AQP.L Regulatory News (AQP)

AQUARIUS PLATINUM LIMITED - Production Results to 31 December 2015

PR Newswire

London, January 28

AQUARIUS PLATINUM LIMITED

Production Results to 31 December 2015

Highlights

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

Both Kroondal and Mimosa produced ahead of guidance and at reduced costs during the quarter. Kroondal’s production performance deserves particular mention as Q2 was Kroondal’s 12th consecutive quarter of higher than 105 000 PGM quarterly production and H1 production was highest since 2007. The fact that both Kroondal and Mimosa’s PGM unit costs are lower today than 3 years ago despite steep increases in labour, electricity and other costs is testimony to excellent operational management for which Rob Schroder and Winston Chitando and their teams deserve credit. That said, the lower PGM prices experienced during the quarter impacted both Kroondal and Mimosa. In order to ensure sustainability in this macro environment (US$ PGM prices fell to the lowest level in more than a decade) further cost saving initiatives were implemented at Kroondal, and specifically Mimosa, which management expects to result in unit costs reducing further going forward.

In relation to the proposed Amalgamation between AQP and Sibanye, following the approval by AQP shareholders of the Amalgamation in general meeting on 18 January 2016, AQP continues to co-operate with Sibanye in fulfilling the remaining conditions precedent to the Amalgamation Agreement and AQP shareholders will be advised of any material progress in due course.

Production by mine attributable to Aquarius (Operating mines)

Average PGM basket prices achieved at Aquarius operations

Aquarius Group quarterly attributable production (PGM ounces) to 31 December 2015

See http://www.aquariusplatinum.com/ for graph

PGM markets update

Platinum price fell in the final months of the year, despite moving 9.8% higher across October, ending the quarter below the $900/oz level to finish at circa $877, a fall of 1.2% across the quarter. Palladium prices also moved lower across the period, falling significantly in November as the metal fell over 18%, stabalising across December to finish around the $562/oz level.

Macro concerns continued to impact the prices of precious metals with the main factors impacting demand across the month including: impact of the VW scandal and continued demand and supply concerns of the PGM complex in China.

The impact of the VW “dieselgate” scandal intially saw a decrease in the demand for Platinum and an increase in Palladium demand throughout late September. However, despite an initial rally for Palladium, gains were rapidly given back as Palladium prices fell through US$600/oz. The longer term implications of the VW issue remain somewhat unclear with either demand for Palladium increasing as the primary metal for gasoline catalysts, whilst diesel volume sales will determine the demand for Platinum as the dominant metal.

Supply in Platinum remained relatively robust and despite weaker US$ prices, the weakness in the rand and ruble also resulted in a softer fall in prices for the South African producers which in turn saw supply remain more resilient. Meanwhile demand looks set to grow for platinum but the pace of this growth is unclear. Autocats, which equate to circa 43% of platinum demand, look set to remain relatively resilient as the US continues the strong run, whilst threats include movement away from diesel engines following the VW scandal.

The rand has endured a torrid weakening run, this year, falling 34% across 2015 from the starting level of circa R11.55/US$1 and breaking through the R14/US$1 level in early November and continuing this trend.

Specific PGM prices commentary

The price of Platinum fell 1.2% over the quarter, finishing at $877/oz with an average price of $908/oz. Palladium moved down 13.8% to $563/oz with an average price of $617 over the quarter. Gold also reported negative gains across the quarter and reversed gains from the last quarter as it moved 4.8% lower, finishing at 1061/oz, with an average price of $1104/oz.

12 month individual PGM prices to 31 December 2015 (US$/oz)

12 month PGM basket prices to 31 December 2015 (US$ and ZAR per PGM basket ounce)

See http://www.aquariusplatinum.com/ for graphs

Operating Review Summary (all numbers on 100% basis)

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

P&SA1 at Kroondal (Aquarius Platinum – 50%)

Kroondal: Production, Cash Cost and Price Analysis

See http://www.aquariusplatinum.com/ for graph

Commentary

Kroondal:

The 3 month DIIR rate increased from 0.38 to 0.48 (two additional accidents in the current quarter) however the 12 month DIIR improved to 0.50 from 0.65. Seven Section 54 instructions were issued during the quarter.

Production at Kroondal for the quarter was down 3% to 1,873,000 tons quarter-on-quarter due to production challenges at Simunye and Kopaneng however was credibly up 4% compared to the previous corresponding quarter, December 2014 (pcp).

Kroondal achieved its twelfth consecutive +105,000 PGM production quarter. Unit costs in Rand terms continued to respond positively down 0.1% quarter on quarter and up 2% compared to the PCP in spite of South Africa’s inflation rate of approximately 6%.

Bambanani, K6 and Kwezi produced ahead of business plan. Kopaneng focussed on improving safety and showed a positive production improvement in the last month of the quarter. Simunye’s challenge with machine availability continued during the quarter and resulted in some structural changes in the machine maintenance methodology. The December break was used to complete additional maintenance and repairs to certain units in the fleet.

The raise bore hole at Kopaneng was holed, during the Quarter and equipping is expected to be completed in Quarter three. Both the other two raise bore holes scheduled for BP 16, at Simunye and Kwezi are on schedule with the piloting having been started at Simunye.

Grade declined for the quarter and management control systems were improved on to assist in the general management of ore quality delivered, these include waste management/ accounting and also real time Stope Width recording and reporting.

Although the plants managed to improve on recoveries, production for the quarter was down due to a section 54 issued against the K2 plant which resulted in AQPSA delivering reduced ounces for the quarter.

Operating cash costs per ounce

Unit cash cost per PGM ounce in Dollar terms (before by-product credits) was 9% lower quarter-on-quarter mainly due to the weaker Rand which depreciated 10% quarter-on-quarter. Dollar unit cash costs compared to the pcp were 19% lower due to a 26% weakness in the Rand.

In Rand terms, Kroondal's unit costs for the three months to 31 December 2015 were 0.1% lower and only increased 2% compared to the pcp. This is a very credible performance with operating costs contained below inflationary levels of approximately 6% for the third consecutive year.

Kroondal mine: reconciliation of cash costs per 4E ounce

MIMOSA INVESTMENTS (Aquarius Platinum – 50%)

Mimosa: Production, Cash Cost and Price Analysis

See http://www.aquariusplatinum.com/ for graph

Safety, Health and Environment

Regretfully subsequent to the end of the quarter an employee was fatally injured whilst working underground on 4 January 2016. There were no other injuries.

Operations

Operating cash costs per ounce

Unit cash cost per PGM ounce (before by-product credits) were 3% below the previous quarter. In response to the sharply lower metal prices, Mimosa implemented a number of significant cost cutting initiatives during the quarter which will result in operating costs reducing significantly in H2.

Capital expenditure

Total capital expenditure for the second quarter amounted to $10.8 million. Expenditure was incurred mainly on mobile equipment, support & drill rigs and LHDs, the conveyor belt extension, down dip development and ventilation walls.

Mining operations

Mimosa mine operated very well during the quarter, with cordial industrial relations and meeting most of its production targets. A total of 651,629 tonnes of ore were blasted for the quarter under review with blasted grades of 1.910g/t Pt. and 0.158% Ni. The blasted tonnage represents a 2.7% increase compared to the previous quarter’s 634,396 tonnes. Most teams mined through poor ground conditions during the quarter resulting in preparation constraining the ore generation cycle.

Hoisted tonnage for the quarter at 656,844 tonnes was 0.4% above previous quarter`s tonnage of 654,127 tonnes. Hoisting performance is expected to improve in line with the anticipated improvement in the amount of blasted ore.

Processing plant

The milled tonnage for the second quarter at 638,652Mt was 5% below the 671,507Mt achieved in the previous quarter. Tonnes milled were lower in the quarter as a result of plant stoppages associated with the rainy season mainly lightning which often results in power dips as well as a breakdown of the plant mill motor.

At 79.1% platinum recovery was slightly less than the 79.2% achieved in the previous quarter with 4Es recovery at 78.6% slightly less than 78.7% achieved in the previous quarter. The Process Team continues to focus on initiatives to improve recoveries further.

15% Export Levy on un-beneficiated PGMs/ Deductibility of Royalties

In the 2016 National Budget presentation, the deferment of the VAT on un-beneficiated platinum to 1 January 2017 was confirmed. However, the subsequent Finance Bill and Finance Act of 2016 did not include the deferment. Management is continuing engagements to have the deferment gazetted in a Statutory Instrument that will give legal effect to the deferment.

Royalties

The 2016 National Budget was silent on the non-deductibility of royalties for income tax purposes.

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 2016 national budget and hence Mimosa continues to provide for royalties on a non-deductible basis in its financial statements. The financial impact of the non-deductibility of royalties for the six months ended December 2015 was US$1.7 million, 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

The Minister of Youth, Indigenisation and Economic Empowerment gazetted the frameworks, templates and procedures for implementing the indigenization policy on the 8th of January 2016. The proposed frameworks simply provide clarity on the indigenisation law and its implementation, and the Indigenisation Act remains unchanged.

Mimosa continues to interact with the Ministry of Indigenisation and Ministry of Mines to work towards a sustainable solution in relation to indigenisation.

TAILINGS OPERATION

Platinum Mile - PMR (Aquarius Platinum – 91.7%)

Anglo Platinum started the commissioning of their tailings re-treatment facility in the quarter. During the start-up feed from this section was understandably erratic and negatively impacted PMR's flotation stability and recoveries.

At the end of the quarter PMR had implemented feed stability through level and flow control utilizing UG2 feed to keep the flow to the rougher circuit constant and maximized, which management expects should impact recoveries positively.

Operating cash costs per ounce

MINES UNDER CARE AND MAINTENANCE

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

Given the continuing low Rand PGM basket prices, Marikana 4 shaft, the remaining operating shaft, and the processing plant at Marikana continue on care and maintenance until further notice.

Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum – 50%)

This operation remains on care and maintenance.

CORPORATE MATTERS

Convertible bonds

Aquarius Platinum Limited (Company) redeemed the outstanding Convertible Bonds which it issued in December 2009 (Convertible Bonds). The Convertible Bonds were redeemed at their principal amount outstanding of $125.4 million.

Update on Takeover Offer

Aquarius Platinum Limited shareholders approved the Amalgamation Agreement and Amalgamation on 18 January 2016. The approvals were a condition precedent to the transaction between the Company and Sibanye Gold Limited proceeding. The only outstanding regulatory approvals required for the transaction to proceed are those of the South African Competition Commission and the Competition Tribunal (refer section 1.9 of the Explanatory Memorandum of the Meeting Materials for further detail). Once these competition approvals have been obtained, a timetable of events leading up to the date for payment of the consideration will be announced to ASX, LSE and JSE and published on Aquarius’ website at www.aquariusplatinum.com.

Annual General Meeting

Aquarius Platinum Limited advise that the resolutions put to the meeting on 18 January 2016 were carried by the requisite majority.

Statistical information: Kroondal P&SA1

See http://www.aquariusplatinum.com/ for statistical information

Statistical information: Mimosa

See http://www.aquariusplatinum.com/ for statistical information

Statistical information: Platinum Mile

See http://www.aquariusplatinum.com/ for statistical information

Issued capital

At 31 December 2015, the Company had on issue: 1,508,344,873 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 5211

Facsimile: +61 (0)8 9367 5233

Email: info@aquariusplatinum.com

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