38.2M) after impairment
and tax Revenue $336.2M $346.7M $682.9M $472.2M $210.7M PGM ozs 246,925* 231,626* 478,551* 393,315* 85,236 production
(in operation*)
Average revenue $1,330 $1,465 $1,395 $1,201 $194
per PGM ounce
achieved
*excludes PGM ounces of Blue Ridge production capitalised.
Reconciliation of Net Loss to Headline Earnings ($m)
For graph see www.aquariusplatinum.com
Group Financials by Operation
Kroondal Marikana Everest Mimosa PMR RK1 Blue Ridge Corp. TotalPGM ounces 207,473 52,962 100,252 104,008 11,417 2,438 8,854 - 487,404(4E)(attributable)$MRevenue 268.0 71.0 143.2 170.3 14.3 2.6 13.5 682.9Cost of Sales (185.9) (63.5) (110.6) (74.2) (8.2) (2.7) (1.0) (446.2)- mining,processing &adminCost of Sales (24.2) (14.4) (8.9) (5.1) (0.3) (61.5)- depreciation& amortisationGross Profit 57.9 (6.9) 23.6 87.5 1.0 (0.4) 12.5 175.1Other Income 1.8 1.8Corporate (13.0) (13.0)administrationForeign (11.4) (2.9) (2.1) (0.9) 0.1 77.3 60.1exchangegain/(loss)Finance costs (30.9) (30.9)Settlement of (7.8) (7.8)contractordisputeProfit before 46.4 (9.8) 21.6 86.6 1.0 (0.4) 39.7 185.2impairmentImpairment (159.8) (159.8)lossesProfit before 46.4 (9.8) 21.6 86.6 1.0 (0.4) (159.8) 39.7 25.4income taxCash Balances
Net operating cash flows for the year generated by the group's mining operations increased 44% to $162 million in line with increased production and higher prices achieved compared to the pcp. Cash generated from operations were utilised for mine and development $140 million, cash portion of the purchase consideration for Afarak Platinum Limited of $70 million and dividends paid to shareholders of $37 million. Group cash balance at 30 June 2011 was $328.1 million representing a decrease of $53.6 million over the pcp.
Group Debt
Group interest bearing debt (excluding pipeline advances) at 30 June 2011 of $291 million comprised $247 million convertible notes, AQPSA equipment leases $16 million and $28 million bank loans at subsidiary level.
Ridge assets
As previously disclosed, Blue Ridge has been closed for redevelopment since August 2010. During the course of the execution of the redevelopment project, Ridge Mining determined that the mine could not be operated economically at current low Rand PGM prices and therefore recommended that it be placed on care and maintenance pending a full review of its economic viability. The Company stated in its Q3 2011 report that such a review was likely to be prompted by the persistent low Rand price environment.
Aquarius has assessed the carrying value of its investment in Ridge Mining to determine if an impairment charge be recognised if the accounting carrying value exceeds the recoverable amount of the asset. Various methods have been undertaken to determine the recoverable amount of BRP's assets. Accounting standards state that the recoverable amount is the higher of value in use (essentially a DCF calculation) and an arms-length sale value.
To determine the value of the mine, Aquarius has considered its own internal modelling using consensus and average macroeconomic assumptions as well as external modelling to determine the carrying value of the Ridge assets. On the basis of the above reports, management has concluded that the Ridge Mining assets should be written down by R1.8 billion (100% basis) to reflect a carrying value of R1 billion. Based on a recoverable amount of the project of R1 billion the assets in BRP have been impaired by R1.8 billion. 50% of this impairment is attributable to the Aquarius group and results in a group impairment charge on the project of $159.8 million. A tax credit of $10 million was recognised from the previously recognised deferred tax payable balance in BRP.
Rand-US Dollar Exchange Rate
The Rand strengthened significantly over the 2011 financial year, starting the year at R7.72 to the US Dollar and ending it at R6.80. This 12% increase in the value of the currency was largely driven by the uncertain global economic recovery which has proven increasingly fragile, and the developing debt crises in Europe and the US. These factors both bolstered the Rand as a commodity currency and made the returns available from the Rand carry trade more attractive, while also contributing to high intra-year volatility. The Rand averaged 7.01 to the US Dollar during the year, 8% stronger than the average of 7.59 recorded in the prior financial year. The Rand has continued to strengthen into the new financial year.
Financial Year 2011: Rand US Dollar Exchange Rate
For graph see www.aquariusplatinum.com
Platinum Group Metal Prices
Platinum group metals prices strengthened considerably in US Dollar terms over the period under review, primarily as a result of strong investment demand during the first eight months of the financial year for palladium and, to a lesser extent, platinum. The positive investor perception of fundamental PGM demand was driven by recovering automobile demand in the developed world, the implementation of emissions standards for heavy duty trucks and other diesel applications in Europe and the US, the increasing likelihood of auto emissions regulations in developing world nations and mining supply constraints in South Africa and Zimbabwe. Investors gained exposure to the PGMs largely through the physically-backed platinum exchange traded funds (ETFs), and flows into these ETFs supported prices by absorbing excess metal which would otherwise have represented a fundamental demand surplus. From April 2011, US Dollar PGM prices largely stagnated, after the Japanese earthquake and tsunami and other macroeconomic shocks such as the various sovereign debt crises threw the timing of a fundamental industrial deficit in PGM supply into doubt. Although volatility increased, PGM prices on average did not drop significantly in the final quarter of the year, as Chinese jewellery demand was stronger than expected despite the higher Dollar prices, and the safe-haven nature of gold and its ever-stronger price exerted some upward pressure on the other precious metals. Platinum rose 14% over the year to close at $1,722 per ounce and averaged $1,706 per ounce for the financial year, an 18% improvement over the prior year. Palladium rose 75% over the year and 76% on average, outperforming for a second year running due to expectations of auto catalysis in expanding markets for gasoline engines, as well as technological advances permitting some substitutability of palladium for platinum in diesel engines. The average rhodium price fell by 20% versus the prior year, lacking support from any material investment demand. Gold rose by 22% during the period.
Financial Year 2011: Platinum, Palladium, Rhodium and Gold Prices
For graph see www.aquariusplatinum.com
As a consequence of the stronger US Dollar PGM prices during the year, US Dollar 4E basket prices in both South Africa and Zimbabwe increased compared to the prior financial year. The basket price was 18% higher for the year across the South African operations at $1,450 per 4E ounce, however in Rand terms the basket price rose only 10% as a result of the stronger Rand-Dollar exchange rate. The US Dollar basket price in Zimbabwe increased by 29% on average compared to the previous year to $1,280 per 4E ounce.
Financial Year 2011: PGM Basket Prices (4E)
For graph see www.aquariusplatinum.com
Production
Total production from all operations in the 2011 financial year increased by 5% to 874,555 4E ounces. Production attributable to Aquarius and its shareholders increased by 15% to 487,406 4E ounces, largely as a result of the continuing ramp-up of Everest, which produced 100,252 4E ounces in the year under review compared to 8,496 the year before. The Everest ramp-up will continue in the 2012 financial year. Production increased slightly at Kroondal but fell at Marikana as a result of lost production following the tragic accident in July 2010 and the closure of uneconomic panels later in the year. All of the South African operations suffered excessive governmental safety stoppages during the second half of the year, as did the rest of the mining industry. Kroondal and Marikana also lost production in the final quarter as a result of timing issues relating to the manual installation of roof support. In Zimbabwe, Mimosa yielded yet another record performance, producing in excess of its nameplate capacity of 200,000 4E ounces. The chart below illustrates the annual production profile.
Aquarius Group Attributable Annual Production (4E PGM ounces)
For chart see www.aquariusplatinum.com
The tables below compare production by operation and attributable to Aquarius over the four quarters and year-on-year.
Production by Mine
PGMs (4E) Quarter Ended Full Year Ended Sep-10 Dec-10 Mar-11 Jun-11 FY 2010 FY2011Kroondal 110,575 119,444 95,731 89,196 408,570 414,946Marikana 27,756 32,831 23,927 21,411 135,418 105,925Everest 20,417 25,144 27,737 26,954 8,496 100,252Mimosa 54,133 47,023 51,255 55,605 199,625 208,016CTRP 1,470 1,451 1,270 685 6,399 4,876PlatinumMile 3,923 4,121 10,095 4,694 19,622 22,833
Blue Ridge* 8,092 - 6,671 2,944 58,608 17,707 Total 226,366 230,014 216,686 201,489 836,742 874,556 Production by Mine Attributable to Aquarius
PGMs Quarter Ended Full Year Ended Sep-10 Dec-10 Mar-11 Jun-11 FY 2010 FY2011Kroondal 55,287 59,722 47,866 44,598 204,286 207,473Marikana 13,878 16,415 11,963 10,705 67,710 52,962Everest 20,417 25,144 27,737 26,954 8,496 100,252Mimosa 27,067 23,512 25,628 27,803 99,812 104,008CTRP 735 725 635 343 3,200 2,438PlatinumMile 1,962 2,061 5,048 2,347 9,811 11,417
Blue Ridge* 4,046 - 3,336 1,472 29,304 8,854 Total 123,392 127,579 122,213 114,222 422,619 487,404 *Revenues and costs capitalised
FINANCIALS Aquarius Platinum Limited Consolidated Income Statement Year ended 30 June 2011 $'000 Note Half year ended Year ended 30/6/2011 31/12/2010 30/6/2011 30/6/2010 Blue Ridge 4,808 4,046 8,854 29,304Attributable Production (4E 231,625* 246,926* 478,551 393,315PGM Ounces) (excluding Blue Ridge production) Total production 236,433 250,972 487,405 422,645 Revenue (i) 346,707 336,152 682,859 472,220 Cost of Sales (including (ii) (266,401) (241,327) (507,728) (352,029) D&A) Gross profit/(loss) 80,306 94,825 175,131 120,191 Other income 1,476 288 1,764 1,588 Corporate Admin & other (iii) (4,925) (8,105) (13,030) (13,167) costs Finance costs (iv) (15,576) (15,369) (30,945) (25,750)Loss on early redemption of (v) - - - (20,835) convertible note Foreign exchange (vi) (6,134) 66,202 60,068 (4,846) gains/(losses) Settlement of contractor - (7,810) (7,810) - dispute
Impairment of assets (vii) (159,779) - (159,779) - Transaction and acquisition (viii) - - - 1,248 costs associated with Ridge
Mining
Profit/(loss) before tax (104,632) 130,031 25,399 58,429
Income tax expense (ix) (44) (35,751) (35,795) (30,656)
Net profit/(loss) (104,676) 94,280 (10,396) 27,773 Earnings per share (basic - (20.68) 20.43 (2.25) 6.09
cents)
Notes on the June 2011 Consolidated Income Statement
(i) Sales revenue increase reflects higher production and higher PGM basket price achieved.
(ii) Cash costs in South Africa in unit terms (excluding Blue Ridge) increased by 21% in US Dollar terms but by only 12% in Rand terms due to an 8% average increase in the value of the Rand compared to the US Dollar.
(iii) Corporate administration costs are lower due to decreased restructure and financing activity incurred during the year.
(iv) Finance costs comprised interest of $13.9 million on convertible notes and bank borrowings, $1.0 of borrowing costs amortised, $6.4 million of non-cash interest arising from the unwinding of the net present value of the rehabilitation provisions of AQPSA, and $9.6 million non-cash interest arising from the accretion of interest on the convertible note.
(v) Loss incurred on the early payout of the Rand convertible note inclusive of associated borrowing costs and the reversal of the fair value the derivative component of the Rand convertible note previously amortised against the life of the note.
(vi) Foreign exchange gain of $60 million include a $18 million loss on adjusting revenue recorded at time of production at Kroondal, Marikana and CTRP to realised receipts received at the end of the four month pipeline, a $47 million gain on the revaluation of group loans, $10 million gain on pipeline advances and a $21 million gain incurred on the revaluation of net monetary assets.
(vii) Reflects impairment charges for Ridge assets.
(viii) Reflects net impact of transaction and acquisition costs associated with the acquisition of Ridge Mining.
(ix) Income tax comprises $18.1 million normal corporate tax, $14.0 million deferred tax and $3.6 million withholding tax.
Aquarius Platinum Limited Consolidated Cash flow Statement Year ended 30 June 2011 $'000 Half year ended Financial year ended Note: 30/06/11 30/06/10 30/6/11 30/6/10Net operating cash flow (i) 115,250 76,316 162,311 112,780Net investing cash flow (ii) (150,520) (31,072) (209,908) (79,591)Net financing cash flow (iii) (7,711) (116,799) (33,527) 195,898
Net increase (decrease) in cash held (42,981) (71,555) (81,124) 229,087 Opening cash balance
368,459 464,576 381,734 153,600
Exchange rate movement on cash (iv) 2,605 (11,287) 27,473 (953) Closing cash balance
328,083 381,734 328,083 381,734
Notes on the June 2011 Consolidated Cash flow Statement
(i) Net operating cash flow includes net inflow from operations $184 million, income tax paid $24 million and other income of $2 million.
(ii) Net investing cash flow includes payments for mine development and development costs $140 million and the cash portion of the purchase consideration of Afarak Platinum $70 million.
(iii) Net financing cash flow includes: net proceeds of borrowing $17 million, settlement of contractor dispute $9 million and dividends paid of $37 million.
Exchange rate movement reflects movement of other currencies against the USDollar Aquarius Platinum Limited Consolidated Balance Sheet At 30 June 2011 $'000 Financial year ended Note: 30/6/11 30/6/10AssetsCash assets 328,083 381,734Current receivables (i) 108,395 96,846Other current assets (ii) 44,747 49,338Property, plant and equipment (iii) 325,763 272,117Mining assets (iv) 480,634 425,882Other non-current assets (v) 91,735 80,450Intangibles (vi) 77,989 72,833Total assets 1,457,346 1,379,200LiabilitiesCurrent liabilities (vii) 119,534 103,906Non-current payables (viii) 6,021 4,631Non-current interest-bearing liabilities (ix) 258,743 238,289Other non-current liabilities (x) 221,711 195,341Total Liabilities 606,009 542,167Net assets 851,337 837,033EquityIssued capital 23,509 23,154Reserves 711,182 664,041Retained earnings 116,646 164,102Total Equity 851,337 837,033
Notes on the June 2011 Consolidated Balance Sheet
(i) Reflects debtors receivable on PGM concentrate sales.
(ii) Reflects PGM concentrate inventory, consumables, stores and critical spares.
(iii) Represents fixed assets within the Group.
(iv) Includes group's mining assets at Kroondal, Marikana, Mimosa, Everest, Blue Ridge, CTRP and Platmile
(v) Includes recoverable portion of rehabilitation provision at P&SA sites of $14 million, cash contributed to Rehabilitation Trusts of $20 million, listed investments of $3 million and $28 million owed by the RBZ to Mimosa relating to the previous requirements to repatriate US Dollar proceeds on metals sales to the RBZ.
(vi) Included intangibles relating to goodwill and contract value acquired on acquisition of 50% equity interest in Platinum Mile Resources (Pty) Ltd.
(vii) Includes trade creditors $85 million and bank loans at subsidiary level (Blue Ridge) $28 million
(viii) Reflects P&SA partners' right of recovery of rehabilitation provisions.
(ix) Includes convertible notes of $247 million and AQPSA vehicle leases of $10 million.
(x) Reflects deferred tax liabilities of $152 million and provision for closure costs of $70 million.
OPERATING REVIEW
This section contains summarised operating reviews of each of the Company's operations. Full operating statistics are provided on page 22 of this report, and other updates relevant to all operations can be found under Corporate Matters on pages 20-21. In addition, further detail on each of the operations can be obtained from the quarterly and half-yearly reports released by the Company throughout the 2011 financial year which are available on the Company's website, www.aquariusplatinum.com.
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD ("AQPSA") (Aquarius Platinum - 100%)
P&SA 1 at Kroondal (Aquarius Platinum - 50%)
- 12-month rolling average DIIR deteriorated to 0.77 per 200,000 man hours from 0.57 the previous year
- Production was flat at 6.2m tonnes
- Volumes processed increased to 6.2m tonnes
- Head grade was stable at 2.59 g/t
- Recoveries improved by 1% to 80%
- PGM production increased by 2% to 414,946 PGM ounces
- Revenue increased by 7% to R3,738 million compared to the previous financial year due to slightly higher production and an improved average PGM basket price
- Mining cash costs increased by 9% to R417 per tonne, and costs per PGM ounce by 9% to R6,273
- Kroondal's cash margin for the period fell from 32% to 30%
Commentary
Safety, Health and Environment
Regrettably, one fatality occurred at Kroondal during the 2011 financial year. On 13 August 2010, Mr Vasco Macamo was fatally injured when he was caught between the LHD he was operating and another vehicle on surface at the start of the shift. Thereafter, Kroondal achieved 1 million fatality free shifts on 3 March 2011. The deterioration of the DIIR at Kroondal during the year was due largely to a fire incident at Kopaneng Shaft on 6 July 2010 and some slip-and-fall and materials handling incidents. The fire was commendably dealt with and resulted in no serious injuries, but it did nonetheless lead to an increase in the number of lost-time injuries reported in the first quarter and negatively impacted statistics for the year. Safety remains of paramount importance at Kroondal as at all operations, as evidenced by the implementation of industry-leading roof support methodologies throughout the mine's 4 shafts during the period under review.
Operations
Improved operating efficiencies and stable industrial relations compared to the previous year enabled Kroondal to increase production in the first half of the 2011 financial year, but these gains were largely negated during the second half. Absenteeism over the Christmas and Easter periods, a significant increase in `Section 54' safety stoppages by government inspectors (which affected the industry as a whole) and disruption to the timing of blasts because of manual installation of the new hangingwall support all impacted negatively on mining volumes in the final two quarters. Manual support installation was made necessary by the long lead times and delayed delivery of new drilling rigs for this purpose. Towards the end of the year the orientation of mining was also shifted to run obliquely to the natural fracturing in the rock, which reduced the available mining face length as new faces had to be established, and temporarily impacted head grade. Adjustments have now been made to accommodate these factors, and production levels are returning to normal. Management anticipates that Kroondal will produce approximately 420,000 PGM ounces on a 100% basis in the 2012 financial year.
Primary development increased by 51% over the period to a total of 14,375 metres, and stockpiles at the end of the financial year were approximately 14,000 tonnes. In the period under review the two year wage agreement reached with the National Union of Mineworkers (NUM) at the conclusion of the strike in 2009 remained in force. Wage negotiations for the 2012 financial year commenced shortly after the period end.
Operating Cash Costs
The 9% increase in unit Rand cash costs at Kroondal was due in part to the fixed cost base impacting on lower than optimal mining volumes, as well as the addition of costs associated with the new safety measures, and inflationary factors linked to electricity, labour and the international oil price. The Rand strengthened over the year on average, exacerbating this effect on US Dollar costs, which rose 17% on a per ounce basis.
P&SA2 at Marikana (Aquarius Platinum - 50%)
- 12-month rolling average DIIR improved to 0.48 per 200,000 man hours from 0.74 the previous year
- Production decreased by 13% to 1.9m tonnes, with an increase of 7% from underground operations as the open pit was ramped down and depleted during the year
- Volumes processed decreased to 2.0m tonnes
- Head grade decreased by 12% to 2.34 g/t
- Recoveries were stable at 72%
- PGM production decreased by 22% to 105,924 ounces
- Revenue decreased by 17% to R987 million compared to the previous financial year due principally to the reduction in PGM ounce production
- Mining cash costs increased by 5% to R455 per tonne, and costs per PGM ounce by 18% to R8,394
- Marikana's cash margin deteriorated from 19% to 10%
Commentary
Safety, Health and Environment
Five employees were tragically killed in a fall-of-ground incident at Marikana's 4 Shaft on 6 July 2010. Since this accident, further safety initiatives have been agreed with the Department of Mineral Resources and are currently being implemented at Marikana, together with changes in hangingwall support methodologies and mining direction. These additional safety measures have been independently audited and were found to be industry-leading globally. Comprehensive detail on this tragedy and the remedial actions taken is available in previous disclosures, including the 2010 Annual Report. Safety remains of paramount importance at Marikana, as borne out by the improvement in DIIR over the 2011 financial year. Management actions have been implemented to focus on improving the safety behaviour of employees and effective interaction from supervisors.
Operations
The decreased production of ore from the Marikana operations in FY2011 resulted from two weeks of lost underground production as a result of the Section 54 suspension notice relating to the tragic fall of ground accident, as well as the same absenteeism, indiscriminate `Section 54' safety stoppages by government inspectors and disruption relating to manual installation of the new hangingwall support that affected Kroondal. In addition, Marikana's 1 Shaft became uneconomical during the second quarter and was placed on care and maintenance. The Marikana open pit was finally mined out and closed during the final quarter of the year. The underground ramp-up continues to yield increased volumes of ore, but it has been slowed to some extent by the intersection of geological anomalies and factors relating to the new safety measures. The deterioration in the achieved plant head grade was also due to this higher incidence of potholes which led to increased off-reef mining due to difficulties in packing waste underground. As with Kroondal, these issues have largely been dealt with and production is improving in the new financial year. Management anticipates that Marikana will produce approximately 130,000 PGM ounces on a 100% basis in the 2012 financial year.
Primary development increased by 25% over the period to a total of 10,306 metres.
Operating Cash Costs
The 18% increase in unit Rand cash costs at Marikana occurred because of the same inflationary factors that impacted Kroondal, although the effect of lower volumes on the fixed cost base was more marked at Marikana, as were the additional costs associated with the new safety measures. The Rand strengthened over the year on average, exacerbating this effect on US Dollar costs, which rose 27% on a per ounce basis.
Everest Mine (Aquarius Platinum - 100%)
- 12 month rolling DIIR deteriorated to 0.41 per 200,000 man hours from 0.31 the previous year
- Production increased by 6 times to 1.3m tonnes, as the mine ramped up
- Volumes processed increased to 1.4m tonnes
- Head grade deteriorated from 3.09 g/t to 2.76 g/t
- Recoveries increased from 57% to 82%
- PGM production increased by 10 times to 100,252 PGM ounces
- Revenue increased by 12 times to R997 million compared to the previous year
- Mining cash costs increased by 8% to R557 per tonne, but costs per PGM ounce decreased by 16% to R7,677 due to improved recoveries and scale effects
- Everest's cash margin increased from (4%) to 23%
Commentary
Safety, Health and Environment
No fatalities occurred at Everest during the financial year under review, and very few lost-time injuries were reported. The DIIR deteriorated slightly compared to the previous year, but off a low base as Everest resumed operations only in the final two months of the 2010 financial year. As Everest ramps up, the same industry leading hangingwall support methodology used at Kroondal and Marikana will be implemented there, in keeping with the Aquarius commitment to safety.
Operations
Phase 2 of the re-establishment project was completed during the first half of the 2011 financial year, and recruitment and training of new crews for production was completed during the year, in line with the planned build up. The majority of employees recruited are former employees in line with the retrenchment agreement signed with the unions when operations were ceased following the subsidence event in December 2008. Access to the Everest mine workings was re-established and production restarted in May 2010, and the ramp-up of production progressed as planned for the first 8 months of the period under review, with grades and recoveries both improving steadily. In the final months of the year, however, mining was scheduled to take place on the shallower fringes of the Everest orebody, where an oxidised zone of approximately 50m in depth was anticipated. The actual oxidised layer was significantly deeper (approximately 75m), and the resulting friable rock and bad ground conditions negatively impacted mine production, head grade and consequently unit costs during this period. Good plant stability enabled Everest to continue to increase recoveries slightly, despite the oxidised material being treated. This oxidised material and associated bad ground conditions negatively impacted production in the final months of the year, and caused the mine to produce below plan. Adjustments have been made to the mining method in the area of oxidisation and production levels are returning to normal in the new year. Management anticipates that Everest will produce approximately 160,000 PGM ounces in the 2012 financial year.
Primary development totalled 5,037 metres. Stockpiles at the end of the financial year were approximately 3,000 tonnes.
Operating Cash Costs
Unit cash costs in Rand terms fell significantly compared to the prior year, as the ramp-up in production continued to reduce the impact of the mine's fixed cost base. This decreasing trend was interrupted in the final quarter of the year by poor ground conditions but is expected to resume in the new year as production continues to grow. US Dollar costs also fell, but by a lower margin because of increased Rand strength.
AQPSA Operating costs per ounce (R/oz)
6E net of 4E 6E by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu)Kroondal 6,273 5,127 4,985Marikana 8,394 6,889 6,657Everest 7,677 6,398 5,823AQPSA Capital expenditure
All stay-in-business capital expenditure for the AQPSA operations is up-to-date as per the mine plans for the specific operations. The ongoing construction of the K6 shaft at Kroondal is likely to require approximately R180 million of development capital expenditure in the 2012 financial year, and there is also R14 million of project capital remaining to be spent at Everest over the same period.
Kroondal Marikana Everest(R'000 unless otherwise stated) Total Per 4E oz Total Per 4E oz Total Per 4E ozOngoing Infrastructure Establishment 229,151 552 93,606 884 115,496 1,152Project Capital 119,449 288 30,754 290 82,122 819Mobile Equipment 45,788 110 23,382 221 69,473 693Total 394,387 950 147,742 1,395 267,090 2,664
RIDGE MINING LIMITED (Aquarius Platinum - 50%)
Blue Ridge Platinum Mine
- 12-month rolling average DIIR deteriorated slightly to 1.91 per 200,000 man hours from 1.86 the previous year
- Review and redevelopment project undertaken during the financial year
- Mine ceased operations during the fourth quarter
- 17,707 PGM ounces produced during the financial year
- All production and associated revenues and costs at Blue Ridge were capitalised
- Carrying value of the Blue Ridge mine written down by $159.8 million
Commentary
Safety, Health and Environment
Regrettably, one fatality occurred at Blue Ridge during the 2011 financial year. On 2 November 2010 Mr V.M Cossa was fatally injured in a blasting accident caused by a failure to follow ignition procedures. The mine design inherited from the previous owners of the Blue Ridge mine was deemed to be inherently unsafe by Blue Ridge management during the year, and as a result a safety review and mine redevelopment project was initiated during the year.
Operations
The decision to redevelop the Blue Ridge mine and install infrastructure was taken in September 2010, given the low Rand basket prices prevailing at the time and the inherited sub-optimal mine design. The implementation of the project commenced during the second quarter, and approximately 900 employees were redeployed, some to other operations, in a process that was concluded satisfactorily and with retrenchments limited to a bare minimum. During the course of the execution of the redevelopment project, however, Ridge Mining determined that the mine could not be operated economically at current low Rand PGM prices and therefore recommended that it be placed on care and maintenance pending a full review of its economic viability. Ridge Mining accordingly suspended the funding of the Blue Ridge mine pending a final decision by the Board of Blue Ridge to place the mine on care and maintenance. It is envisaged that Blue Ridge management will then conduct a comprehensive evaluation of the mine to explore alternative mine plans and determine whether the Blue Ridge ore body can be profitably exploited in a low Rand price environment. The Blue Ridge mine ceased mining operations and further mine development in the final quarter of the year. Discussions continue with the lenders to the mine on a suitable resolution to its debt situation. Aquarius is a significant creditor of the Blue Ridge mine and has extended no corporate guarantees to the other providers of third party debt to the mine.
Capital expenditure
R84 million of capital expenditure was invested at the Blue Ridge mine in the 2011 financial year on a 100% basis.
MIMOSA INVESTMENTS (Aquarius Platinum - 50%)
Mimosa Platinum Mine
- 12-month rolling average DIIR improved to 0.03 per 200,000 man hours from 0.07 the previous year
- Production increased by 13% to 2.4m tonnes
- Volumes processed increased by 1% to 2.3m tonnes
- Head grade improved by 1% to 3.63g/t
- Recoveries increased by 1% to 77%
- PGM production increased by 4% to 208,016 PGM ounces
- Revenue increased by 35% to $340 million due to increased production and a higher basket price
- Mining cash costs were stable at $53 per tonne, but costs per PGM ounce increased by 14% to $695
- Mimosa's cash margin for the period rose from 48% to 57%
Commentary
Safety, Health and Environment
Regrettably, one fatality occurred at Mimosa during the first quarter of the 2011 financial year, when Mr Innocent Ndlovu, an Acting Machine Operator, was fatally injured in an explosion when an operating rock drill intersected a socket containing misfired explosives as a result of a failure to observe established safety procedures. Management changes were made as a result of this accident, which ended a period of 2.7 million fatality-free shifts for Mimosa. Very few lost-time injuries were reported during the year, with a commensurate improvement in the DIIR.
Operations
After record production levels achieved in the first quarter of the 2011 financial year, challenging ground conditions were encountered across all areas of Mimosa in the second quarter, persisting for the remainder of the year. This lowered production in the second quarter, following which additional LHDs and drilling rigs were deployed across the mine in order to maintain production levels. This was successful in that Mimosa achieved record production during the year under review, although it placed pressure on mining costs.
Operating Cash Costs
Cost increases during the year were attributable to deteriorating ground conditions and the associated use of additional equipment. Sales-related costs such as royalties, commission and technical fees were also above budget, in line with higher sales revenue.
Operating cash costs per ounce ($/oz)
4E 6E 4E net of
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) by-products
(Ni, Cu & Co)Mimosa 695 658 185Capital expenditure
Capital expenditure at Mimosa for the 2011 financial year was $50 million ($240 per PGM ounce), spent largely on the completion of the housing project ($21.7 million), stay-in-business projects ($22.9 million) and the balance on business optimisation and growth projects.
Indigenisation and Economic Empowerment
As previously disclosed and in line with the requirements of General Notice number 114 of 2011, the Indigenization Plan for Mimosa was submitted on 9 May 2011. Discussions on this issue remain in progress in an effort to find a suitable way forward.
TAILINGS OPERATIONS
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum - 50%)
- Material processed decreased by 58% to 122,000 tonnes
- Head grade increased to 2.97 g/t
- Recoveries increased by 40% to 42%
- Production decreased by 24% to 4,876 PGM ounces
- Cash costs increased by 83% to R7,223 per PGM ounce due to lower volumes processed
- Revenue decreased by 30% to R35 million for the financial year
- The cash margin for the period was (1%), a decrease from 49% the previous year
Platinum Mile (Aquarius Platinum - 50%)
- Material processed decreased by 37% to 4.4m tonnes
- Head grade increased by 17% to 0.68 g/t
- Recoveries increased by 53% to 23%
- Production increased by 16% to 22,833 PGM ounces
- Cash costs decreased by 15% to R4,795 per PGM ounce due to improved grades and recoveries
- Revenue increased by 16% to R199 million for the financial year
- The cash margin for the period was 45%, an increase from 36% the previous year
CommentaryCTRP
Production fell and costs increased at CTRP as a direct result of lower throughput largely as a result of diminishing tailings supply from external providers. In the second half of the year dump material was secured as feedstock, necessitating a modification of the plant to accept this type of material. A scrubber was consequently installed and commissioning will be completed at the end of July 2011. Volumes and recoveries should improve in the new year following these modifications.
Platinum Mile
Production volumes and recoveries at PlatMile are highly sensitive to the grade of feed material treated at the plant. The improved average plant feed grade and better recoveries over the year resulted in higher production levels, despite a decline in feedstock volumes.
Operating cash costs per ounce (R/oz)
4E 6E 4E net of (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) by-products (Ni, Cu& Co)CTRP 7,223 5,099 4,990Platinum Mile 4,795 4,133 3,576CORPORATE MATTERSSafety Initiatives
On 6 July 2010, during the first week of the 2011 financial year, a multiple fatal accident tragically claimed the lives of five employees in a single fall-of-ground incident in 4 Shaft at Aquarius' Marikana Mine near Rustenburg in South Africa. The ensuing events have been set out in detail in a series of public announcements issued by the Company during July 2010, and summarised in full in ensuing releases and in the 2010 Annual Report. Following this accident, the Company retained the services of an external consultant to advise it on the best possible safety practices relating to hangingwall support and fall-of-ground prevention to employ in its underground mines. New codes of conduct were agreed and Aquarius is currently rolling these new measures out at its mines. Comprehensive detail on these new safety measures and support systems is available in previous disclosures. These measures have been independently audited and were found to be of a global industry standard.
Settlement of Moolman Mining Litigation
In August 2010, Aquarius announced that the Arbitration and Litigation which its subsidiary AQPSA instituted against Moolman Mining (a division of Grinaker LTA Limited) and the counter-claims made by Moolman Mining against AQPSA in 2006 relating to the Marikana mine had been finally settled by agreement between the parties. Pursuant to an agreement of settlement signed on 18 August 2010, AQPSA paid to Moolman Mining, in full and final settlement of all disputes and claims between AQPSA, Moolman Mining and the MD of Moolman Mining, Mr Brian Wilmot, an amount of R86.8 million (approximately $12 million). Moolman Mining had previously made counterclaims against AQPSA in an amount of R486.3 million (approximately $67 million), plus interest on all these counterclaims calculated at 15.5% per annum from December 2005 until the date of final payment. The settlement amount represents a payment for work actually done by Moolman Mining which work was not previously paid for by AQPSA, plus interest since December 2005 and certain legal costs, and ignores the remainder of Moolman Mining counterclaims. Further detail on this matter is available in the Company's announcement dated 19 August 2010.
Acquisition of Afarak Platinum (Pty) Ltd
Aquarius announced the acquisition of Afarak Platinum on 13 April 2011. Aquarius and Watervale (Pty) Ltd, a BEE entity in which Aquarius has a minority interest, together paid $109.7 million for Afarak Platinum, which owns 100% of the Hoedspruit PGM property near Rustenburg in South Africa, close to Aquarius' Kroondal and Marikana operations. Through this transaction, Aquarius also has the right to spend $15 million on exploration at the Kruidfontein PGM property in the northern part of the Western Limb, in order to earn a 50% stake in that property. The purchase price was settled by means of $70.2 million of cash and the remainder in Aquarius shares. This transaction has closed.
Acquisition of Booysendal South
Aquarius announced the acquisition of Booysendal South from Northam Platinum Limited on 4 May 2011. Aquarius will pay Northam R1,200 million (c.$180 million) in cash for the Booysendal South PGM property, which is contiguous with Aquarius' Everest mine and will be exploited using the existing Everest infrastructure. Aquarius plans to spend capital of approximately R850 million (c.$120 million) to integrate Booysendal South into its Everest operation, expanding production there by 25% by 2017 and increasing its mine life by approximately 30 years. This transaction is subject to a lengthy regulatory approvals process and is expected to close in the second half of 2012.
Acquisition of a further stake in Platinum Mile Resources (Pty) Ltd
Aquarius announced the acquisition of a further 41.7% stake in PlatMile from Mvelaphanda Holdings Limited and PlatMile management on 1 June 2011, bringing Aquarius' holding in PlatMile to 91.7%. Aquarius will pay the vendors R115.5 million (c.$17 million) partly in cash with an election to pay the majority in either cash or shares.
Aquarius will use PlatMile as an important part of an expanded tailings retreatment arm which could become an important source of low cost PGM ounces in an environment of increasing mining costs. This transaction is subject to certain conditions precedent, and is expected to close in the next quarter.
Blue Ridge mine ceases operations
As announced on 1 June 2011 and stated earlier in this report, the Blue Ridge mine ceased mining operations and further mine development during the quarter, largely as a result of the continuing low Rand PGM price environment. Discussions continue with the lenders to the mine on a suitable resolution to its debt situation. Aquarius is a significant creditor of the Blue Ridge mine and has extended no corporate guarantees to the other providers of third party debt to the mine.
Zimbabwean Indigenisation
During the year under review, the Minister of Youth, Indigenisation and Economic Empowerment of Zimbabwe published a statutory instrument in the Government Gazette, General Notice 114 of 2011 (the "Notice"), setting out the requirements for the implementation of the provisions of the Indigenisation and Economic Empowerment Act and its supporting regulations as they pertain to the mining sector. The Notice defines the minimum indigenisation and empowerment quota as "a controlling interest or 51% of the shares or interests which in terms of the Act is required to be held by indigenous Zimbabweans in the non-indigenous mining business concerned", and requires that disposals of the required indigenisation interests must be to defined "designated entities", which include the National Indigenisation and Economic Empowerment Fund, the Zimbabwe Mining Development Corporation or any company incorporated by that entity, a statutory sovereign wealth fund that may yet be created, or an employee share ownership scheme or trust.
As stated elsewhere in this report, the Mimosa mine submitted its Indigenization Plan on 9 May 2011, in line with the requirements of the Notice.
Appointments
Aquarius Platinum Limited: Jean Nel appointed as Commercial Executive
Aquarius appointed Jean Nel to the role of Commercial Executive during the year under review, to manage the group's commercial transactions. Jean qualified as a chartered accountant (CA(SA)) and is a CFA, with 12 years of mining corporate finance and commercial mining experience initially in Southern Africa. He was part of the advisory team that structured the Pool and Share Agreements for Kroondal and Marikana on behalf of Aquarius.
AQPSA: Wessel Phumo appointed as General Manager: Kroondal Mine
AQPSA appointed Wessel Phumo as General Manager of Kroondal Mine during the year, to replace Abraham van Ghent who was appointed as Senior General Manager: Operations at the end of the 2010 financial year. Wessel commenced his career as a learner official at Saaiplaas Gold Mine in January 1988 and held various positions in the Harmony Group until he joined AQPSA in May 2007. He was formerly General Manager: Marikana Mine.
More information on all the corporate matters can be found at www.aquariusplatinum.com
Aquarius Platinum LimitedIncorporated in Bermuda
Exempt company number 26290
Board of Directors
Nicholas 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) Kofi MornaDavid Dix Nicholas SibleyEdward HaslamRemuneration/Succession Planning CommitteeEdward Haslam (Chairman) Zwelakhe MankazanaDavid Dix Nicholas Sibley
Nomination Committee
The full Board comprises the Nomination Committee
Company SecretaryWilli BoehmInvestor Relations
Gavin Mackay Business Development & Communications Executive
AQPSA Management
Stuart Murray Executive Chairman
Anton Lubbe Managing Director
H©l¨ne Nolte Director: Finance
Mkhululi Duka Director: Human Capital
Abraham van Ghent Senior General Manager: Operations
Graham Ferreira General Manager: Group Admin & Company Secretary
Wessel Phumo General Manager: Kroondal
Jenkins Kroon Acting General Manager: Marikana
Augustine Simbanegavi General Manager: Everest
Anthony Joubert General Manager: Blue Ridge
Jan Hattingh General Manager: Engineering
Radesh Sukhdeo General Manager: Process & Environmental
Dave Starley General Manager: Projects
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 30 June 2011, the Company had in issue: 470,167,206 fully paid common shares and 265,372 unlisted options.
Substantial Shareholders 30 June 2011 Number of Shares Percentage Savannah Consortium
63,254,371 13.45
JP Morgan Nominees Australia Limited 43,452,853 9.24 HSBC Custody Nominees (Australia)
40,774,456 8.67
Limited
National Nominees Limited 33,487,706 7.12Main Listing: Australian Securities Trading Information Exchange (AQP.AX)Secondary London Stock Exchange ISIN number BMG0440M1284Listing: (AQP.L)Secondary JSE Limited (AQP.ZA) ADR ISIN number US03840M2089Listing: Convertible Bond ISIN number XS0470482067Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE)
Liberum Capital Limited Euroz Securities Rand Merchant Bank City Point, 1 Ropemaker Level 18 Alluvion (A division of Street, London, EC2Y 9HT 58 Mounts Bay Road, FirstRand Bank Telephone: +44 (0) 20 Perth WA 6000
Limited)3100 2000 Telephone: +61 (0) 8 1 Merchant Place 9488 1400 Cnr of Rivonia Rd andBank of America Merrill Fredman Drive, SandtonLynch 21462 King Edward St Johannesburg SouthLondon, EC1A 1HQ AfricaTelephone: +44 (0)207628 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, Australia
Postal Address: PO Box 485, South Perth, WA 6151, Australia
Telephone: +61 (0)8 9367 5211
Facsimile: +61 (0)8 9367 5233
Email: 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 or AQP 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 Chrome 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
DMR South African Government Department of Mineral Resources, formerly the DME
Dollar or $ United States Dollar
Everest Everest Platinum Mine
Great Dyke Reef A PGE bearing layer within the Great Dyke Complex in Zimbabwe
g/t Grams per tonne, measurement unit of grade (1g/t = 1 part per million)
JORC code Australasian code for reporting of Mineral Resources and Ore Reserves
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) (6E) Platinum group elements plus gold. Five metallic elements commonly 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) (4E) Platinum group metals plus gold. Aquarius reports the PGMs as comprising Pt+Pd+Rh plus Au (gold) with the Pt, Pd and Rh being the most economic platinoids in the UG2 Reef
PlatMile Platinum Mile Resources (Pty) Ltd
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 RandRidge Ridge Mining Limited
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
PINX