AQP.L Regulatory News (AQP)

AQUARIUS PLATINUM LIMITED - Preliminary full year results to 30 June 2015

PR Newswire

London, August 12

AQUARIUS PLATINUM LIMITED

Preliminary Full Year Results to 30 June 2015

Key Points: Financial

Key Points: Operational

Key Points: Strategic

Commenting on the results, Jean Nel, CEO of Aquarius Platinum, said:

For the 2015 financial year both mining operations, Kroondal and Mimosa, delivered record production performances whilst maintaining unit cost increases well below inflation and at the same time improving safety performances materially. Operational management at both mines deserve credit for this performance in what continues to be a challenging operating environment. During the year the balance sheet was also strengthened following the receipt of $60 million of proceeds from non-core asset sales.

The macro environment however remains very challenging given Dollar metal prices at decadal lows. Against this back-drop Aquarius will not only continue its focus on consistent cost and capital discipline, but will also assess further initiatives to reduce absolute costs and increase efficiencies and will perform an assessment of the sustainability of each shaft at each operation.

Financial results: Year to 30 June 2015

Aquarius recorded a consolidated net loss after tax (IFRS) of $98 million for the year (6.59 cents per share). The result included $70 million of one off items listed below:

EBITDA from controlled entities was $26 million, a $3 million decrease from the pcp. The decreased EBITDA was despite a 5% increase in production (controlled entities) and excellent cost control due to lower PGM prices (down 7%). Kroondal recorded a 1% increase in unit costs (Rand terms) compared to the pcp despite significantly higher mining cost inflation.

Profit & Production Summary

* Includes $20 million impairment of Blue Ridge and Sheba’s Ridge, $28 million discounting of RBZ receivable and

$4.5 million provision for 15% export tax at Mimosa.

Revenue (PGM sales, interest) for the year of $213 million was $20 million lower compared to the pcp. The lower revenue reflects the difficult PGM market which saw the average basket Dollar price reduce to an average $1,097 per PGM ounce in FY2015, a 7% decrease. In Rand terms, the PGM basket increased by 3% directly as a result of a weaker Rand which decreased 10% to average R11.42 in FY2015. In Zimbabwe, the Mimosa PGM basket price was similarly subdued recording a 5% decrease to $1,075 in FY2015 compared to the pcp.

Total cost of production was $211 million, down $20 million despite a 3% increase in production at Kroondal. This was primarily due to good cost control and the weakening Rand.

Cost per PGM ounce in Dollar terms in South Africa decreased 9% to $803 but increased 1% in Rand terms. In Zimbabwe the cash cost per PGM ounce was $802, a 9% reduction demonstrating the impact of the cost saving initiatives implemented in FY2014. Maintaining operating unit cost increases well within inflationary targets will continue to be a point of focus particularly in the ongoing low metal price environment.

Significantly, Kroondal recorded its tenth consecutive +105,000 PGM ounce production quarter, a record for the mine.

Exchange rate movements continued to have a volatile effect on earnings. The Rand weakened significantly to average R11.45 to the US Dollar compared to R10.39 in the pcp. During the year, Aquarius recorded a net foreign exchange gain of $2 million comprising gains on sales adjustments and revaluation of cash, intercompany loans and pipeline debtors.

Administration costs of $6 million were lower by $1 million compared to pcp. Depreciation and amortisation for the year of $23 million was lower despite increased production due to an increased resource base resulting from the extension of the Kroondal mine life.

Finance costs for the year of $15 million were $13 million lower compared to the pcp as a result of the buy back of $173 million of the convertible bond concluded in May 2014. Finance costs include $5 million interest on convertible bonds and bank borrowings, $5 million of non-cash interest arising from the unwinding of the debt portion of the convertible bond and $5 million in non-cash interest arising from the unwinding of the net present value of the rehabilitation provisions of AQPSA.

Cash balances

Group cash at 30 June 2015 was $196 million, up $59 million from June 2014. The increase in cash was mainly attributable to $27 million of proceeds received from the sale of Kruidfontein and $33 million proceeds from the sale of Everest. In addition to this, the Group paid $23 million to fund its capital expenditure program and received $20 million of dividends from Mimosa. Cash held at Mimosa and Blue Ridge which is not classified as group cash due to the adoption of equity accounting was $11 million (100% basis).

Sale of assets

Kruidfontein

Kruidfontein mining rights were sold for $27 million. Aquarius retained the gross proceeds of the sale and satisfied settlement of the original vendors rights to 40% of the proceeds via the issue of 36,505,657 shares in Aquarius. An accounting profit of $19 million was recorded.

Reconciliation of cash proceeds to accounting profit:

The Kruidfontein asset, being held by a South African subsidiary with a Rand functional currency, has been translated to US dollars each month end since the original date of purchase, with any exchange differences going to the foreign currency translation reserve (FCTR). The Rand has devalued against the USD since acquisition. In accordance with International Accounting Standards when a foreign operation is disposed of, the cumulative amount of foreign exchange differences contained within the Foreign Currency Translation Reserve is required to be reclassified through the income statement. Accordingly, a non-cash adjustment of $13 million has been made, representing reclassification of the cumulative amount of foreign exchange differences relating to Kruidfontein up to the date of disposal.

Everest

On 10 February 2015 Aquarius entered into an agreement to sell its Everest mine and related assets to Northam Platinum Limited for R450 million, to be completed in two parts, being R400 million for the concentrator and other mining assets of Everest Mine (Part A), plus R50 million for the Everest Mining Right (Part B). Part A proceeds were received in June 2015. Part B of the disposal process is subject to the consent of the Minister of Mineral Resources in terms of section 11 of the Mineral and Petroleum Resources Development Act. The section 11 application has been submitted to the Department of Mineral Resources.

Impairment assessment of mines

An impairment charge of $29 million was made against the carrying value of the Group's mining assets of which $28 million relates to PlatMile.

Joint venture entities

Mimosa

Mimosa recorded an EBITDA profit attributable to Aquarius of $42 million and a net loss before tax of $5 million. The result was achieved on production of 118,033 PGM ounces attributable to Aquarius. The improved EBITDA result compared to the pcp was driven by a 7% increase in production, lower unit costs (down 9%) which mitigated the 5% fall in the average PGM basket price achieved. As at the date of this release the deferral of the 15% export tax in Zimbabwe had not been formalised and hence in this regard an amount of $4.5 million has been accrued in FY2015. During the year a dividend of $20 million was received from Mimosa.

Cash held in Mimosa at 30 June 2015 was $10 million (100%).

Mimosa's financial result is provided in the Group Financials table on page 5 and its operational performance is discussed under the Operating Review section of this announcement.

RBZ receivable

During the period under review the Directors have continued to assess progress of Zimbabwe's initiatives in relation to indigenisation and progress on the issue of Government backed securities to replace RBZ debt. In the case of the latter, draft legislation has been prepared but has not yet been passed by parliament. In addition, the IMF stated in November 2014 that it requires further changes to economic policy in Zimbabwe before it will support facilitating access to international capital markets by the Government of Zimbabwe.

Having considered the above the Directors believe concluding settlement of the RBZ debt via an indigenisation transaction or the creation of treasury bills as contemplated by the Government of Zimbabwe is now unlikely to occur within twelve months of the balance sheet date, despite the progress initiatives underway.

Accounting standards require that non-interest bearing receivables deemed to be long term be discounted using an effective interest rate to recognise the delay in receipt of funds. The Company has attempted to determine an appropriate discount rate, however due to the absence of ratings and public debt issues in Zimbabwe this process has proven problematic. In view of the difficulty involved in sourcing a reliable discount rate and the difficulty in reliably estimating the time frame to secure full settlement of the RBZ debt, Aquarius has recognised a non-cash expense of $28.5m in the share of loss from joint ventures, equal to its share of the full amount of the RBZ receivable.

Blue Ridge and Sheba’s Ridge

On 14 October 2014, the agreement to sell the Company’s indirect interests in Blue Ridge Platinum (Pty) Ltd and Sheba’s Ridge Platinum (Pty) Ltd was terminated. As a consequence the carrying amount of the Blue Ridge and Sheba’s Ridge assets has been reviewed resulting in an impairment charge of $20 million being included in the share of loss from joint venture entities.

Group Financials by Operation

* In the consolidated financial statements the Mimosa and Blue Ridge operating segments are accounted for using the equity method. The table above provides a reconciliation of the segment information to the IFRS financial statements

Aquarius Platinum Limited

Consolidated Income Statement

Year ended 30 June 2015

$’000

Notes on the Consolidated Income Statement

Aquarius Platinum Limited

Consolidated Cash Flow Statement

Year ended 30 June 2015

$’000

Notes on the Consolidated Cash Flow Statement

Aquarius Platinum Limited

Consolidated Balance Sheet

At 30 June 2015

$’000

Notes on the Consolidated Balance Sheet

OPERATING REVIEW

This section contains summarised operating reviews of each of the Company’s operations. Full operating statistics are provided on page 15 of this report, and other updates relevant to all operations can be found under Corporate Matters on page 14. In addition, further detail on each of the operations can be obtained from the quarterly and half-year reports released by the Company throughout the financial year, which are available on the Company’s website at http://www.aquariusplatinum.com/.

AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (“AQPSA”) (Aquarius Platinum - 100%)

P&SA 1 at Kroondal (AQPSA – 50%)

Commentary – Kroondal

Safety, Health and Environment

As previously reported, regrettably a fatal incident occurred on 11 October 2014 when Mr Pedro Tafulane Nhabinde, a Team Leader at Kwezi Shaft, tragically lost his life whilst barring during safe declaration. Our deepest condolences go to his family and friends.

The Kroondal operations ended the year with an improved DIIR compared to the previous year.

Operations

Production for the year declined by 1% to 7,151 million tonnes. During the year, the Kroondal work force maintained a positive outlook with open communication channels on all levels. A recognition agreement was concluded with AMCU in early January 2015. Negotiations were conducted in a mature manner which management would like to commend AMCU for.

Operating Cash Costs

Cash costs at Kroondal increased by 1% to R9,168 per 4E ounce.

AQPSA Operating costs per ounce (R/oz)

AQPSA Capital expenditure

Stay-in-business capital expenditure was in line with the mine plan and mobile equipment replacement schedule.

P&SA2 at Marikana (Aquarius Platinum – 50%)

Given the continuing low Rand PGM basket prices, Marikana continues on care and maintenance until further notice.

Everest Mine

Part A of the sale to Northam was concluded and Part A proceeds of R400 million received. Section 11 approvals are underway for conclusion of Part B following which the remaining R50 million becomes payable to Aquarius.

MIMOSA INVESTMENTS (Aquarius Platinum - 50%)

Mimosa Platinum Mine

Commentary

Safety, Health and Environment

No fatalities occurred at Mimosa during the year. One lost-time injury was reported during the period in line with improvement in DIIR.

Operations

The Mimosa mine operated very well during the year, enjoying cordial industrial relations and meeting most of its production targets.

Regulatory and fiscal environment

During the year, the Zimbabwean political and regulatory environment remained uncertain in a number of respects. Significant regulatory fiscal issues are as follows:

15% Export Levy on un-beneficiated PGMs

In the 2015 National Budget Statement, the deferment of the 15% export levy on un-beneficiated platinum to January 2017 was proposed. However, the Finance Act (No 3) of 2014 which gives legal effect to the budget proposals did not include the deferment of the 15% tax on un-beneficiated PGMs. This effectively meant that the tax was not deferred and hence the 15% export levy on un-beneficiated PGMs became law effective 1 January 2015. The Company continues to engage the authorities in consultation with the Chamber of Mines to have the levy deferred. In the absence of the formal deferment in law, and having considered the above the Directors believe it is prudent to provide for the impact of this levy. Accordingly an attributable amount of $4.5 million has been accrued for the financial year ended June 2015. Aquarius and Mimosa are confident that the matter will be resolved and remains committed to building good working relations with the Government of Zimbabwe. Furthermore Mimosa, together with the other Platinum producers in Zimbabwe, are currently in the process of assessing the viability of a number of in-country smelting and beneficiation alternatives. The outcome of these assessments will be communicated to all relevant stakeholders in due course.

Royalties

The proposal to render royalties payable by Mimosa non-deductible for income tax purposes was implemented with effect from the year of assessment beginning on 1 January 2014, and therefore impacted Mimosa from the start of the 2014 financial year on 1 July 2013. This position has remained in the 2015 national budget. The financial impact of the non-deductibility of royalties was $4.2 million for the financial year to June 2014 and $4.7 million for the financial year ended June 2015, 50% of which is attributable to Aquarius. Negotiations are continuing with the authorities to confirm that the royalties are deductible for income tax purposes.

Indigenisation

Mimosa continues to interact with the Ministry of Indigenisation and Ministry of Mines to work towards a sustainable solution in relation to indigenisation, but in the period under review no agreements or definitive terms were agreed between Mimosa and the Ministry of Indigenisation. As a result, the matter is ongoing and management is unable to estimate the financial impact of the proposed transaction.

Operating Cash Costs

Unit operating costs decreased by 9% from the prior year mainly as a result of the impact of increased production.

Operating cash costs per ounce ($/oz)

Capital expenditure

Stay in business capital expenditure at Mimosa was $27.8 million ($118 per PGM ounce), spent mainly on mobile equipment, drill rigs, LHDs, the conveyor belt extension and down dip development.

TAILINGS OPERATIONS

Platinum Mile (Aquarius Platinum – 91.7%)

Commentary

Platinum Mile

As reported with half year results it is expected that Anglo Platinum will start the commissioning of their dump re-treatment project before in the end of the 2015 calendar year. This project could result in some 280,000 tons per month of additional feed being treated at the operation.

The increase in feed volumes at the operation should result in increased production yields for the rest of the ensuing financial year and could be the catalyst for continued profitable operation amid strained market and pricing conditions.

Operating cash costs per ounce (R/oz)

Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum - 50%)This operation remains on care and maintenance.

CORPORATE MATTERS

Sale of non-core assets

During the year $60 million was received following the successful disposal of two non-core assets comprising the Kruidfontein mining rights and the Everest mine (Part A).

Part B of the Everest disposal being R50 million for the Everest Mining Right is subject to the consent of the Minister of Mineral Resources in terms of section 11 of the Mineral and Petroleum Resources Development Act. The section 11 application has been submitted to the Department of Mineral Resources. Should the Ministerial Consent not be obtained, the first part of the Disposal will not be unwound.

Growth projects

Aquarius previously advised that two growth projects had been identified. The following progress was made on both projects during the year:

Mimosa expansion

The pre-feasibility study of the expansion of Mimosa by 25% was completed during the year and the summary results released as part of the interim release in February 2015. The bankable feasibility study is currently underway and is due to be completed in time for the FY16 half year release in February 2016.

Kroondal tailings retreatment project

Aquarius recently received formal confirmation from the Department of Water and Sanitation (DWS) that the technical specification submitted by the company had been approved and hence the company expects the issue by the DWS of an appropriate Integrated Water Use Licence (“IWUL”). Upon receipt of the IWUL Aquarius will update the relevant cost and capital assumptions and advise shareholders accordingly.

Importantly, Aquarius will take into account the prevailing and forecast metal price environment and balance sheet strength before it commits any capital to projects.

More information on all corporate matters can be found at www.aquariusplatinum.com

See http://www.aquariusplatinum.com/ for Statistical Information

Aquarius Platinum LimitedIncorporated in Bermuda

Exempt company number 26290

Board of Directors

Audit/Risk Committee

David Dix (Chairman)

Tim Freshwater

Edward Haslam

Kofi Morna

Sir Nigel Rudd

Remuneration Committee

Edward Haslam (Chairman)

David Dix

Zwelakhe Mankazana

Sir Nigel Rudd

Nomination Committee

Sonja de Bruyn Sebotsa (Chairman)

Edward Haslam

Tim Freshwater

Kofi Morna

Sir Nigel Rudd

Willi Boehm

Chief Operating Officer

Robert Schroder

Company Secretary

Willi Boehm

AQPSA Management

Mimosa Mine Management

Platinum Mile Management

Issued capital

At 30 June 2015, the Company had on issue 1,505,339,079 fully paid common shares.

Aquarius Platinum (South Africa) (Proprietary) Ltd

100% owned(Incorporated in the Republic of South Africa)

Registration Number 2000/000341/07

1st Floor, Block C, Rosebank Office Park, 181 Jan Smuts Avenue, Rosebank, South AfricaPostal Address: PO Box 7840, Centurion, 0046, South Africa

Telephone: +27 (0)10 001 2848

Facsimile: +27 (0)12 001 2070

Aquarius Platinum Corporate Services Pty Ltd

100% Owned

(Incorporated in Australia)

ACN 094 425 555

Level 1, Suite 6, Southpoint, 100 Mill Point Road, South Perth WA 6151, Australia

Postal Address: PO Box 485, South Perth, WA 6951, Australia

Telephone: +61 (0)8 9367 5211Facsimile: +61 (0)8 9367 5233

Email: info@aquariusplatinum.com

For further information please visit www.aquariusplatinum.com or contact:

Glossary