30 Oct 2012 07:00
First Quarter 2013 Financial and Production Results
Aquarius Platinum Limited
Financial and Production Results to 30 September 2012
Highlights
Operating mines report EBITDA of $7.6 million following closure of non-profitable mines
Attributable production from operating mines increased by 8% quarter-on-quarter to 77,799 4E ounces despite industrial unrest
Net loss after tax of $19.6 million following "one off" closure and transition cost of $14.6 million
Average PGM basket price down 4% for the quarter - strengthening towards the end of the quarter.
The Rand weakened against the US Dollar by 3% on average quarter-on-quarter, weakening further in the first half of October
Transition to owner operator is on track (approximately 80% complete) and below budget
Rollout of revised hanging wall system on track and on budget
CTRP placed on care and maintenance due to poor quality material and marginalPGM prices Q1 2013 Operating Results Summary Kroondal Mimosa CTRP Platinum Mile 4E PGM Production Total (100% basis) 92,073 56,341 644 3,270 Attributable 46,036 28,171 322 3,270 4E Basket Price R/oz 9,895 - 11,039 10,519 $/oz 1,195 1,148 1,338 1,272 Cash Costs (4E basis) R/oz 9,006 - 9,658 5,734 $/oz 1,088 831 1,170 693 Cash Margin (%) 2 20 (16) 35 Stay-in-Business-Capex R/oz 1,189 - - - $/oz 144 323.70 - - Commenting on the results, Jean Nel, Interim COO of Aquarius Platinum said:"TheSouth African industrial relations environment in the PGM mining sector hasbeen especially testing, in fact more so than ever, in recent months. Wegratefully acknowledge the significant assistance received from the Departmentof Mineral Resources, the Chamber of Mines, the South African Police Services,as well as local government and communities. Hand-in-hand with this has beenthe changeover to owner operation at Kroondal, an integral part of which hasbeen engagement with our workforce and management focus on ensuring a safeworking environment while motivating efficiencies.The progress made to date stands us in good stead to complete the transition toowner mining and to further increase production at the Kroondal mine. This willcoincide with the completion of the roll-out of the new hanging wall supportsystem, which will enable a return to full daily mining cycle. We will thenbegin to explore additional initiatives to further optimise the Kroondaloperation.
It is gratifying that all operating entities are now EBITDA positive and in line with our philosophy of not funding unproductive operations, the decision was taken to place CTRP on care and maintenance in the current economic environment.
In terms of future guidance, we have made some tough decisions in recent months and will soon have completed all the improvement initiatives currently underway. This should stand us in good stead and leave us well placed and poised to respond to positive shifts in the sector.
In conclusion, I would like to extend my thanks to Stuart Murray, who in 11 years as CEO of Aquarius, put his own inimitable stamp on the Company. On behalf of my fellow directors and the management of Aquarius, I thank him for his enormous contribution to the company and wish him well in his future endeavours."
Production by mine Quarter ended PGMs (4E) Sept 2012 June 2012 % Change Sept 2011 % Change Kroondal 92,073 82,212 12 88,908 4 Marikana - 21,533 (100) 25,992 (100) Everest - 15,281 (100) 23,074 (100) Mimosa 56,341 54,588 3 53,798 5 CTRP 644 1,732 (63) 661 (3) Platinum Mile 3,270 2,831 16 3,087 6 Total 152,328 178,177 (15) 195,520 (22)
Production by mine attributable to Aquarius
Quarter ended PGMs (4E) Sept 2012 June 2012 % Change Sept 2011 % Change Kroondal 46,036 41,106 12 44,454 4 Marikana - 10,767 (100) 12,996 (100) Everest - 15,281 (100) 23,074 (100) Mimosa 28,171 27,294 3 26,899 5 CTRP 322 866 (63) 331 (3) Platinum Mile 3,270 2,831 16 2,074 58 Total 77,799 98,145 (21) 109,828 (29)
Aquarius Group quarterly attributable production (PGM ounces) to 30 September 2012
[See www.aquariusplatinum.com for graph]
Market Summary
The price of the PGM basket recovered strongly in the second part of thequarter triggered by supply disruptions at South African platinum mines fromillegal strike action. Market sentiment for the PGM basket in dollar terms hasimproved because of deteriorating supply expectations, a consequence of theongoing and severe labour disruptions in SA which have led to risingexpectations of shaft closures, project deferrals and increased costs. This hasresulted in a lack of confidence and expectations of decreased profitability.It is difficult to judge with any degree of reliability by how much supply islikely to have declined in these unpredictable circumstances, especially giventhe possibly ameliorating effects of recent Rand weakness. On the demand side,the persistent economic malaise in Europe and China has been offset somewhat bymore promising signs of demand recovery in the US and increased investorinterest in ETFs. Industry analysts appear to be adjusting their expectationsof an oversupply towards a balanced market outlook in the medium term with
adeficit expected thereafter. In Dollar terms, quarter-on-quarter, the average platinum price increased by0.1%, while the average palladium and rhodium prices decreased by 2% and 11%respectively. The gold price rallied by 3% on average. Platinum closed thequarter up 14% at $1,665 per ounce, while palladium rose by 11% to $640 perounce and rhodium fell by 12% to $1,100 per ounce over the same period. Goldrose 11% to $1,771 per ounce.
Rand-Dollar exchange rate
The average Rand-Dollar exchange rate weakened during the quarter, falling by 3% from R8.05 to R8.28 to the US dollar. Since then, it has continued weakening throughout October to average 8.61 in the first two weeks of October.
The average Rand basket price was relatively flat for the quarter, increasingby 1% quarter-on-quarter, and the spot price by 2% over the period. The USDollar weighted average group basket price decreased by 4% to $1,182 per 4E PGMounce compared to the previous quarter due to Rand weakness. The average SouthAfrican basket price at AQPSA's operations was R9,843 per PGM ounce for theperiod. Subsequent to the end of the quarter, the PGM basket price strengthenedyet further to average R11,200 per PGM ounce for the first two weeks ofOctober.
12-month individual PGM prices to September 2012
(US$/oz
[See www.aquariusplatinum.com for graph]
12-month PGM basket prices to September 2012
(US$ and ZAR per PGM basket ounce)
[See www.aquariusplatinum.com for graph]
12-month Rand-Dollar exchange rate to September 2012
(ZAR/US$)
[See www.aquariusplatinum.com for graph]
Average PGM basket prices achieved at Aquarius operations
Quarter ended US$ per PGM ounce (4E) Sept 2012 June 2012 % Change Sept 2011 % Change Kroondal 1,195 1,218 (2) 1,480 (19) Marikana - 1,240 - 1,488 - Everest - 1,219 - 1,460 - Mimosa 1,148 1,239 (7) 1,374 (16) CTRP 1,338 1,240 8 1,535 (13) Platinum Mile 1,272 1,159 10 1,438 (12) Weighted Avg. 1,182 1,225 (4) 1,450 (18) Financials Direct comparisons with prior periods are not possible given the mine closuresannounced in the previous quarter. Quarter-on-quarter comparisons will be basedon operating mines to allow for meaningful comparisons to be made. Aquarius recorded an on-mine EBITDA profit of $7.6 million at its operatingmines for the quarter ended 30 September 2012. This represents an increase inEBITDA of $10.7 million compared to the previous quarter ended June 2012 forthese operating mines. The increased result was due to an 8% increase inproduction from its operating mines, namely Kroondal and Mimosa. As previously advised, Aquarius placed both Everest and Marikana on care andmaintenance just prior to year-end. This decision was due to the current lowPGM price environment and the sustained labour disruptions experienced atEverest. In addition to this, Aquarius also commenced the transition from amining contractor model to an owner-operator model at Kroondal. The transitionto owner operator is presently on track and below budget with implementationexpected to be completed by mid-December 2012. During the quarter under review,$14.6 million in "one off mine closure and contractor transition costs" wereexpensed and $10.5 million of inventory and equipment was acquired from thecontractor as part of the transition to owner operation. A further $8.5 million- $9 million is expected to be expensed in the next quarter at which stage thetransition to owner operated mines will be completed.
As a result of the "one-off costs" of $14.6 million expensed, the financial result for the quarter was a net loss after tax of $19.6 million.
EBITDA, Profit and Production Comparison quarter on quarter:
Quarter ended PGMs (4E) Sept 2012 June 2012 Movement EBITDA Operating mines $8.4M $12.9M ($4.5M) Non-operating mines ($0.8M) ($16.1M) $15.3M TOTAL EBITDA $7.6M ($3.2M) $10.8M Revenue $87.4M $108.6M ($21.2M) Closure and transition costs ($14.6M) -
($14.6M)
Net profit/ (loss) after tax ($19.6M) ($35.4M)
$15.8M
PGM ozs production (in operation)
Operating mines 77,799 72,097 8% Non-operating mines - 26,048 - Total PGM production 77,799 98,145 (21%) Average PGM basket price per ounce achieved $1,182 $1,225 ($43) On-mine EBITDA of $7.6 million for the quarter was achieved on production of77,799 PGM ounces, an 8% increase over the previous quarter, in spite of thedifficult operating conditions. Revenue (PGM sales plus interest income of $1.9 million) from operating mineswas marginally up at $87 million compared to $85 million in the previousquarter. The increased revenue, achieved despite the lower PGM basket price wasdriven by an 8% increase in production for the quarter. The benefits of recentmetal price increases in the PGM sector towards the end of the quarter, shouldbe felt in the next quarter, barring any adverse corrections. Quarter ended Sept 11 Dec 11 Mar 12 June 12 Sept 12 Revenue $151.3M $125.6M $121.9M $118.1M $88.9M PGM sales adjustments ($6.7M) ($17.9M) $2.9M ($9.5M) ($1.5M) Total revenue $144.6M $107.7M $124.8M $108.6M $87.4M
Group gross cash profit for the quarter was $9.4 million compared with a gross cash loss in the June quarter of $5.4 million.
Production for the quarter from Aquarius' operating mines increased 8% to77,799 PGM ounces. Kroondal, Mimosa and Platmile recorded improved productionwith only the CTRP plant (which was placed on care and maintenance in lateAugust) recording a decrease in production. This is a credible performance fora quarter which has seen operations interrupted by industrial unrest across thesector. Following the suspension of operations at the Marikana and Everestmines in June 2012, total Group production was lower. Quarter ended Attributable ounces Sept 11 Dec 11 Mar 12 June 12 Sept 12 Operating mines 73,758 72,513 68,673 72,097 77,799 Non-operating mines* 36,070 33,116 29,129 26,048 - 4PGE production 109,828 105,629 97,802 98,145 77,799 Non-operating mines *
Everest and Marikana were placed on care and maintenance in the previous quarter. Production from these mines has been reported separately to allow continuing operations to be assessed accurately.
Total cash cost of production of $78 million was lower due to Everest andMarikana being placed on care and maintenance. On a unit cash cost basis,Kroondal's cash costs per PGM ounce of production reduced 2% in Rand terms and4% in Dollar terms on the back of Kroondal's 12% increase in production. Thiswas despite higher wage costs resulting from the implementation of an annualwage increase of 7.5% effective from 1 July 2012. Mimosa's cash costs per PGMounce increased 12% in the quarter mainly due to an increase in mining fees aswell as challenges experienced in achieving planned processing efficiencies.
Amortisation and depreciation were lower at $11.5 million compared to the previous quarter, in line with lower production.
Administrative costs of $2.9 million were also in line with quarterly trends.Finance costs for the quarter included interest paid on borrowings of $4.5million, non-cash interest accretion on convertible bonds of $2.5 million andunwinding of the rehabilitation provision of $1 million. Net operating cash outflow for the quarter of $40 million comprised inflow fromsales of $86 million, $104 million paid to suppliers, closure costs of $21million, income tax paid of $2 million and interest received of $2 million.Development and capital expenditure for the quarter was $15 million, whichincluded capex transition costs of $4 million. Net financing cash outflows of$8 million included interest payments of $4 million and loan repayments of
$3million. The Group's cash balance was $122 million at the end of the quarter, held asfollows: AQP $79 million AQPSA $23 million ACS(SA) $1 million Mimosa $14 million Platmile $3 million Ridge Mining $2 million Total $122 million Aquarius Platinum Limited Consolidated Income Statement Quarter ended 30 September 2012 $'000 Quarter Quarter Financial Year Ended Ended Ended Note 30/09/12* 30/09/11* 30/06/12 PGM production 77,799 109,828 411,398 Revenue (i) 87,439 144,579 485,736
Cost of sales (including D&A) (ii) (89,530) (146,189) (531,169)
Gross loss (2,091) (1,610) (45,433) Other income 68 167 2,076 Administrative costs (iii) (2,854) (3,965) (11,950)
Foreign exchange gain/(loss) (iv) 2,664 (94,116) (95,001) Finance costs (v) (8,041) (9,265) (34,674) Closure and transition costs (vi) (14,621) - -
Impairment losses (vii) - - (3,983) Loss before income tax (24,875) (108,789) (188,965) Income tax benefit (viii) 5,267 16,947 30,678 Net loss (19,608) (91,842) (158,287)
Net loss is attributable to: Equity holders of Aquarius (19,628) (91,842) (158,227)Platinum Limited Non-controlling interests (ix) 20 - (60)
(19,608) (91,842) (158,287) Earnings per share
Basic loss per share (cents per (4.17) (19.60) (33.77)
share) * Unaudited
Notes on the September 2012 Consolidated Income Statement
The decline in revenue reflects lower production due to the closure of Everest and Marikana and lower prices received compared with the pcp.
Lower aggregate costs are due to Everest and Marikana being placed on care andmaintenance in June. At the South African operations, unit cash costs per PGMounce decreased by 2% quarter-on-quarter in Rand terms and 4% in Dollar terms. Mimosa's unit costs increased by 12% quarter on quarter as a result ofefficiency problems. Movements in US Dollar terms differed due to exchangerates prevailing at the time.
Administration and other costs of $3 million are in line with those of previous periods.
The forex gain is attributable to revaluation adjustments on intercompanyloans, cash balances held in Rands, Australian Dollars and Pound Stirling, andthe revaluation of pipeline debtors in line with movements in the Rand againstthe US Dollar.
Finance costs include interest paid on borrowings of $4.5 million, non-cash interest accretion on convertible bonds of $2.5 million and the unwinding of the rehabilitation provision amounting to $1 million.
Closure and transition costs reflect closure costs incurred on the closure of Everest and Marikana and the transition to owner-operator costs incurred at Kroondal.
Impairment losses relate to the unrecoverable portion of a loan balance due from a jointly controlled entity.
Income tax benefit consists mainly of AQPSA deferred tax credits.
Non-controlling interests reflect the 8.3% non-controlling interest of Platinum Mile Resources (Pty) Ltd.
Aquarius Platinum Limited
Consolidated Statement of Cash Flows
Quarter ended 30 September 2012 $'000 Quarter Quarter Financial Year Ended Ended Ended Note 30/09/12* 30/09/11* 30/06/12
Net operating cash (outflow)/inflow (i) (40,053) 34,056
26,356 Net investing cash outflow (ii) (14,952) (44,489) (120,079) Net financing cash outflow (iii) (7,618) (25,519) (34,525) Net decrease in cash held (62,623) (35,952) (128,248) Opening cash balance 180,088 328,083 328,083
Exchange rate movement on cash 4,422 (16,329)
(19,747) Closing cash balance 121,887 275,802 180,088 * Unaudited
Notes on the September 2012 Consolidated Statement of Cash Flows
Net operating cash flow for the quarter includes $86 million inflow from sales,$104 million paid to suppliers, closure and transition costs of $21 million,income tax paid of $2 million and interest received of $2 million.
Comprises development and plant and equipment expenditure on AQPSA and Mimosa, including capex closure costs of $4 million.
Includes interest paid of $4 million and Mimosa bank loan repayment of $3million. Aquarius Platinum Limited Consolidated Balance Sheet At 30 September 2012 $'000 As at As at Note 30/09/12* 30/06/12 Assets Cash and cash equivalents 121,887 180,088 Current receivables (i) 86,366 87,100 Other current assets (ii) 49,834 44,258 Property, plant and equipment (iii) 275,534 276,195 Mining assets (iv) 441,612 437,574 Intangibles (v) 86,979 87,882 Other non-current assets (vi) 89,639 88,093 Total assets 1,151,851 1,201,190 Liabilities Current liabilities (vii) 89,852 113,466 Non-current payables (viii) 4,297 4,204 Non-current interest-bearing liabilities (ix) 266,098 265,526 Other non-current liabilities (x) 135,683 141,349 Total liabilities 495,930 524,545 Net assets 655,921 676,645 Equity Issued capital 23,643 23,516 Unissued shares - 2,436 Reserves 705,798 704,606 Accumulated losses (79,822) (60,195)
Total equity attributable to equity holders of Aquarius Platinum Limited
649,619 670,363 Non-controlling interests (xi) 6,302 6,282 Total equity 655,921 676,645 * Unaudited
Notes on the September 2012 Consolidated Balance Sheet
Reflects debtors receivable on PGM concentrate sales
Reflects PGM concentrate inventory, consumables, stores and critical spares.
Represents plant and equipment within the Group
Includes Group mining assets at Kroondal, Marikana, Mimosa, Everest, Blue Ridge, CTRP and Platmile
Includes intangibles relating to contract value acquired on the acquisition of equity interest in Platinum Mile Resources (Pty) Ltd.
Includes the recoverable portion of the rehabilitation provision from AngloPlatinum of $11 million, receivables from the Reserve Bank of Zimbabwe (RBZ) of$28 million, receivables from jointly controlled entities of $26 million,investments in rehabilitation trusts of $18 million, prepayments of $3 millionand investments held for resale of $3 million.Includes trade creditors of $51 million, DBSA and IDC bank loans in Blue Ridgeof $28 million, AQPSA finance leases of $6 million, Mimosa loans of $3 millionand provision for annual leave of $1 million.
Includes rehabilitation obligations on P&SA1 and P&SA2 structures.
Includes convertible bonds of $259 million, AQPSA lease facilities of $5 million and Mimosa loans of $2 million.
Includes deferred tax liabilities $92 million and provision for closure costs $44 million.
Reflects the 8.3% non-controlling interest of Platinum Mile Resources (Pty) Ltd.
Operating Review Summary (all numbers on 100% basis)
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum - 100%)
P&SA 1 at Kroondal (Aquarius Platinum - 50%)
12-month rolling average DIIR deteriorated to 1.41 per 200,000 man hours from 1.20 in the previous quarter
Production increased to 1,410,000 tonnes
Head grade improved from 2.38g/t to 2.51g/t
Recoveries improved by 1% to 80%
Volumes processed increased to 1,430,000 tonnes
Stockpiles at the end of the quarter totalled approximately 17,000 tonnes
PGM production increased by 12% to 92,073 PGM ounces
Revenue increased by 40% to R849 million quarter-on-quarter due to improved production and a higher basket in the latter portion of the quarter resulting in positive sales adjustments
Mining cash costs increased by 4% to R580 per tonne, a result of the annual wage increase of 7,5% which was implemented with effect from 1 July 2012
Unit cost per PGM ounce reduced 2% to R9,006 per PGM ounce due to increased tonnes production, improved plant head grade and higher recoveries.
Kroondal's cash margin for the period improved from -24% to 2%
[See www.aquariusplatinum.com for graph]
Commentary
Kroondal: Production at Kroondal improved over the quarter under review, butremained below capacity because of the continued implementation of the revisedhanging wall support regime and industry wide labour unrest. During thequarter, mining crews from all four of Kroondal's shafts were in various stagesof training as part of the move to the revised support regime. Production atKroondal is expected to increase once the revised support regime roll out iscompleted and the operation returns to full production. This is expected tooccur during the December 2012 quarter. Unprotected strike action occurred intermittently at Kroondal's Kwezi Shaftduring the quarter. A total of 378 employees who were striking unlawfully weredismissed during mid July 2012. A total of 164,062 tonnes were lost during thequarter at Kwezi due to this unlawful strike action. On 1 August, an attemptto invade the Kwezi shaft by ex-employees of the mining contractor resulted inKroondal's security contractor having to use live ammunition to prevent aninvasion of the shaft. This resulted in six people losing their lives andcaused further tension and uncertainty at the shaft. Experienced and trainedemployees from Marikana 4 shaft, who were in the process of being retrenched,were transferred to Kwezi to replace those dismissed, thereby minimisingdisruptions to production. Also affecting production was the unprotected strike action by employees ofother mining companies in the vicinity, who attempted to disrupt operations atKroondal. The Lonmin/Marikana incident affected the entire Rustenburg region.During this incident, a further five production shifts were lost as employeesat all Kroondal shafts were sent home to ensure their safety. The Department of Mineral Resources (DMR) visited the Simunye shaft towards theend of August. During this visit, a Section 54 instruction was issued and atotal of five production days were lost before the Section 54 was lifted by theDMR. This said, the number of Section 54 Instructions have reducedsignificantly during the course of the year due to improved communication andrelationship between the company and the DMR. The largest contributor to lost blasts was the Kwezi shaft, a result of labourunrest. All the other shafts were within 4% of their target for lost blasts.Factors contributing to lost blasts were (i) crews attending training on thenew support system; (ii) incomplete blasting cycles; and (iii) very poor beltavailability at Kopaneng and Simunye. During the quarter, Kopaneng shaft concentrated on belt upgrades. The newbunker and tips were commissioned during the third week of October 2012. Theventilation shaft at Simunye has holed and the ventilation layout with the newfans is expected to be commissioned by the end of October 2012. The migration from contractor to owner mining, which was first announced aspart of the year-end results, is approximately 80% complete. The migration hasbeen positively received by organised labour, employees and suppliers. It isscheduled to be completed by mid-December 2012 and progress remains on trackand is running below budget.
Marikana: As disclosed previously, as a result of current low Rand PGM basket prices, the remaining shaft (Marikana 4 shaft) and the processing plant at Marikana have been placed on care and maintenance until further notice.
Everest: As disclosed previously, as a result of current low Rand PGM basket prices, temporary geological problems and unstable labour relations, the Everest mine has been placed on care and maintenance until further notice.
AQPSA Operating costs per ounce
4E 6E 6E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu) Kroondal 9,006 7,395 7,261 Marikana - - - Everest - - - Capital expenditure Kroondal Marikana Everest
(R'000 unless otherwise stated) Total Per 4E oz Total Per 4E oz Total Per 4E oz
Ongoing establishment of infrastructure 60,855 661 -
- - - Project capital 48,655 528 - - - - Mobile equipment 56,002 608 - - - - Total 165,512 1,798 - - - - The Company continues to develop the K6 shaft at Kroondal and conduct designand drill work at Everest. Almost all other project and growth capitalexpenditure has been placed on hold, pending improved market conditions. TheCompany is continuing with the necessary maintenance capital expenditurerequired by its operating mines.
The capital expenditure on mobile equipment is financed through a lease agreement over the life of the equipment.
MIMOSA INVESTMENTS (Aquarius Platinum - 50%)
Mimosa Platinum Mine
12-month rolling average DIIR improved to 0.19 per 200,000 man hours worked
Production increased by 17% to 630,753 tonnes
Head grade was static at 3.66g/t
Recoveries improved slightly to 77.71%
Volumes processed increased by 3% to 616,362 tonnes
Stockpiles at the end of the quarter totalled approximately 98,763 tonnes
PGM production increased by 3% to 56,341 PGM ounces
Revenue decreased by 27% to US$59 million due to depressed metal prices
Mining cash costs increased by 13% to US$76 per tonne, and costs per PGM ounce by 12% to $831
Stay-in-business capital expenditure was $162 per PGM ounce for the quarter
Mimosa's cash margin for the period fell from 44% to 20% due to depressed metal prices and rising production costs.
[See www.aquariusplatinum.com for graph]
Commentary.
The Mimosa mine continues to operate well. Discussions continue with variousregulatory bodies on the indigenisation process as well as the increased miningfees. There have been no material developments in this regard since the date ofthe Company's last disclosure. Following the agreement between Mimosa and ZESA(the power utility company) reached in late March regarding the uninterruptedpower supply of 20MW for the next five years, Mimosa has experienced no issueswith the electricity supply. Quarterly meetings are held with ZESA's seniormanagement to discuss potential power supply disruptions and ways to improvethe reliability of power supply.
Operating cash costs per ounce
Unit cash costs per PGM ounce (before by-product credits) were 12% higher thanthose achieved in the previous quarter. The higher costs were mainly due toincreases in wage and mining fees as well as challenges experienced inachieving planned processing efficiencies. Metal recoveries, though marginallyimproved from the previous quarter, are still below expected levels. Theconsumption of steel balls, chemicals and reagents was increased, and exceededbudget, in an effort to improve grinds and normalise power draws so as toimprove recoveries and to counter lower-than-anticipated process efficiencies.A dedicated team has been put in place to work on an initiative to improverecoveries and other plant efficiencies by about 4% within the next 24 months. 4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu & Co) Mimosa 831 786 537 Capital expenditure
The total capital expenditure for the first quarter decreased to $9 million from $15 million in the fourth quarter of FY2012.
TAILINGS OPERATIONS
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum - 50%)
The CTRP plant was placed on care and maintenance on 6 August 2012.
Material processed decreased 64% to 30,000 tonnes
Head grade decreased to 2.67 g/t
Recoveries increased from 22% to 25%
Production decreased to 644 PGM ounces
Cash costs increased by 58% to R9,658 per PGM ounce
Revenue was R5 million for the quarter
CTRP's cash margin for the period was (16%), a decrease from 12% in the previous quarter
Platinum Mile (Aquarius Platinum - 91.7%)
Material processed decreased 8% to 1,130 million tonnes
Head grade increased to 0.60 g/t
Recoveries increased to 15%
Production increased to 3,270 PGM ounces
Cash costs decreased to R5,734 per PGM ounce
Revenue was R29 million for the quarter
The cash margin for the period was 35%, an increase from (1%) in the previous quarter
CommentaryCTRP: The operation was placed on care and maintenance on 6 August 2012. Themix of feed material changed, with less fresh current arisings beingprocessed. More oxidised and highly disseminated dump material, which requiresupfront milling to achieve sustainable recoveries, is being supplied as feed.The coarse grinding expansion at the operation will be considered when marketconditions improve. A preliminary study at CTRP has indicated that the oxidisedmaterial could be milled to achieve the requisite recoveries, but that capitalof approximately R30 million would be required. It was decided that currentRand PGM prices do not warrant the capital expense. The study will be optimisedand if deemed feasible will be submitted to CTRP shareholders forconsideration. Platinum Mile: The operation lost 13 production days during the quarter owingto strikes at Anglo Platinum. These strikes continued into October and, as aresult, at the time of the writing, the operation had received no feed fromAnglo Platinum.
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 9,658 9,173 9,020 Platinum Mile 5,743 4,943 4,384
Statistical Information: Kroondal P&SA1
[See www.aquariusplatinum.com for statistical information]
Statistical Information: Mimosa
[See www.aquariusplatinum.com for statistical information]
Statistical Information: Chrome Tailings Retreatment Plant
[See www.aquariusplatinum.com for statistical information]
Statistical Information: Platinum Mile
[See www.aquariusplatinum.com for statistical information]
CORPORATE MATTERS
Issue of Shares to Support Black Economic Empowerment (BEE) Partners
Subsequent to the end of the quarter, the Company issued 14,000,000 Shares aspart of a transaction intended to preserve the black economic empowerment("BEE") credentials of Aquarius. Following the decrease in the share price ofAquarius over recent months, the financing arrangements of Aquarius'cornerstone BEE shareholders, being Savannah Platinum SPV, Chuma Platinum SPVand Malibongwe Platinum SPV, ("BEE Partners"), required the sale ofapproximately 35 million of the 64 million Shares held by the BEE Partners.Aquarius is not a party to the current financing arrangements between the BEEPartners and its financiers.
The Board of Aquarius considered the implications of these sales of the BEEPartners' shares and of further potential sales, and resolved that it was inthe interests of Aquarius, and in line with its ongoing commitment to complyingwith the BEE and regulatory framework in South Africa, to assist the BEEPartners to preserve their remaining shareholdings in Aquarius. In order to give effect to such resolution, Aquarius lent to its wholly ownedsubsidiary, Aquarius Platinum Investments Limited ("API") the proceeds of theshare issue received by Aquarius which API applied to acquire the 14,000,000million Shares. API has entered into a limited guarantee and pledge of theShares ("Security Arrangements") with the financiers to the BEE Partners. Thepurpose of the Security Arrangements is to provide sufficient share security tothe BEE Partners' financiers. The Security Arrangements contain customaryterms and conditions as well as specific events of release of the security,with the objective of limiting recourse and impact to API.
Board Changes
Mr Stuart Murray advised of his resignation as director and CEO of Aquarius andexecutive chairman of AQPSA, effective 5 October 2012 after eleven years ofservice with the Group. Mr Jean Nel was appointed Interim Chief OperatingOfficer of the Group and Mr Zwelakhe Mankazana, Interim Non-executive Chairmanof AQPSA. More information on all corporate matters can be found at www.aquariusplatinum.com Aquarius Platinum LimitedIncorporated in BermudaExempt company number 26290 Board of DirectorsNicholas Sibley Non-executive Chairman Jean Nel Interim Chief Operating 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 HaslamKofi MornaNicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)David DixZwelakhe MankazanaNicholas Sibley Nomination Committee
The full Board comprises the Nomination Committee
Company SecretaryWilli Boehm AQPSA Management
Jean Nel Interim Chief Operating Officer
Robert Schroder Managing Director Graham Ferreira Finance Director Wessel Phumo General Manager: Kroondal Mimosa Mine ManagementWinston 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 September 2012, the Company had on issue: 472,851,336 fully paid common shares and 120,000 unlisted options.
Substantial Shareholders 30 September 2012 Number of Shares Percentage Chase Nominees Limited 27,997,101 5.92 State Street Nominees Limited (OM02) 23,689,792 5.01 Main Listing: Australian Securities Exchange Trading Information (AQP.AX) Secondary London Stock Exchange (AQP.L) ISIN number BMG0440M1284 Listing: Secondary JSE Limited (AQP.ZA) ADR ISIN number US03840M2089 Listing: Convertible Bond ISIN number XS0470482067 Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE) Liberum Capital Limited Rand Merchant Bank Euroz Securities Ropemaker Place, Level (A division of FirstRand Bank 12 Level 18 Alluvion Limited) 25 Ropemaker Street, 58 Mounts Bay Road, 1 Merchant Place London Perth WA 6000 Cnr of Rivonia Rd and Fredman Drive,EC2Y 9LY Sandton 2196 Telephone: +44 (0) 20 Telephone: +61 (0) 8 3100 2000 9488 1400 Johannesburg South Africa Bank of America Merrill Lynch 2 King Edward St 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
Unit 16, Berkley Office Park, 8 Bauhinia Street, Highveld Techno Park, Centurion, Pretoria, South Africa. Postal Address: PO Box 76575, Wendywood, 2144, South Africa
Telephone: +27 (0)120012001Facsimile: +27 (0)120012070
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 the United Kingdom and South Africa: In Australia: Jean Nel +27 12 001 2001 Willi Boehm +61 (0) 8 9367 5211 GlossaryA$ Australian Dollar
Aquarius Aquarius Platinum Limited or AQP 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 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
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 Rand Ridge 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