23 Jul 2012 07:02
Fourth Quarter 2012 Aquarius Platinum Limited
Aquarius Platinum Limited Production Results to 30 June 2012 Highlights
Average PGM Dollar prices decreased in Q4 - platinum and palladium fell 6% and 8% respectively while rhodium fell 9%
The Rand weakened against the US Dollar by 5% on average quarter-on-quarter
Attributable production for the fourth quarter increased slightly quarter-on-quarter to 98,143 4E ounces
Stronger production from Kroondal compared to the previous quarter
Marikana and Everest mines placed on care and maintenance during the quarter
Intermittent unlawful industrial action impacting Kroondal's Kwezi Shaft inJuly Q4 2012 Operating Results Summary Kroondal Marikana Everest Mimosa CTRP Plat. Mile 4E PGM Production Total (100% basis) 82,212 21,533 15,281 54,588 1,732 2,830 Attributable 41,106 10,766 15,281 27,294 866 2,830 4E Basket Price R/oz 9,799 9,977 9,811 - 9,982 9,423 $/oz 1,218 1,240 1,219 1,239 1,240 1,159 Cash Costs (4E basis) R/oz 9,160 10,842 15,657 - 6,106 6,188 $/oz 1,138 1,347 1,945 740 758 761 Cash Margin (%) -24 -49 -99 51 20 20 Stay-in-Business Capex R/oz 1,118 1,162 1,419 - - - $/oz 139 144 176 269 - -
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said:
"The overall production figure for the fourth quarter was marginally better than that recorded in the prior period. Although this is a positive result, it includes the impact of winding down and suspending operations at Marikana and Everest, and as a result obscures the more material improvement in production volumes from Kroondal. We are confident that the new operational configuration of AQPSA will enable the Company to withstand the continuing downturn, and we expect that production from Kroondal will continue to improve, complemented as always by robust production from Mimosa and the modest margin contribution from our tailings operations. Our cash reserves of US$180 million at 30 June provide us with sufficient funds to manage our operating mines over the next twelve months. The Everest Extension (Buttonshope) acquisition remains outstanding pending completion of various conditions precedent - the funding of this asset acquisition will be considered if and when the need arises.
Unfortunately, as has been well flagged by many industry participants, the likelihood of industrial action over the South African winter is high, largely as a result of inter-union rivalries. Aquarius is by no means immune to this threat, and intermittent unlawful industrial action has occurred at one of Kroondal's four shafts in July. We are working hard to resolve this in order to return to uninterrupted production as soon as possible."
Production by mine Quarter ended PGMs (4E) June 2012 Mar 2012 % Change June 2011 % Change Kroondal 82,212 76,935 7 89,196 -8 Marikana 21,533 26,405 -18 21,411 1 Everest 15,281 15,926 -4 26,954 -43 Blue Ridge - - - 3,021 - Mimosa 54,588 52,053 5 55,605 -2 CTRP 1,732 1,413 23 685 153 Platinum Mile 2,830 3,474 -19 4,694 -40 Total 178,176 176,206 1 201,566 -12
Production by mine attributable to Aquarius
Quarter ended PGMs (4E) June 2012 Mar 2012 % Change June 2011 % Change Kroondal 41,106 38,467 7 44,598 -8 Marikana 10,766 13,203 -18 10,705 1 Everest 15,281 15,926 -4 26,954 -43 Blue Ridge - - - 1,510 - Mimosa 27,294 26,026 5 27,803 -2 CTRP 866 706 23 343 152 Platinum Mile 2,830 3,474 -19 2,347 21 Total 98,143 97,802 0 114,260 -14
Aquarius Group attributable production (PGM ounces) to 30 June 2012
[For graph see www.aquariusplatinum.com]
Market Summary
Metals prices
The prices of all of the PGMs declined relatively uniformly over the quarter under review, becoming more volatile in June. Prices continue to be driven lower by poor investor sentiment on the back of the European economic malaise and evidence of slowing growth in China. These macroeconomic factors are exacerbated by the market's well-placed doubt that the major platinum producers will cut supply meaningfully. Prices continued to be set largely by ETF inflows and outflows rather than fundamental industrial demand, and surpluses across the entire suite of metals remain in the system at present.
The average platinum price declined by 6%, while palladium and rhodium prices fell broadly in line quarter-on-quarter, by 8% and 9% respectively. Gold fell by 5% on average. Platinum closed the quarter down 13% at $1,428 per ounce, while palladium fell by 12% to $578 per ounce and rhodium by 11% to $1,250 over the same period. Gold fell 5% to $1,577 per ounce.
Rand-Dollar exchange rate
The average Rand-Dollar exchange rate weakened during the quarter, falling by 5% from R7.76 to R8.12 to the US dollar, largely tracking Euro weakness. The Rand closed the quarter 8% weaker at R8.24 to the Dollar.
The average Rand basket price fell by 5% quarter-on-quarter, and the spot price by 5% over the period. The US Dollar weighted average group basket price decreased by 5% to $1,225 per 4E PGM ounce compared to the previous quarter.The average South African basket price at AQPSA's operations was R9,843 per PGM ounce for the period.
12-month individual PGM prices to June 12-month PGM basket prices to June
2012 2012 (US$/oz) (US$ and ZAR per PGM basket ounce)
[For graph see www.aquariusplatinum.com]
12-month Rand-Dollar exchange rate to June 2012
(ZAR/US$)
[For graph see www.aquariusplatinum.com]
Average PGM basket prices achieved at Aquarius operations
Quarter ended US$ per PGM ounce (4E) Jun 2012 Mar 2012 % Change Jun 2011 % Change Kroondal 1,218 1,321 -8 1,519 -20 Marikana 1,240 1,330 -7 1,523 -19 Everest 1,219 1,311 -7 1,484 -18 Blue Ridge - - - 1,511 - Mimosa 1,239 1,199 3 1,392 -11 CTRP 1,240 1,425 -13 1,636 -24 Platinum Mile 1,159 1,338 -13 1,487 -22 Weighted Avg. 1,225 1,289 -5 1,480 -17
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 1.20 per 200,000 man hours from 1.08 in the previous quarter
Production increased to 1,374,000 tonnes
Head grade deteriorated from 2.39 g/t to 2.38 g/t
Recoveries improved by 2%
Volumes processed increased to 1,356,000 tonnes
Stockpiles at the end of the quarter totalled approximately 37,000 tonnes
PGM production increased by 7% to 82,212 PGM ounces
Revenue deteriorated by 20% to R605 million quarter-on-quarter due to lower basket prices and the resulting negative sales adjustment
Mining cash costs increased by 3% to R555 per tonne, and costs per PGM ounce by 2% to R9,160
Kroondal's cash margin for the period deteriorated from 9% to -24%
P&SA2 at Marikana (Aquarius Platinum - 50%)
12-month rolling average DIIR improved to 0.47 per 200,000 man hours from 0.50 in the previous quarter
Production decreased by 36% to 316,000 tonnes
Head grade increased by 14% to 2.51 g/t
Recoveries increased by 9% to 81%
Volumes processed decreased by 34% to 330,000 tonnes
PGM production decreased by 18% to 21,533 ounces
Revenue decreased by 41% to R156 million quarter-on-quarter, due to lower production as well as lower basket prices and the resulting negative sales adjustment
Mining cash costs increased by 28% to R708 per tonne, and costs per PGM ounce by 3% to R10,842
Marikana's cash margin deteriorated from -5% to -49%
Everest Mine (Aquarius Platinum - 100%)
12 month rolling DIIR deteriorated to 2.24 per 200,000 man hours from 2.01 in the previous quarter
Production decreased by 12% to 269,000 tonnes
Head grade improved from 2.10 g/t to 2.16 g/t
Recoveries remained stable at 79%
Volumes processed decreased by 7% to 278,000 tonnes
PGM production decreased by 4% to 15,281 PGM ounces
Revenue decreased by 29% compared to the previous quarter to R120 million
Mining cash costs increased by 19% to R861 per tonne, and costs per PGM ounce increased by 16% to R15,657
Everest's cash margin deteriorated from -27% to -99%
Commentary
Kroondal: Production at Kroondal improved over the quarter under review, but remained disrupted by the current hangingwall support regime. Plans were put in place to rectify this issue after the quarter end, as disclosed in the operational update on 4 July. Production at Kroondal is expected to trend back towards full capacity by the end of the calendar year.
Unlawful strike action has occurred intermittently at Kroondal's Kwezi Shaft during July, accompanied by incidents of intimidation and violence as a result of the continuing tensions between rival mining unions on the Western Limb of the Bushveld. Kwezi Shaft accounts for approximately 25% of Kroondal's production and to date approximately 100,000 tonnes have been lost in the July production month. AQPSA is in the process of obtaining a second court order to end the strike and dismiss the instigators.
Marikana: As disclosed during the quarter, the remaining shaft (No. 4 Shaft) and the processing plant at Marikana have been placed on care and maintenance until further notice, as a result of the current low Rand basket prices.
Everest: As disclosed during the quarter, the Everest mine has been placed on care and maintenance until further notice, as a result of the current low Rand basket prices, temporary geological problems and unstable labour relations.
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 9,160 7,520 7,391 Marikana 10,842 8,887 8,663 Everest 15,657 12,875 12,418 Capital expenditure Kroondal Marikana Everest
(R'000 unless otherwise stated) Total Per 4E oz Total Per 4E oz Total Per 4E oz
Ongoing Infrastructure Establishment 52,011 633 25,023 1,162 18,837 1,233
Project Capital 39,902 485 - - 2,840 186 Mobile Equipment 64,623 786 (31,297) (1,453) - - Total 156,536 1,904 (6,274) (291) 21,676 1,419
The Company continues to develop the K6 shaft at Kroondal and conduct design and drill work at Everest. Almost all other project and growth capital expenditure has been placed on hold pending improved market conditions. The Company continues to keep the maintenance capital expenditure required by its operating mines up to date.
The Mobile Equipment Capital is being financed through a lease agreement over the life of the equipment.
MIMOSA INVESTMENTS (Aquarius Platinum - 50%)
Mimosa Platinum Mine
12-month rolling average DIIR deteriorated to 0.25 per 200,000 man hours
Production decreased slightly by 0.14% to 539,446 tonnes
Head grade was almost static at 3.66 g/t
Recoveries improved to 77.26%
Volumes processed increased by 4% to 599,584 tonnes
Stockpiles at the end of the quarter totalled approximately 84,372 tonnes
PGM production increased by 5% to 54,588 PGM ounces
Revenue increased by 37% to US$81 million due to higher metal sales and prices achieved during the quarter
Mining cash costs decreased by 6% to US$67 per tonne, and costs per PGM ounce by 7% to $740
Stay-in-business capital expenditure was $269 per PGM ounce for the quarter
Mimosa's cash margin for the period rose from 31% to 50% due to higher sales revenue
Commentary
The Mimosa mine continues to operate well. Discussions are ongoing with various regulatory bodies in relation to the indigenisation process as well as the increased mining fees and royalties. There have been no material developments since the date of the Company's last disclosure. Following the agreement between Mimosa and ZESA (the power utility company) reached in late March guaranteeing uninterrupted power supply of 20MW for the next five years, Mimosa has experienced no issues with electricity supply. Quarterly meetings are being held with ZESA senior management to discuss potential power disruptions and ways to improve reliability of power supply.
Operating cash costs per ounce
Unit cash costs per PGM ounce (before by-product credits) were 7% lower than those achieved in the previous quarter mainly due to higher metal production and stringent cost control measures.
4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu & Co) Mimosa 740 700 392 Capital Expenditure
The total capital expenditure for the fourth quarter increased from $12.0 million in the third quarter to $15.2 million, mainly due to housing projects.
TAILINGS OPERATIONS
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum - 50%)
Material processed decreased 9% to 82,000 tonnes
Head grade increased to 2.91 g/t
Recoveries increased from 18% to 22%
Production increased to 1,732 PGM ounces
Cash costs decreased by 3% to R6,106 per PGM ounce
Revenue was R13 million for the quarter
CTRP's cash margin for the period was 20%, a decrease from 25% in the previous quarter
Platinum Mile (Aquarius Platinum - 91.7%)
Material processed increased 21% to 1,225 million tonnes
Head grade marginally increased to 0.54 g/t
Recoveries decreased to 13%
Production decreased to 2,830 PGM ounces
Cash costs increased marginally to R6,188 per PGM ounce
Revenue was R19 million for the quarter
The cash margin for the period was 20%, a decrease from 25% in the previous quarter
Commentary
CTRP: A project to install a thickener at the plant has been started. This should result in finer material being presented to the fine grind mill to improve recoveries. Metallurgical test work on the effects of grinding on recoveries has been completed and the results are due to be presented to the Management Board for approval.
Platinum Mile: During the quarter three used coarse grinding mills were purchased from Anglo Platinum for R10 million. The civil and electrical design work has commenced and these mills should come into operation in February 2013. The coarse grinding circuit should yield an additional 480 ounces per month and the total capital cost for this expansion is expected to be around R20 million. The timing of treating Kroondal tailings at the operation is being revisited in the current difficult economic climate. Different processing and funding alternatives are being evaluated.
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 6,106 5,849 5,750 Platinum Mile 6,188 5,334 4,763
Statistical Information: Kroondal P&SA1
[For Statistical Information see www.aquariusplatinum.com]
Statistical Information: Marikana P&SA2
[For Statistical Information see www.aquariusplatinum.com]
Statistical Information: Everest
[For Statistical Information see www.aquariusplatinum.com]
Statistical Information: Mimosa
[For Statistical Information see www.aquariusplatinum.com]
Statistical Information: Chrome Tailings Retreatment Plant
[For Statistical Information see www.aquariusplatinum.com]
Statistical Information: Platinum Mile
[For Statistical Information see www.aquariusplatinum.com]
CORPORATE MATTERS
Mine Closures
As disclosed during the quarter, the Marikana and Everest mines were placed on care and maintenance with immediate effect, pending a sustained improvement in Rand PGM prices. Please see extensive separate disclosures in this regard.
Change to Owner Operator
As disclosed shortly after the quarter end, AQPSA and its mining contractor, M& RC, mutually agreed to terminate their contract mining arrangements. AQPSA will become the Owner Operator of the Kroondal Mine following a handover period which will conclude at the end of 2012. The transition to Owner Operator will be facilitated by Partners in Performance. The Owner Operator model will be rolled out at AQPSA's other mines as they are brought back into production. Please see the Operational Update released on 4 July 2012 for more detail in this regard.
Management Changes
Robert Schroder has been appointed as Managing Director of AQPSA with immediate effect. Rob was previously Director: Projects for AQPSA, and prior to that he was MD of Shaft Sinkers (Pty) Ltd. As a result of the mine closures and as part of the process of moving to Owner Operator, several other management changes have become necessary. These are in the process of being finalised.
More information on all corporate matters can be found at www.aquariusplatinum.comAquarius Platinum LimitedIncorporated in BermudaExempt company number 26290Board of DirectorsNicholas Sibley Non-executive Chairman Stuart Murray Chief Executive Officer Jean Nel Executive: Commercial David Dix Non-executive Tim Freshwater Non-executive Edward Haslam Non-executive
Sir William Purves Non-executive (Senior Independent Director)
Kofi Morna Non-executive ZwelakheMankazana Non-executive Audit/Risk CommitteeSir William Purves (Chairman)David DixEdward HaslamKofi MornaNicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)David DixZwelakheMankazanaNicholas SibleyNomination Committee
The full Board comprises the Nomination Committee
Company SecretaryWilli BoehmAQP ManagementJean Nel Executive: Commercial
Gavin Mackay Executive: Business Development & Communications
AQPSA Management
Stuart Murray Executive Chairman Robert Schroder Managing Director Jean Nel Director: Commercial
Graham Ferreira General Manager: Finance, Admin & Company Secretary
Wessel Phumo General Manager: Kroondal
Mimosa Mine Management
Winston Chitando Managing Director Herbert Mashanyar 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 to be updated Anne
At 30 June 2012, the Company had in issue: 470,312,578 fully paid common shares and 120,000 unlisted options.
Substantial Shareholders 30 June 2012 Number of Shares Percentage
Savannah Resources Limited 34,004,767 7.23 State Street Nominees Limited (OM02) 33,355,185 7.09 JP Morgan Nominees Australia Limited 31,079,384 6.61 National Nominees Limited 26,611,322 5.66 Case Nominees Limited 26,444,397 5.62 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 City Point, 1 Ropemaker Street, London, EC2Y 9HT Euroz Securities Rand Merchant Bank Telephone: +44 (0) 20 3100 Level 18 Alluvion (A division of FirstRand 2000 58 Mounts Bay Bank Limited) Road, 1 Merchant Place Bank of America Merrill Perth WA 6000 Cnr of Rivonia Rd and Lynch Telephone: +61 Fredman Drive, Sandton 2146 2 King Edward St (0) 8 9488 1400 Johannesburg South Africa London, EC1A 1HQ Telephone: +44 (0)20 7628 1000
Aquarius Platinum (South Africa) (Proprietary) Ltd
100% Owned(Incorporated in the Republic of South Africa)
Registration Number 2000/000341/07
Unit 16, Berkley Office Park, 8 Bauhinia Street, Highveld Techno Park,Centurion, Pretoria, South Africa.Postal Address: PO Box 76575, Wendywood, 2144,South AfricaTelephone: +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, WA6151, AustraliaTelephone: +61 (0)8 9367 5211Facsimile: +61 (0)8 9367 5233Email: info@aquariusplatinum.com
For further information please visit www.aquariusplatinum.com or contact:
In AustraliaWilli Boehm+61 (0) 8 9367 5211
In the United Kingdom and South Africa
Gavin Mackay
gavin.mackay@aquariusplatinum.com
+ 44 7909 547 042GlossaryA$ Australian Dollar Aquarius Aquarius Platinum Limited 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. Fivemetallic 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