Wrap Text
AQP - Aquarius Platinum Limited - Financial and production results to 31 March
2012
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1284
FINANCIAL AND PRODUCTION RESULTS TO 31 MARCH 2012
Highlights
- Average PGM Dollar prices increased in the quarter - platinum and palladium
rose 5% and 8% respectively while rhodium fell 8%
- The Rand strengthened against the US Dollar by 4% on average quarter-on-
quarter
- Attributable production for the third quarter decreased by 7% quarter-on-
quarter to 97,802 4E ounces
- Seasonal absenteeism, continuing Section 54 safety stoppages, labour "go-
slows" and poor ground conditions negatively impacted South African production
- Net loss of US$9.4 million recorded on reduced production
- Cash balance at quarter end US$207 million
- New commercial arrangement reached with principal mining contractor, closer
to a cost-target basis and better aligning interests of both parties
Q3 2012 Operating Results Summary
Kroond Marika Everes Mimosa CTRP Plat.
al na t Mile
4E PGM
Production
Total (100% 76,935 26,405 15,926 52,053 1,413 3,474
basis)
Attributable 38,467 13,203 15,926 26,026 707 3,474
4E Basket
Price
R/oz 10,312 10,387 10,240 - 10,954 10,249
$/oz 1,321 1,330 1,311 1,199 1,425 1,338
Cash Costs
(4E basis)
R/oz 8,965 10,538 13,474 - 6,272 6,163
$/oz 1,148 1,350 1,726 796 803 782
Cash Margin 9 -5 -27 31 34 25
(%)
Stay-in-
Business
Capex
R/oz 941 982 1,132 1,829 - 115
$/oz 120 126 145 235 - 15
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said:
"The first quarter of the calendar year is always a difficult one, due largely
to seasonal absenteeism following the Christmas and New Year holidays. This year
was worse than usual, with the customary poor labour performance and concomitant
reduced number of shifts exacerbated by continuing Section 54 interference in
our Rustenburg operations. At Everest, poor ground conditions have not been
helped by constant labour "go-slows" and the failure by the DMR to grant the
mining right to the Hoogland open pit, despite our application being lodged over
a year ago. These unnecessary operational and regulatory headwinds are occurring
against a backdrop of a pricing environment that remains relentlessly tough,
with unabated on-mine cost inflation, little fundamental demand recovery and
continuing volatility in financial markets. The result is that margins are under
severe pressure throughout the industry, and it is my view that labour unions
and the government need to start co-operating constructively with mining
companies immediately if the very sustainability of the platinum industry and
the thousands of jobs it provides is not to be threatened.
There were some encouraging aspects to the quarter. A new and promising
commercial arrangement has been reached with our primary mining contractor, and
both tailings operations are now profitable. There does seem to be a decline in
the number and length of Section 54 stoppages, although it remains too early to
call it a trend. In Zimbabwe, Mimosa has continued to operate well despite power
supply disruption, and the mine is engaged in constructive discussions with the
Government over the final terms and structure of its compliance with the
Indigenisation Act.
We remain pragmatic about our business and the industry at large. Each asset in
our portfolio is required to generate a return to shareholders and to the extent
that they do not, we will take action as appropriate to ensure sustainability
and a return to profitability."
Production by mine
PGMs Quarter ended
(4E)
Mar 2012 Dec 2011 % Mar 2011 %
Change Change
Kroondal 76,935 86,796 -11 95,731 -20
Marikana 26,405 28,809 -8 23,927 10
Everest 15,926 18,712 -15 27,737 -43
Blue - - - 6,671 -
Ridge
Mimosa 52,053 50,456 3 51,255 2
CTRP 1,413 1,117 26 1,270 11
Platinum 3,474 3,328 4 10,095 -66
Mile
Total 176,206 189,218 -7 216,686 -19
Production by mine attributable to Aquarius
PGMs Quarter ended
(4E)
Mar 2012 Dec 2011 % Mar 2011 %
Change Change
Kroondal 38,467 43,398 -11 47,866 -20
Marikana 13,203 14,404 -8 11,963 10
Everest 15,926 18,712 -15 27,737 -43
Blue - - - 3,336 -
Ridge
Mimosa 26,026 25,228 3 25,628 2
CTRP 706 559 26 635 11
Platinum 3,474 3,328 4 5,048 -31
Mile
Total 97,802 105,629 -7 122,213 -20
Aquarius Group attributable production (PGM ounces) to 31 March 2012
Please refer to www.aquariusplatinum.com for the graph.
Aquarius Group attributable production (PGM ounces) by month to 31 March 2012
Please refer to www.aquariusplatinum.com for the graph.
Market Summary
Metals prices
The quarter began with the platinum price rising relatively steeply in Dollar
terms in response to supply issues in South Africa, as significant production
was lost as a result of both industrial action at a major producer and
continuing sector-wide safety stoppages. This improvement in Dollar pricing was
largely sentiment-driven, with investor perception of tightening platinum supply
coinciding with a consensus view that the threat posed by the European sovereign
debt crisis was receding. During January palladium prices fell, giving up value
to platinum which had arguably been oversold in prior periods. For the rest of
the quarter, platinum, palladium and rhodium traded in a similar pattern,
reaching a plateau in February as strong US economic data and global auto sales
offset fears of slowing Chinese growth. Sentiment soured in March, as focus
returned to Europe in the form of rising Spanish sovereign bond yields, and the
dollar prices of all the metals began to fall. Prices continued to be set
largely by ETF inflows and outflows. Fundamental industrial demand did not
improve, but did remain broadly stable.
The average platinum and palladium prices rose broadly in line quarter-on-
quarter, by 5% and 8% respectively. Rhodium fell by 8%, reflecting oversupply
and the lack of an investment market for the metal. Gold remained flat on
average. Platinum closed the quarter up 17% at $1,640 per ounce, while palladium
fell by 2% to $651 per ounce over the same period. The rhodium price finished
the period flat at $1,400 per ounce and gold rose 6% to $1,664 per ounce.
Rand-Dollar exchange rate
The average Rand-Dollar exchange rate strengthened during the quarter, rising by
4% from R8.10 to R7.76 to the US dollar. This was driven by relative Dollar
weakness in the face of a partial recovery in the Euro. The Rand closed the
quarter 5% stronger at R7.68 to the Dollar.
As always, Rand strength largely offset rises in Dollar metals prices. The
average Rand basket price remained broadly unchanged quarter-on-quarter, but
rose by 6% over the period. The US Dollar weighted average group basket price
increased by 1% to $1,289 per 4E PGM ounce compared to the previous quarter,
while the weighted average basket price at the South African operations was
$1,322 per PGM ounce. The average South African basket price was R10,327 per PGM
ounce for the period, a 1% improvement compared to the prior quarter.
12-month individual PGM prices 12-month PGM basket prices to
to March 2012 March 2012
(US$/oz) (US$ and ZAR per PGM basket
ounce)
Please refer to Please refer to
www.aquariusplatinum.com for www.aquariusplatinum.com for
the graph. the graph.
12-month Rand-Dollar exchange rate to March 2012
(ZAR/US$)
Please refer to www.aquariusplatinum.com for the graph.
Average PGM basket prices achieved at Aquarius operations
US$ per Quarter ended
PGM
ounce
(4E)
Mar 2012 Dec 2011 % Mar 2011 %
Change Change
Kroondal 1,321 1,262 5 1,559 -15
Marikana 1,330 1,277 4 1,549 -14
Everest 1,311 1,259 4 1,526 -14
Blue - - - 1,548 -
Ridge
Mimosa 1,199 1,303 -8 1,365 -12
CTRP 1,425 1,296 10 1,674 -15
Platinum 1,338 1,208 11 1,493 -10
Mile
Weighted 1,289 1,272 1 1,465 -12
Avg.
Financials
Aquarius recorded a net loss of $9.4 million for the quarter ended March 2012, a
decrease of $34.7 million compared to the previous corresponding period (pcp),
March 2011. On-mine EBITDA of $2.2 million was also lower compared to $76.6
million in the pcp. The decrease in on-mining earnings was driven by lower
production, down 18% on the pcp and lower PGM basket prices, also down 18%
compared to the pcp.
EBITDA, Profit & Production Comparison by corresponding quarters
Quarter Quarter Movement
ended ended
March 2012 March 2011
EBITDA $2.2M $76.6M ($74.4M)
Forex gain / (loss) $1.8M ($7.6M) $9.4M
Net profit (loss) after ($9.4M) $25.3M ($34.7M)
tax
Revenue $124.8M $183.0M ($58.2M)
PGM ozs production (in 97,802 118,877* (21,075)
operation)
Average PGM basket $1,251 $1,519 ($268)
price per ounce
achieved
* excludes PGM ounces of Blue Ridge production capitalised.
On-mine EBITDA for the quarter of $2.2 million was negatively impacted by on-
going weakness in PGM basket prices and lower than expected PGM production. Both
of these factors have a material impact on margins, particularly mining costs
which are largely fixed in nature and as such impact adversely on unit costs
when production falls.
Revenue (PGM sales and including interest income of $2.4 million) was down 32%
to $124.8 million from $183.0 million in the pcp. Lower revenue received was due
to lower revenue achieved per PGM ounce of $1,251 compared to $1,519 in the pcp
as well as lower PGM production, down 18% compared to the pcp.
Quarter ended
Mar `11 June`11 Sep `11 Dec`11 Mar `12
Revenue $174.5m $164.6M $151.3M $125.6M $121.9m
PGM sales $8.5m ($0.9M) ($6.7M) ($17.9M) $2.9m
adjustments
Total revenue $183.0m $163.7M $144.6M $107.7M $124.8m
Group gross cash margins decreased to 8.1% from 40.1% in the pcp due to a
combination of lower production which impacts materially on the ability to
spread fixed mining costs, inflationary pressures and low PGM metal prices.
Production for the quarter was 18% lower at 97,802 PGM ounces from 118,887 PGM
ounces in the pcp. The decrease in production was attributable to on-going
section 54 work stoppages and labour absenteeism. The high level of fixed costs
involved in the mining contract has as such translated into higher unit costs
during this period of lower production.
Quarter ended
Attributable Mar `11 June`11 Sep `11 Dec`11 Mar `12
ounces
4PGE production 118,877 112,750 109,828 105,629 97,802
Blue Ridge 3,336 1,510 - - -
Total 122,213 114,260 109,828 105,629 97,802
production
Total cash cost of production was 5% higher at $114.7 million compared to the
pcp despite an 18% decrease in PGM production. On a unit cost basis (PGM ounce),
costs at the South African operations in Rand terms were 12.1% higher
quarter-on-
quarter and 23.4% higher compared to March 2011. In Dollar terms, overall group
unit costs increased 7.9% quarter-on-quarter and 14.6% compared to March 2011.
Increased unit costs quarter-on-quarter generally reflects inflationary
pressures and the impact of the fixed nature of mine costs measured against
lower production levels for the quarter. The varying degrees of cost increases
measured in differing currencies (Rand versus Dollars) reflects exchange rate
movements over the period.
Amortisation and depreciation was lower at $12.7 million in line with lower
production compared to the pcp.
Administrative costs of $2.3 million were in line with quarterly trends. Finance
costs for the quarter include interest paid on borrowings $4.5 million, non-cash
interest accretion on convertible bond $2.5 million and unwinding of the
rehabilitation provision $1 million.
Group cash remained strong at $207 million at the end of the quarter.
Net operating cash outflow for the quarter of $17.5 million comprised $100
million inflow from sales, $117 million paid to suppliers, income tax paid $3
million and interest received of $2 million. Development and capital expenditure
for the quarter was $14.3 million with net financing cash inflows of $1 million
comprising interest payments of $4 million offset by a new short term bank loan
at Mimosa of $5 million.
Group cash at 31 March 2012 was held as follows:
AQP $ 178 million
AQPSA $ 11 million
ACS(SA) $ 2 million
Mimosa $ 10 million
Platmile $ 4 million
Ridge Mining $ 2 million
Total $ 207 million
Aquarius Platinum Limited
Consolidated Income Statement
Quarter ended 31 March 2012
$`000
Quarter Nine Financial
Ended Months Year Ended
Ended
Note 31/03/12* 31/03/12* 30/06/11
PGM Production from 97,802 313,254 483,358
operating mines
Blue Ridge - - 4,046
Total production 97,802 313,254 487,404
Revenue (i) 124,764 377,145 682,859
Cost of sales (including (ii) (127,423) (400,375) (507,728)
D&A)
Gross (loss)/profit (2,659) (23,230) 175,131
Other income 206 1,315 1,764
Administrative costs (iii) (2,348) (9,744) (13,030)
Foreign exchange (iv) 1,800 (89,488) 60,068
gain/(loss)
Finance costs (v) (8,380) (25,964) (30,945)
Impairment losses (vi) - - (159,779)
Settlement of contractor (vii) - - (7,810)
dispute
(Loss)/profit before (11,381) (147,111) 25,399
income tax
Income tax (viii) 2,001 24,238 (35,795)
benefit/(expense)
Net (loss)/profit (9,380) (122,873) (10,396)
Net (loss)/profit is
attributable to:
Equity holders of (9,376) (122,868) (10,396)
Aquarius Platinum
Limited
Non-controlling (ix) (4) (5) -
interests
(9,380) (122,873) (10,396)
Earnings per share
Basic (loss)/earnings (1.39) (26.32) (2.25)
per share (cents per
share)
* Unaudited
Notes on the March 2012 Consolidated Income Statement
(i)Revenue decrease reflects lower production and lower prices compared to the
pcp.
(ii)Cost of sales: unit cash costs per PGM ounce increased 12.1% in South Africa
in Rand quarter-on-quarter and 23.4% compared to March 2011. Movements in US
Dollar terms differed due to exchange rates prevailing at the time. Unit costs
increased 7.9% quarter-quarter and 14.6% compared to March 2011.
(iii)Administration and other costs of $2 million are in line with previous
periods.
(iv)Forex gain is attributable to revaluation adjustments on intergroup debt,
cash balances held in Rand, Australian dollars and Pound Stirling, and the
revaluation of pipeline debtors following the weakening of the Rand against the
US Dollar.
(v)Finance costs include interest paid on borrowings $4.5 million, non-cash
interest accretion on convertible bond $2.5 million and unwinding of the
rehabilitation provision $1 million.
(vi)Impairment losses relating to the Blue Ridge mine which has ceased
operations
(vii)Settlement payment of the contractor dispute between Moolman Mining and
AQPSA pursuant to an agreement of settlement signed in August 2010, in full and
final settlement of all disputes and claims between the parties.
(viii)Income tax benefit includes a $4 deferred tax credit offset by $1 million
normal tax and $1 million withholding tax.
(ix)Reflects the 8.3% non-controlling interest of Platinum Mile Resources (Pty)
Ltd. Following the acquisition of an additional 41.7% during the 9 months to
March 2012, the Group now holds 91.7% and controls Platinum Mile Resources (Pty)
Ltd.
Aquarius Platinum Limited
Consolidated Statement of Cash Flows
Quarter ended 31 March 2012
$`000
Quarter Nine Financia
Ended Months l Year
Ended Ended
Note 31/03/12 31/03/12 30/06/11
* *
Net operating (i) (17,516) 7,431 162,311
cash
(outflow)/inflow
Net investing (ii) (14,279) (209,908
cash outflow (83,499) )
Net financing cash (iii) 837 (33,513)
inflow/(outflow) (33,527)
Net decrease in (30,958) (109,581 (81,124)
cash held )
Opening cash 230,127 328,083 381,734
balance
Exchange rate 7,609 (11,724) 27,473
movement on cash
Closing cash 206,778 206,778 328,083
balance
* Unaudited
Notes on the March 2012 Consolidated Statement of Cash Flows
(i)Net operating cash flow for the March quarter includes $100 million inflow
from sales, $117 million paid to suppliers, interest received of $2 million and
income tax paid of $3 million.
(ii)Includes development and plant and equipment expenditure on AQPSA and
Mimosa.
(iii)Includes interest paid of $4 million, offset by bank loan funding of $5
million received by Mimosa.
Aquarius Platinum Limited
Consolidated Balance Sheet
At 31 March 2012
$`000
$`000
Note As at As at
31/03/12* 30/06/11
Assets
Cash assets 206,778 328,083
Current receivables (i) 109,122 108,395
Other current assets (ii) 49,661 44,747
Property, plant and (iii) 283,429 325,763
equipment
Mining assets (iv) 462,334 480,634
Intangibles (v) 94,994 77,989
Other non-current (vi) 92,194 91,735
assets
Total assets 1,298,512 1,457,346
Liabilities
Current liabilities (vii) 121,081 120,549
Non-current payables (viii) 5,795 6,150
Non-current interest- (ix) 262,210 257,599
bearing liabilities
Other non-current (x) 182,244 221,711
liabilities
Total liabilities 571,330 606,009
Net assets 727,182 851,337
Equity
Issued capital 23,516 23,509
Reserves 722,156 711,182
Retained earnings (24,836) 116,646
Total equity 720,836 851,337
attributable to
equity holders of
Aquarius Platinum
Limited
Non-controlling (xi) 6,346 -
interests
Total equity 727,182 851,337
* Unaudited
Notes on the March 2012 Consolidated Balance Sheet
(i)Reflects debtors receivable on PGM concentrate sales
(ii)Reflects PGM concentrate inventory, consumables, stores and critical spares.
(iii)Represents plant and equipment within the Group
(iv)Includes group`s mining assets at Kroondal, Marikana, Mimosa, Everest, Blue
Ridge, CTRP and Platmile
(v)Includes intangibles relating to contract value acquired on the acquisition
of equity interest in Platinum Mile Resources (Pty) Ltd.
(vi)Includes the recoverable portion of rehabilitation provision from Anglo
Platinum of $13 million, receivable from the Reserve Bank of Zimbabwe (RBZ) of
$28 million, receivable from outside shareholders of Blue Ridge and Sheba`s
Ridge of $30 million, investments in rehabilitation trusts of $18 million and
investments held for resale of $3 million.
(vii)Includes trade creditors of $81 million, DBSA and IDC bank loans in Blue
Ridge of $39 million and provision for annual leave of $1 million.
(viii)Includes rehabilitation obligations on P&SA1 and P&SA2 structures.
(ix)Includes convertible bonds of $254 million and AQPSA / Blue Ridge lease
facilities of $8 million.
(x)Includes deferred tax liabilities $116 million and provision for closure
costs $66 million.
(xi)Reflects the 8.3% non-controlling interest of Platinum Mile Resources (Pty)
Ltd. Following the acquisition of an additional 41.7% during the 9 months to
March 2012, the Group now holds 91.7% and controls 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 1.08 per 200,000 man hours
from 0.78 in the previous quarter
- Production decreased to 1,273,000 tonnes
- 7% fall in planned production due to Section 54 stoppages
- Head grade improved from 2.37 g/t to 2.39 g/t
- Recoveries improved by 1%
- Volumes processed decreased to 1,282,000 tonnes
- Stockpiles at the end of the quarter totalled approximately 19,000 tonnes
- PGM production decreased by 11% to 76,935 PGM ounces
- Revenue improved by 18% to R755 million quarter-on-quarter due to a
positive sales adjustment
- Mining cash costs increased by 9% to R538 per tonne, and costs per PGM
ounce by 7% to R8,965
- Kroondal`s cash margin for the period improved from -14% to 9%
P&SA2 at Marikana (Aquarius Platinum - 50%)
- 12-month rolling average DIIR deteriorated to 0.50 per 200,000 man hours
from 0.33 in the previous quarter
- Production decreased by 6% to 497,000 tonnes, all from underground
operations
- Head grade decreased by 6% to 2.20 g/t
- Recoveries increased by 1% to 74%
- Volumes processed decreased by 4% to 503,000 tonnes
- PGM production decreased by 8% to 26,405 ounces
- Revenue increased by 21% to R266 million quarter-on-quarter despite lower
volumes, due to slightly higher basket prices which resulted in a positive sales
adjustment of R27 million
- Mining cash costs increased by 5% to R553 per tonne, and costs per PGM
ounce by 11% to R10,538
- Marikana`s cash margin increased from -24% to -5%
Everest Mine (Aquarius Platinum - 100%)
- 12 month rolling DIIR deteriorated to 2.01 per 200,000 man hours from 1.71
in the previous quarter
- Production decreased by 3% to 305,000 tonnes
- Head grade deteriorated from 2.27 g/t to 2.10 g/t
- Recoveries deteriorated to 79%
- Volumes processed decreased by 6% to 297,000 tonnes
- PGM production decreased by 15% to 15,926 PGM ounces
- Revenue increased by 21% compared to the previous quarter to R169 million
- Mining cash costs increased by 11% to R722 per tonne, and costs per PGM
ounce increased by 23% to R13,474
- Everest`s cash margin improved from -46% to -27%
Commentary
Kroondal and Marikana: The quarter under review was severely impacted by a
reduction in the number of production shifts in January, caused by seasonal
absenteeism relating to the Christmas and New Year holidays, together with
further Section 54 safety stoppages ("S54s") issued to the two mines. A total of
eight S54s were issued at the Rustenburg operations during the quarter,
resulting in the loss of 15 production days. The negative impact of these mining
stoppages was exacerbated by the loss of five processing days as a result of a
S54 which was issued to the K2 Processing Plant.
During the quarter an additional five mechanised support drill rigs were
delivered, bringing the total number of such rigs operating at Kroondal to nine.
As previously stated, hanging wall support by means of cable anchors will be
rolled out in stages as and when the required drill rigs are delivered.
Implementation of the new support system is still proving problematic and
disruptive to the mining cycle. Management continues to strive to improve the
implementation of the regime.
At Marikana, the M5 Shaft project and the Siphumelele (Bleskop) shaft were
placed on care and maintenance on 27 March 2012 until further notice, as a
result of the current low Rand basket prices.
Everest: As with Kroondal and Marikana, absenteeism and the associated loss of
production shifts negatively impacted production. The mine also suffered further
"go-slows" at the hands of labour and the AMCU union, and the DMR still has yet
to issue a mining licence for the Hoogland open pit, despite AQPSA having
applied over a year ago. Both of these factors will continue to negatively
impact on Everest`s performance. In addition, mining at Everest is approaching
surface, with the result that ground conditions are deteriorating due to
weathering, which is continuously impacting production. Mining at several panels
had to be stopped for safety reasons due to poor ground conditions during the
quarter. This is expected to improve as the shallower areas are mined out.
The lower achieved head grade is related to the poor ground conditions, as the
majority of tons are currently being mined in the northern portions of the
eastern part of the mine. A number of mining crews are now being moved to
different areas in order to improve the mining mix.
Everest was deliberately restricted during the quarter in order to align it with
the revised short term steady state production plan. Poor performance from the
mining crews during this process is being addressed through a crew training
initiative, aimed at addressing the alignment between the three shifts and
optimising the mining cycle. Management is also considering the optimal manner
in which to integrate the Buttonshope (Booysendal South) property into the
Everest operation and bring it into production. The alternatives are either to
continue mining and developing concurrently, or to or cease mining and expedite
development so that full capacity is achieved earlier at the expense of ounce
production for a 12-18 month period. In the case of the latter option, loss of
current production is broadly value neutral given the current PGM price
environment.
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 8,965 7,348 7,210
Marikana 10,538 8,641 8,414
Everest 13,474 11,157 10,853
Capital expenditure
Kroondal Marikana Everest
(R`000 unless Total Per 4E Total Per 4E Total Per 4E
otherwise stated) oz oz oz
Ongoing 39,385 512 25,904 981 17,290 1,086
Infrastructure
Establishment
Project Capital 33,031 429 20 1 741 47
Mobile Equipment 30,470 396 5,127 194 89 6
Total 102,885 1,337 31,051 1,176 18,121 1,138
The project capital at Kroondal is being incurred on the K6 shaft project, which
is a replacement shaft scheduled for first production in June 2013, with reef
intersection anticipated in June 2012.
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 0.18 per 200,000 man hours
- Production decreased by 7% to 540,184 tonnes
- Head grade improved slightly to 3.66g/t
- Recoveries deteriorated to 77%
- Volumes processed increased by 4% to 577,691 tonnes
- Stockpiles at the end of the quarter totalled approximately 144,510 tonnes
- PGM production increased by 3% to 52,053 PGM ounces
- Revenue decreased by 15% to US$58.8 million due to lower metal prices
achieved during the quarter
- Mining cash costs increased by 7% to US$72 per tonne, and costs per PGM
ounce by 8% to $796
- Stay-in-business capital expenditure was $235 per PGM ounce for the quarter
- Mimosa`s cash margin for the period fell from 49% to 31% due to lower
revenue
Commentary: The Mimosa mine itself continues to operate well. However, as with
every other mine in Zimbabwe, the mine was affected by the following economic
and regulatory issues:
Power
Mining operations were adversely affected by load shedding during the quarter.
The load shedding was caused by limited electricity imports to supplement the
low domestic electricity generation capacity, as referred to in the last
quarterly report. Local power generation continues to require augmenting by
imports from Hydro Cabhora Basa (HCB) of Mozambique, which has threatened to cut
off supply to ZESA for long outstanding arrears. Discussions are ongoing with
ZESA and HCB to finalize a structure in which Mimosa will assist in clearing the
amount owed to HCB in return for uninterrupted power supply. These discussions
are now at an advanced stage and are targeted to be finalized during the next
quarter of 2012.
Mining Fees
As reported in the last quarterly report, discussions are still ongoing between
the Chamber of Mines and the relevant authorities concerning the issue of
increased mining fees. It is hoped that the discussions will result in reduced
and sustainable mining fees. If the proposed fees are implemented, this would
have a significant negative impact on operating costs.
Offshore accounts
Mimosa formerly operated offshore accounts domiciled in London and Mauritius.
Mimosa has now complied with the directive by the Reserve Bank of Zimbabwe
requiring all companies to localise offshore accounts in Zimbabwe. To date this
has not negatively impacted the mine`s operations. Payments, including foreign
outflows, have continued to be processed smoothly.
Indigenization
Subsequent to the directive issued by the Minister of Indigenization in February
2012, further discussions have been held concerning Mimosa`s proposed
indigenization plan, and Mimosa has indicated its willingness in principle to
comply with the Zimbabwean law that requires 51% local ownership. Discussions
are now focused on agreeing issues to do with shareholder structure, valuation
and funding of the share transactions.
Taxes and Government Royalties
Royalties for gold and platinum were increased with effect from 1 January 2012
to 7% and 10% of revenue respectively, putting more pressure on costs. Corporate
tax has remained at 25%. Review of the Income Tax Act is still underway and is
expected to be finalised during the second half of the calendar year.
Operating cash costs per ounce
Unit cash costs per PGM ounce (before by-product credits) were 8% higher than
those achieved in the previous quarter mainly due to ZESA load shedding during
the period, as well as the increase in gold and platinum royalties. Management
will continue to prioritise cost management in order to operate within budget.
4E(Pt+Pd+Rh+Au) 6E(Pt+Pd+Rh+Ir+Ru+Au) 4E net of by-
products
(Ni, Cu & Co)
Mimosa 796 753 461
Capital Expenditure
The total capital expenditure for the third quarter declined from $17m to $12m
due to the near completion of most projects, in keeping with management
expectations. The major projects running during the quarter constituted more
than 75% of this expenditure, and these were the Conveyor Belt Extension, the
Drill Rigs Front End Replacements, Down Dip Development, Drill Rig Replacements,
LHD Replacements and the Housing Project.
TAILINGS OPERATIONS
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum - 50%)
- Material processed increased 5% to 90,000 tonnes
- Head grade decreased to 2.77 g/t
- Recoveries increased by 29% to18%
- Production increased to 1,413 PGM ounces
- Cash costs decreased by 44% to R6,272 per PGM ounce
- Revenue was R12 million for the quarter
- CTRP`s cash margin for the period was 25%, an increase from -80% in the
previous quarter
Platinum Mile (Aquarius Platinum - 91.7%)
- Material processed decreased 23% to 1.014 million tonnes
- Head grade marginally increased to 0.52 g/t
- Recoveries increased to 21%
- Production increased to 3,474 PGM ounces, all of which is now attributable
to Aquarius as Platinum Mile is consolidated
- Cash costs decreased by 3% to R6,163 per PGM ounce
- Revenue was R29 million for the quarter
- The cash margin for the period was 25%, an increase from 8% in the previous
quarter
Commentary
CTRP: The plant modifications and improvements referred to in the previous
quarterly report have resulted in positive cash margins being generated for the
current quarter. Metallurgical testwork is currently being performed to evaluate
the effects of grinding on recoveries.
Platinum Mile: Improved recoveries and lower costs during the quarter have
contributed to the achievement of increased cash margins despite lower
processing volumes. The feasibility study to evaluate the viability of pumping
Kroondal tailings for treatment at the operation is progressing and will be
finalised during the next quarter.
Operating cash costs per ounce
4E(Pt+Pd+Rh+Au) 6E(Pt+Pd+Rh+Ir+Ru+Au) 4E net of by-
products
(Ni, Cu& Co)
CTRP 6,272 5,956 5,779
Platinum 6,163 5,313 4,676
Mile
Statistical Information: Kroondal P&SA1
Please refer to www.aquariusplatinum.com for the Statistical Information.
Statistical Information: Marikana P&SA2
Please refer to www.aquariusplatinum.com for the Statistical Information.
Statistical Information: Everest
Please refer to www.aquariusplatinum.com for the Statistical Information.
Statistical Information: Mimosa
Please refer to www.aquariusplatinum.com for the Statistical Information.
Statistical Information: Chrome Tailings Retreatment Plant
Please refer to www.aquariusplatinum.com for the Statistical Information.
Statistical Information: Platinum Mile
Please refer to www.aquariusplatinum.com for the Statistical Information.
CORPORATE MATTERS
Update on Zimbabwean Indigenisation
Mimosa has confirmed its willingness to sell 51% of its shares to Zimbabwean
entities and thereby to comply with the law requiring 51% local ownership of
foreign-owned companies. The Government of Zimbabwe appears to be satisfied with
this confirmation in principle, and ongoing discussions are now focused on
arriving at a detailed and mutually acceptable agreement on the shareholder
structure, valuation and funding of the proposed share transactions. Further
announcements will follow as progress is made.
Update on Contractor Arrangements
A new commercial arrangement has been concluded with the primary mining
contractor in South Africa, which better aligns the interests of the contractor
with AQPSA`s Key Performance Indicators. The contract operates on a cost-target
basis, with upside and downside caps for the contractor. This arrangement has
been entered into for a six month trial period and is expected to improve the
performance of the South African operations over time.
Asset Updates
Buttonshope (Booysendal South): All but one of the conditions precedent for the
completion of the purchase of Booysendal South have been fulfilled. The final
remaining condition is the Section 102 approval for final transfer, which is
expected by October 2012. This process remains on track although final timing is
in the hands of the DMR.
Blue Ridge: There have been no material developments at Blue Ridge, and the mine
remains on care and maintenance. Aquarius is a co-senior lender to Blue Ridge,
and continues to work with the other senior lenders, the IDC and the DBSA, to
resolve the issue of Blue Ridge`s outstanding debt.
Appointment of Mr. Jean Nel to the Board of Aquarius Platinum Limited
Jean Nel was appointed as an executive director of Aquarius shortly after the
quarter end. Mr. Nel joined Aquarius in 2011 and was appointed to the board of
its South African operating subsidiary, AQPSA, as Commercial Director in January
2012. Mr. Nel has been active in the Southern African mining and resources
sector since 1999. Mr. Nel qualified as a CA (SA), obtained the CFA (AIMR)
qualification and also completed the Advanced Management Programme at Insead.
More information on all corporate matters can be found at
www.aquariusplatinum.com
Aquarius Platinum LimitedIncorporated in Bermuda
Exempt company number 26290
Board of Directors
Nicholas Sibley Non-executive Chairman
Stuart Murray Chief Executive OfficerJean 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
Zwelakhe Mankazana Non-executive
Audit/Risk Committee
Sir William Purves (Chairman)
David Dix
Edward Haslam
Kofi Morna
Nicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)
David Dix
Zwelakhe Mankazana
Nicholas Sibley
Nomination Committee
The full Board comprises the Nomination Committee
Company Secretary
Willi Boehm
AQP Management
Jean Nel Executive: Commercial
Gavin Mackay Executive: Business Development & Communications
AQPSA Management
Stuart Murray Executive Chairman
Anton Lubbe Managing DirectorMkhululi Duka Director:
Human Resources & Transformation
Jean Nel Director: Commercial
Helene Nolte Director: Finance
Robert Schroder Director: Projects
Abraham van Ghent Senior General Manager: Operations (Acting as GM:
Everest)
Graham Ferreira General Manager: Group Admin & Company Secretary
Wessel Phumo General Manager: Kroondal
Augustine Simbanegavi General Manager: Marikana
Jan Hattingh General Manager: Engineering
Mimosa Mine Management
Winston Chitando Managing Director
Herbert Mashanyare Technical Director
Peter Chimboza Resident Director
Fungai Makoni General Manager Finance & Company Secretary
Platinum Mile Management
Richard Atkinson Managing Director
Paul Swart Financial Director
Issued Capital to be updated Anne
At 31 March 2012, the Company had in issue: 470,312,578 fully paid common shares
and 120,000 unlisted options.
Substantial Shareholders 31 Number of Percentage
March 2012 Shares
Savannah Consortium 61,754,371 13.13
JP Morgan Nominees Australia 54,170,927 11.52
Limited
HSBC Custody Nominees 41,803,423 8.89
(Australia) Limited
National Nominees Limited 33,881,525 7.20
Main Australian Securities Trading Information
Listing: Exchange (AQP.AX)
Secondary London Stock Exchange ISIN number
Listing: (AQP.L) BMG0440M1284
Secondary JSE Limited (AQP.ZA) ADR ISIN number
Listing: US03840M2089
Convertible Bond ISIN
number XS0470482067
Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE)
Liberum Capital Euroz Rand Merchant Bank
LimitedCity Point, 1 SecuritiesLevel 18 (A division of
Ropemaker Street, Alluvion58 Mounts FirstRand Bank
London, EC2Y Bay Road, Perth WA Limited) 1
9HTTelephone: +44 6000Telephone: +61 Merchant Place Cnr
(0) 20 3100 2000 (0) 8 9488 1400 of Rivonia Rd and
Bank of America Fredman Drive,
Merrill Lynch2 King Sandton 2146
Edward StLondon, Johannesburg South
EC1A 1HQTelephone: Africa
+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)12 001 2001
Facsimile: +27 (0)12 001 2070
Aquarius Platinum Corporate Services Pty Ltd
100% Owned
(Incorporated in Australia)
ACN 094 425 555
Level 4, Suite 5, South Shore Centre, 85 The Esplanade, South Perth, WA 6151,
Australia
Postal Address: PO Box 485, South Perth, WA 6151, Australia
Telephone: +61 (0)8 9367 5211
Facsimile: +61 (0)8 9367 5233
Email: info@aquariusplatinum.com
For further information please visit www.aquariusplatinum.com or contact:
In Australia
Willi Boehm
+61 (0) 8 9367 5211
In the United Kingdom and South Africa
Gavin Mackay
gavin.mackay@aquariusplatinum.com
+ 44 7909 547 042
Glossary
$ United States Dollar
A$ Australian Dollar
Aquarius or AQP Aquarius Platinum Limited
APS Aquarius Platinum Corporate Services (Pty) Ltd
AQPSA Aquarius Platinum (South Africa) (Pty) Ltd
ACS(SA) AquariusPlatinum (SA) Corporate Services (Pty)
Ltd
BEE Black Economic Empowerment
BRPM Blue Ridge Platinum Mine
CTRP Chrome Tailings Retreatment
Operation.Consortium comprising Aquarius
Platinum (SA) (Corporate Services) (Pty)
Limited (ASACS), Ivanhoe Nickel and Platinum
Limited and Sylvania South Africa (Pty) Ltd
(SLVSA).
DIFR Disabling injury frequency rate -being the
number of lost-time injuries expressed as a
rate per 1,000,000 man-hours worked
DIIR Disabling injury incidence rate -being the
number of lost-time injuries expressed as a
rate per 200,000 man-hours worked
DME formerly South African Government Department
of Minerals and Energy
DMR South African Government Department of Mineral
Resources, formerly the DME
Dollar or $ United States Dollar
Everest Everest Platinum Mine
Great Dyke Reef A PGE bearing layer within the Great Dyke
Complex in Zimbabwe
g/t Grams per tonne, measurement unit of grade
(1g/t = 1 part per million)
JORC code Australasian code for reporting of Mineral
Resources and Ore Reserves
JSE JSE Limited
Kroondal Kroondal Platinum Mine or P&SA1 at Kroondal
LHD Load haul dump machine
Marikana Marikana Platinum Mine or P&SA2 at Marikana
Mimosa Mimosa Mining Company (Private) Limited
nm Not measured
PCP Previous corresponding period
PGE(s) (6E) Platinum group elements plus gold. Five
metallic elements commonly found together
which constitute the platinoids (excluding Os
(osmium)). These are Pt (platinum), Pd
(palladium), Rh (rhodium), Ru (ruthenium), Ir
(iridium) plus Au (gold)
PGM(s) (4E) Platinum group metals plus gold.Aquarius
reports the PGMs as comprising Pt+Pd+Rh plus
Au (gold) with the Pt, Pd and Rh being the
most economic platinoids in the UG2 Reef
PlatMile Platinum Mile Resources (Pty) Ltd
P&SA1 Pooling & Sharing Agreement between AQPSA and
RPM Ltd on Kroondal
P&SA2 Pooling & Sharing Agreement between AQPSA and
RPM Ltd on Marikana
R South African Rand
Ridge Ridge Mining Limited
Run of mine.The ore from mining which is fed
ROM 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
Date: 30/04/2012 09:05:52 Supplied by www.sharenet.co.za
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