Wrap Text
Third Quarter 2014: Financial and Production Results to 31 March 2014
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1284
Third Quarter 2014: Financial and Production Results to 31 March 2014
Highlights
- Revenue increased by 13% to $60 million (Q2 2014: $54 million) in line with higher prices
- Mine EBITDA increased 3 fold to $11 million (Q2 2014: $4 million)
- Group cash balance (excluding cash in joint venture entities) at quarter end $83 million (Dec 2013: $83 million)
- Cash held in joint venture entities $17 million (Dec 2013 $12 million) - 50% attributable to Aquarius
- Attributable production from operating mines remains ahead of guidance and was in line compared to the quarter ended
March 2013, quarter-on-quarter production decreased 4%
- Cash costs at Kroondal remain below inflationary targets increasing 5% for the nine months ended 31 March 2014
compared to the nine months ended 31 March 2013 (pcp) - quarter-on-quarter costs increased 9%
- Cash costs at Mimosa remain flat for the nine months ended 31 March 2014 compared to the pcp - quarter-on-quarter
costs increased 7%
- Surface stockpile at Mimosa increased – now 165,000 tonnes
- Average PGM basket price increased 2% quarter-on-quarter in Dollar terms, down 11% compared to the quarter ended
March 2013
- The Rand weakened against the US Dollar by 7% on average quarter-on-quarter – down 20% compared to pcp
Q3 2014 Operating Results Summary
Kroondal Mimosa Platinum Mile
4E PGM production
Total (100% basis) 107,818 51,907 289
Attributable 53,909 25,954 289
4E basket price
R/oz 12,764 12,810
$/oz 1,179 1,112 1,179
Cash costs (4E basis)
R/oz 9,376 27,084
$/oz 866 892 2,492
Cash margin (%) 21 26 (123)
Stay-in-business capex
R/oz 903
$/oz 83 114
Commenting on the results, Jean Nel, CEO Aquarius Platinum said:
During Q3 the company delivered a competent operational performance, Kroondal again delivered production ahead of
guidance and Mimosa in line with guidance, while costs at both operations continued to be well maintained at annual
increase rates below inflation (CPI). Kroondal in particular continued its good performance and recorded not only its highest
ever production for a third financial quarter (107,818 4E oz’s) which is traditionally a poor mining quarter due to the
Christmas break, but also delivered its 5 consecutive quarter in excess of 105,000 4E oz’s per quarter, a record performance
in Kroondal’s 10 year life. As always, credit for the operational performance is due to the operational management teams at
both Kroondal and Mimosa.
At corporate level, during the quarter Aquarius finalised the mechanics and terms of the restructure of Aquarius’ balance
sheet, details of which were announced post quarter end. The Board is particularly encouraged and appreciative of the level of
support from our largest shareholders who have indicated their support for the restructure. The Board and management team
take their responsibility as custodians of capital seriously, and management will resolutely continue its focus on disciplined
safety, production and cost management as the primary focus. Following the completion of the balance sheet restructure, and
depending on the metal price and industrial relations environment, Aquarius will carefully assess the merits of pursuing a number of smaller, incremental growth initiatives aimed at increasing production and lowering unit costs.
Whilst Aquarius’ operations have not been materially impacted by the industry wide strike (Plat Mile production has been
interrupted), the company shares the concerns expressed by the entire industry. The company also noted the muted metal
price reaction to in excess of 50% of primary platinum production being interrupted for more than a quarter of a year. This
further supports management’s focus on disciplined capital and cost management.
At company level, Aquarius management continues to focus on building sound relations with its work force and organised
labour representatives to maintain stability, but clearly Aquarius’ South African operations are not isolated and the risk of
industrial action remains foremost in our minds and a primary risk to manage.
Production by mine
Quarter ended
PGMs (4E)
Mar 2014 Dec 2013 % Change Mar 2013 % Change
Kroondal 107,818 110,303 (2) 105,027 3
Mimosa 51,907 55,586 (7) 51,611 1
Platinum Mile 289 1,583 (82) 3,152 (91)
Total 160,014 167,472 (4) 159,790 -
Production by mine attributable to Aquarius (Operating mines)
Quarter ended
PGMs (4E)
Mar 2014 Dec 2013 % Change Mar 2013 % Change
Kroondal 53,909 55,152 (2) 52,514 3
Mimosa 25,954 27,793 (7) 25,805 1
Platinum Mile 289 1,583 (82) 3,152 (91)
Total 80,152 84,528 (5) 81,471 (2)
Aquarius Group quarterly attributable production (PGM ounces) to 31 March 2014
Please refer to www.aquariusplatinum.com for the graph.
PGM markets update
The average third quarter platinum price posted a decent gain of 2.3% despite a reasonable degree of volatility
over the period primarily due to the supply losses caused by the widespread labour strife in South Africa. Whilst
platinum has performed well, it was outperformed by palladium among the PGMs, given that palladium prices
have recently reached their highest since late summer/early autumn 2013. Against the dim supply backdrop
South African listed palladium ETP holdings continued to build throughout the third quarter, with two funds
having been launched in March, while platinum ETP holdings have continued to scale all-time record highs.
The South African Rand remained under pressure during the first 3 months of 2014 on the back of macro
uncertainty in Europe and weaker growth data from China. Despite considerable intra-period volatility, the Rand
closed at R10.52, similar as at the start of the quarter.
China’s auto sales grew 17.8% year on year (y/y) in February, after a weak January (6% y/y) that was likely
affected by the Chinese New Year holiday. In the US, February auto sales also represented an improvement
compared to January (15.3M versus 15.2M). Consequent firming up of underlying demand for autocatalytic
converters provided support to PGM prices during the quarter.
Specific PGM prices commentary
The average platinum price increased by 2.3%, while palladium increased by 2.9% and lesser traded rhodium
increased by 11.8% quarter on quarter. Gold decreased by 1.6% on average. Platinum closed the quarter up 3.6%
at $1,418 per ounce, while palladium rose by 8.3% to $776 per ounce and rhodium rose by 15.9% to $1,130 over
the same period. Gold increased 6.5% to $1,284 per ounce.
Whilst PGM prices increased during the quarter, it should be noted that the Dollar basket prices for both
Kroondal and Mimosa have not increased substantially in nominal terms over the longer term. Since March 2007
(before the GFC) Kroondal’s Dollar basket prices decreased by 18% (its Rand basket price increased by 20% due
to Rand weakness) whilst Mimosa’s Dollar basket price increased by 12%.
12-month individual PGM prices to 31 March 2014
Please refer to www.aquariusplatinum.com for the graph.
12-month PGM basket prices to 31 March 2014
Please refer to www.aquariusplatinum.com for the graph.
12-month ZAR price to 31 March 2014 (ZAR/US$)
Please refer to www.aquariusplatinum.com for the graph.
Average PGM basket prices achieved at Aquarius operations
US$ per PGM Quarter ended
ounce (4E) Mar 2014 Dec 2013 % Change Mar 2013 % Change
Kroondal 1,179 1,145 3 1,315 (10)
Mimosa 1,112 1,126 (1) 1,247 (11)
Platinum Mile 1,179 1,117 6 1,335 (12)
Weighted Avg. 1,157 1,138 2 1,295 (11)
Financials
Aquarius recorded an on-mine EBITDA profit of $11.1 million for the quarter ended 31 March 2014. This represents an
increase in EBITDA of $7.3 million, a 190% increase compared to the previous quarter ended 31 December 2013. Whilst
production was marginally down from record levels at Kroondal, this quarter was the fifth consecutive quarter the Kroondal
mine achieved in excess of 105,000 PGM ounces of production, 50% of which is attributable to Aquarius.
EBITDA, Profit and Production Comparison:
Quarter ended
Nine
Mar Dec Sept months
2014 2013 2013 Mar 2014
EBITDA $11.1M $3.8M $6.3M $21.2M
Revenue $60.3M $53.5M $59.7M $173.5M
Share of profit/(loss) from joint venture entities (Mimosa & $1.8M $1.0M ($0.8M) $2.0M
Blue Ridge) (note a)
Aquarius Group - Net profit/(loss) after tax $0.2M ($13.8M) ($10.3M) ($23.9M)
note a:
Share of profit/(loss) from joint venture entities (Mimosa &
Blue Ridge) consists of:
EBITDA $8.5M $7.8M $5.3M $21.6M
Other expenses ($6.7M) ($6.8M) ($6.1M) ($19.6M)
Net profit/(loss) after tax contribution to Aquarius Group $1.8M $1.0M ($0.8M) $2.0M
Revenue (PGM sales, interest) for the quarter was $60 million, 13% higher compared to the previous quarter following higher
metal prices. The PGM basket price achieved for the quarter was $1,157 per PGM ounce, up 2% from the previous quarter.
Revenue from Mimosa which is included in "share of profit/(loss) from joint venture entities" was in line with the previous
quarter despite lower production.
Quarter ended
Kroondal & Platinum Mile Mar 2014 Dec 2013 Sep 2013 Jun 2013 Mar 2013
Revenue $56.2M $57.0M $59.4M $61.3M $64.0M
PGM sales adjustments $4.1M ($3.5M) $0.3M ($5.4M) $1.6M
Total revenue $60.3M $53.5M $59.7M $55.9M $65.6M
Mimosa & Blue Ridge (joint venture entities)
Revenue $31.5M $34.5M $33.5M $39.5M $35.3M
PGM sales adjustments - ($3.3M) ($5.3M) ($4.5M) ($0.4M)
Total revenue $31.5M $31.2M $28.2M $35.0M $34.9M
Production for the quarter remained strong and is within guidance despite a 4% decrease to 80,124 PGM ounces in the quarter. The reduction in production for the quarter comes off record levels of production being experienced at the Group's
mines and also takes into account very low production at Platmile, Aquarius' tailings retreatment plant that receives its feed
ore from the Amplats operations, which is currently impacted by labour disputes.
Production comparisons Quarter ended
Mar 2014 Dec 2013 Sep 2013 Jun 2013 Mar 2013
PGM production – Kroondal & Platmile 54,198 56,735 56,962 58,261 55,666
PGM production – Mimosa 25,954 27,793 26,525 28,584 25,805
Total attributable production (PGM oz) 80,152 84,528 83,487 86,845 81,471
Average PGM basket price per ounce achieved
Kroondal & Platinum Mile R12,757 R11,577 R11,815 R11,225 R11,674
Kroondal & Platinum Mile $1,179 $1,144 $1,183 $1,193 $1,316
Mimosa $1,112 $1,126 $1,133 $1,217 $1,247
Total cost of production of $55 million was 5% lower compared to the previous quarter December 2013, in line with lower
production, down 4%. This 4% reduction is a function of Plat Mile’s production being interrupted. Kroondal production for Q3 is the highest ever third quarter production by Kroondal in its 10 year mine life.
Kroondal's unit costs for the nine months to 31 March 2014 remain within inflationary targets having increased 5% compared
to the pcp. For the quarter under review, Kroondal's cash costs per ounce in Rand terms increased 9% quarter-on-quarter
but only 3% in Dollar terms due to the weaker Rand. This increase in costs was driven primarily by lower production than the
record December quarter, and the previously guided increase in reportable cash costs from the treatment of the ore stock
pile during the December Christmas break. The good production performance at Kroondal was achieved notwithstanding the
mine encountering a number of operational challenges, including, K6 shaft’s build up being hampered by a high number of
potholes encountered while setting up the strike sections and Kwezi shaft encountering very difficult ground conditions
which necessitated a reduction in panel lengths. Despite these challenges, Kroondal's tonnes mined in the third quarter was a
record for Q3 tonnes mined.
Mimosa's unit costs for the nine months to 31 March 2014 remain flat compared to the pcp at $866. For the quarter under
review, cash cost per PGM ounce was $892, a 7% increase quarter-on-quarter. The 7% increase in unit costs was due to
reduced PGM production (7%) as a result of planned plant modifications, below budget metal recoveries and power outages.
These challenges notwithstanding Mimosa’s production levels continue to be in line with company guidance.
Depreciation and amortisation for the quarter of $6.6 million was lower due to an increased resource base resulting from the
extension of Kroondal’s mine life, as previously announced. Administration costs of $1.4 million were lower, in line with the
cost reduction initiatives taken by the Aquarius Group. Finance costs for the quarter included interest paid on borrowings of
$3 million, non-cash interest accretion on convertible bonds of $3 million and unwinding of the rehabilitation provision of $1
million. The income tax benefit of $0.7 million includes a $0.4 million normal tax credit and a $0.4 million deferred tax credit,
offset by $0.1 million, of withholding taxes.
Net operating cash inflow for the quarter of $4 million comprised $51 million inflow from sales, $46 million paid to suppliers,
$2 million settlement of Everest housing litigation and $1 million interest received. Development and capital expenditure for
the quarter was $7 million. Net financing cash inflows of $3 million included dividends of $2 million from Mimosa, $3 million
proceeds from equipment leases and $2 million repayment of AQPSA lease liabilities.
The Group’s cash balance was $83 million at the end of the quarter, held as follows:
AQP $42 million
AQPSA $35 million
ACS(SA) $1 million
Platmile $4 million
Ridge Mining $1 million
Total $83 million (note a)
note a
Mimosa and Blue Ridge (which Aquarius has a 50% equity interest in) are accounted for using the equity method. Cash held
in these two entities at 31 March 2014 was $17 million and does not form part of the above cash balances. Under the
previous method of proportionately consolidating its investment in Mimosa and Blue Ridge, 50% of this cash would have
been included in Aquarius' Group cash balance.
Aquarius Platinum Limited
Consolidated Income Statement
Quarter ended 31 March 2014
$’000
Quarter Nine Months Financial Year
Ended Ended Ended
Note 31/03/14* 31/03/14* 30/06/13
PGM production – Kroondal & Platmile 54,198 167,867 216,167
PGM production – Mimosa 25,954 80,272 108,936
Total PGM production 80,152 248,139 325,103
Revenue (i) 60,300 173,473 237,115
Cost of sales (including D&A) (ii) (55,122) (175,873) (248,308)
Gross profit/(loss) 5,178 (2,400) (11,193)
Other income 43 115 278
Administrative costs (iii) (1,426) (5,762) (12,786)
Foreign exchange gain/(loss) (iv) 502 3,233 (19,322)
Finance costs (v) (6,992) (22,287) (26,670)
Impairment losses (vi) (265) (2,752) (214,111)
Profit on sale of assets (vii) 597 566 -
Closure, transition and rehabilitation costs - - (54,538)
Share of profit/(loss) from joint venture entities 1,790 1,956 (2,698)
Loss before income tax (573) (27,331) (341,040)
Income tax benefit (viii) 734 3,464 53,127
Net profit/(loss) 161 (23,867) (287,913)
Net profit/(loss) is attributable to:
Equity holders of Aquarius Platinum Limited 224 (23,816) (287,207)
Non-controlling interests (ix) (63) (51) (706)
161 (23,867) (287,913)
Earnings per share
Basic earnings/(loss) per share (cents per share) 0.00 (5.07) (61.13)
* Unaudited
Notes on the March 2014 Consolidated Income Statement
(i) Revenue for the quarter of $60.3 million was 13% higher than the previous quarter following higher prices and a $7.6
million positive turnaround in sales adjustments.
(ii) Cost of sales of $55 million for the quarter was 5% lower compared to the previous quarter December 2013 in line with
lower production, down 4%.
(iii) Administrative costs of $1.4 million are in line with previous periods in the current financial year and lower than
comparable periods of previous years.
(iv) Foreign exchange gain is attributable to revaluation adjustments on intercompany loans, cash balances held in Rand,
Australian Dollars and Pound Sterling, and the revaluation of pipeline debtors in line with movements in the Rand against the
US Dollar.
(v) Finance costs include interest paid on borrowings $3 million, non-cash interest accretion on convertible bond $3 million
and unwinding of the rehabilitation provision $1 million.
(vi) Impairment losses arising from a review of the carrying value of non-operating assets, namely Marikana, Ridge Mining,
the tailings retreatment operation Platmile, and several mining rights.
(vii) Profit on sale of assets arose from the disposal of sundry tenements not forming part of the Group's strategic plan.
(viii) Income tax benefit includes $0.4 million normal tax credit and a $0.4 million deferred tax credit, offset by $0.1 million of
withholding taxes.
(ix) Reflects the 8.3% non-controlling interest of Platinum Mile Resources (Pty) Ltd. Following the acquisition of an
additional 41.7% during the during the 2012 financial year, the Group holds 91.7% and controls Platinum Mile Resources
(Pty) Ltd.
Aquarius Platinum Limited
Consolidated Statement of Cash Flows
Quarter ended 31 March 2014
$’000
Quarter Nine months Financial Year
Ended ended Ended
Note 31/03/14* 31/03/14* 30/06/13
Net operating cash inflow/(outflow) (i) 3,759 8,466 (21,448)
Net investing cash outflow (ii) (6,922) (17,911) (20,629)
Net financing cash inflow/(outflow) (iii) 3,025 12,937 (34,364)
Net (decrease)/increase in cash held (138) 3,492 (76,441)
Opening cash balance 82,998 77,773 166,652
Exchange rate movement on cash 366 1,961 (12,438)
Closing cash balance (iv) 83,226 83,226 77,773
* Unaudited
Notes on the March 2014 Consolidated Statement of Cash Flows
(i) Net operating cash flow for the March quarter includes $51 million inflow from sales, $46 million paid to
suppliers, $2 million settlement of Everest housing litigation (accrued in December accounts) and $1 million interest
received.
(ii) Includes development and plant and equipment expenditure on AQPSA.
(iii) Includes mining equipment lease facility drawdown $3 million, repayment of lease liabilities $2 million and $2
million dividend received from Mimosa Investments Limited.
Aquarius Platinum Limited
Consolidated Balance Sheet
At 31 March 2014
$’000
As at As at
Note 31/03/14* 30/06/13
Assets
Cash assets 83,226 77,773
Current receivables (i) 30,200 33,965
Other current assets (ii) 14,138 16,181
Property, plant and equipment (iii) 98,480 105,030
Mining assets (iv) 112,242 121,694
Intangible asset (v) 54,985 59,449
Investments in joint venture entities (vi) 205,128 223,643
Other non-current assets (vii) 68,263 66,203
Total assets 666,662 703,938
Liabilities
Current liabilities (viii) 37,627 43,109
Non-current interest-bearing liabilities (ix) 278,171 268,788
Other non-current liabilities (x) 94,161 96,099
Total liabilities 409,959 407,996
Net assets 256,703 295,942
Equity
Issued capital 24,416 24,370
Treasury shares (27,286) (26,526)
Reserves 625,161 639,854
Accumulated losses (371,218) (347,402)
Total equity attributable to equity holders
of Aquarius Platinum Limited 251,073 290,296
Non-controlling interests (xi) 5,630 5,646
Total equity 256,703 295,942
* Unaudited
Notes on the March 2014 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, Everest, CTRP and Platmile.
(v) Includes intangibles relating to contract value acquired on the acquisition of equity interest in Platinum Mile Resources
(Pty) Ltd.
(vi) Reflects investments in joint venture entities, Mimosa and Blue Ridge.
(vii) Includes the recoverable portion of rehabilitation provision from Anglo Platinum of $10 million, receivable from outside
shareholders of Blue Ridge and Sheba’s Ridge of $23 million, investments in rehabilitation trusts of $16 million and AQPSA
deferred tax asset of $19 million.
(viii) Includes trade creditors and other payables of $31 million, AQPSA equipment leases of $2 million and leave provisions
of $4 million.
(ix) Includes convertible bonds of $277 million and AQPSA lease facilities of $1 million.
(x) Includes deferred tax liabilities $17 million, provision for closure costs $74 million and rehabilitation obligations on PSA1
and PSA2 structures of $3 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 2012 financial year end, 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 improved to 0.98 per 200,000 man hours from 0.99 in the previous quarter
- Production decreased to 1,686,000 tonnes from 1,867,000 tonnes, quarter-on-quarter
- Head grade decreased to 2.38 g/t from 2.42 g/t
- Recoveries decreased by 0.37% to 78%
- Volumes processed lower at 1,796,000 tonnes
- Stockpiles at the end of the quarter totalled approximately 38,000 tonnes
- PGM production decreased by 2% to 107,818 PGM ounces, quarter-on-quarter
- Revenue increased by 24% to R1,275 million, quarter-on-quarter, due to improved basket prices and a R43
million positive sales adjustment for the quarter
- Mining cash costs increased by 7% to R563 per tonne, due to lower volumes
- Unit cost per PGM ounce increased 9% to R9,376 per PGM ounce due to lower volumes and stock pile
treatment costs of R405 per ounce compared to a R237 per ounce credit in the previous quarter
- Kroondal’s cash margin for the period improved from 7 % to 21 %
- Despite the above, this was a record production Q3 for Kroondal of 107,818 PGM ounces with the next best Q3
production being 107,548 in 2006
- This is the 5th consecutive quarter of above 105,000 PGM ounces produced, a Kroondal first
Please refer to www.aquariusplatinum.com for the graph.
Commentary
Kroondal:
The 12 month rolling DIIR improved slightly to 0.98 from 0.99 in the previous quarter, whilst the 3 months DIIR
rate improved materially from 0.79 to 0.57 following continued focus and management of safety performance
including in the implementation of a new Safety programme of “My Life, My responsibility, I will comply”.
Production at Kroondal for the quarter of 1.7 million tonnes was a Q3 record despite being 10% lower compared
to the previous quarter. This good production level was achieved notwithstanding the mine encountering
operational challenges including K6 shaft’s build up being hampered by a high number of potholes that were
encountered while setting up the strike sections and Kwezi shaft encountering very difficult ground conditions
which necessitated a reduction in panel lengths. This quarter also saw the changeover of Ackerman’s Sections
from Simunye Shaft to Bambanani Shaft. This change in management process initially resulted in lower
production from this section but has now normalised.
A total of seven DMR visits were conducted for the quarter on Kroondal shafts and one concentrator plant which
resulted in one section 54 instruction issued at Kopaneng shaft. The focus is still to maintain good working
relationships with the DMR office.
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.
Everest Mine
Similarly, given the continuing low Rand PGM basket prices, temporary geological problems and unstable labour
relations, the Everest mine remains placed on care and maintenance until further notice.
AQPSA Operating cash costs per ounce (Rand)
4E 6E 6E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu)
Kroondal 9,376 7,702 7,501
Capital expenditure
Kroondal
(R’000 unless otherwise stated) Total Per 4E oz
Ongoing establishment of infrastructure 86,440 802
Project capital (K6 shaft) 10,883 101
Mobile equipment 42,111 391
Total 139,433 1,293
Kroondal mine: reconciliation of cash costs per 4E ounce
Cost per 4E ounce
(Rand)
Q3 Q2
Total operating expenditure 10,084 10,106
Less:
Ongoing capital expenditure & mobile equipment (931) (1,048)
Project capex (K6 shaft) (182) (209)
Transferred from/(to) stockpile 405 (237)
On mine cash costs 9,375 8,612
Development of the K6 shaft at Kroondal continues. The project remains on budget and is slightly ahead of time.
The Company expects to incur R90 million in capital expenditure (R45 million attributable to Aquarius) on this
project during FY14, in line with budget. The final phase of the project relating to the surface infrastructure
continues and is scheduled for commissioning in the latter part of Q4. The permanent power construction will be
completed during H1 of FY15.
MIMOSA INVESTMENTS (Aquarius Platinum – 50%)
- 12-month rolling average DIIR remained constant at 0.05 per 200,000 man hours worked
- Production decreased by 5% to 598,094 tonnes, quarter-on-quarter
- Head grade improved to 3.67 g/t
- Recoveries were 77.5%
- Volumes processed decreased by 9% to 568,608 tonnes
- Stockpiles at the end of the quarter totalled approximately 165,060 tonnes
- PGM production decreased by 7% to 51,907 PGM ounces quarter-on-quarter, due to challenges experienced
after the February 2014 plant shutdown
- Revenue increased by 1% to $63 million, from $62m in the previous quarter
- Mining cash costs increased by 9% to $81 per tonne, and costs per PGM ounce by 7% to $892 due to decrease
in production
- Stay-in-business capital expenditure was $114 per PGM ounce for the quarter
- Cash profit margin for the period increased from 18% to 26%
Please refer to www.aquariusplatinum.com for the graph.
Operating cash costs per ounce
Unit cash costs per PGM ounce (before by-product credits) were 7% higher than the previous quarter. The 7%
increase was due to a reduction in PGM production (7%) as a result of production challenges experienced during
the quarter. These challenges included plant breakdowns, below budget metal recoveries and power outages.
4E 6E 4E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu & Co)
Mimosa 892 844 595
Capital expenditure
The total capital expenditure for the third quarter amounted to $6.5 million. Expenditure was incurred mainly on
mobile equipment, drill rigs and LHDs, the conveyor belt extension and down dip development.
TAILINGS OPERATION
Platinum Mile (Aquarius Platinum – 91.7%)
- Material processed decreased 75% to 265 000 tonnes, quarter-on-quarter
- Head grade decreased to 0.51 g/t
- Recoveries decreased to 6%
- Production decreased to 289 PGM ounces from 1,583 PGM ounces in the previous quarter
- Cash costs increased to R27,084 per PGM ounce from R6,641 per PGM ounce in the previous quarter
- Revenue was R4 million for the quarter
- The cash margin for the period was negative 123%
Commentary
Platinum Mile:
Platinum Mile derives its feed-stock from a concentrate plant owned and managed by Anglo Platinum which has
been on strike since 25 January 2014. This strike has entered its 11th week and the parties remain far apart in the
wage negotiations. As a result of the strike the Platinum Mile operation has received no feed from Anglo. It is
not possible to draw any meaningful comparison with the results of the previous quarter. The cash costs
numbers are also materially distorted because of very low feed and production volumes. It should also be noted
that the fourth quarter’s production will also be impacted by the strike action which at the time of this release
was still ongoing.
The coarse grinding expansion has been completed during the strike period and commissioning will start once
Anglo Platinum resumes its operations.
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)
Platinum Mile 27,084 23,365
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum – 50%)
This operation remains on care and maintenance.
CORPORATE MATTERS
Tender Offer and Rights Issue
On 7 April 2014, Aquarius Platinum Limited announced a tender offer to purchase a minimum of $150 million
and a maximum of $225 million in principal amount of the currently $298 million in principal amount
outstanding at a repurchase price of $92,000 per $100,000 in principal amount of Existing Convertible Bonds.
The aggregate nominal amount of convertible bonds validly tendered pursuant to the Tender Offer was
$172,600,000.
The Company advised that the Tender Offer would be financed upon the successful completion of a Rights Issue
to finance part or all of the amount payable by the Company for the Existing Convertible Bonds accepted for
repurchase pursuant to the Tender Offer.
On 15 April 2014, the Company announced the issue of up to 976,206,906 Rights Issue Shares to qualifying
shareholders. The Rights Issue is on the basis of 2 Rights Issue Shares for every Existing Share held by qualifying
shareholders at the close of business on the applicable record date. Subject to certain exceptions, shareholders
with a registered address, resident, or otherwise believed to be in the United States, Canada or Japan will not be
entitled to participate in the Rights Issue.
The Issue Price of A$0.25 represents a discount of approximately 58 per cent to the closing price on the ASX of
A$0.59 per Common Share on 11 April 2014. The Issue Price of 14 pence represents a discount of approximately
65 per cent to the closing price on the London Stock Exchange of 40.25 pence per common share on 11 April
2014. The Issue Price of ZAR2.41 represents a discount of approximately 66 per cent to the closing price on the
JSE of ZAR7.15 per common share on 11 April 2014.
The Rights Issue is expected to raise gross proceeds of up to $225 million through the issuance of up to
976,206,906 new Common Shares (the “Rights Issue Shares”). Assuming all Rights Issue Shares are issued, they
will represent approximately 67 per cent of the Enlarged Issued Share Capital.
Proceeds raised pursuant to the Rights Issue will be used to fund the settlement of the Tender Offer. In the
event the net proceeds of the Rights Issue exceed the amount required to settle the Tender Offer, the Company
intends to retain any additional amounts to improve the Aquarius Group’s liquidity in order to fund the future
redemption of the Existing Convertible Bonds not validly tendered and repurchased pursuant to the Tender
Offer on the scheduled redemption date (being 18 December 2015).
Subject to the satisfaction or waiver of certain customary conditions, Rand Merchant Bank, a division of
FirstRand Bank Limited (“RMB”), Absa Bank Limited, acting through its corporate and investment banking
division (“Absa”) and Euroz Securities Limited (“Euroz”) have agreed to underwrite the subscription of
737,578,551 Rights Issue Shares (less any Rights Issue Shares taken up under the Rights Issue or subscribed for in
any rump offering) at ZAR2.41 per Rights Issue Share (in the case of RMB and Absa) and at A$0.25 per Rights
Issue Share (in the case of Euroz). As a result, the Company has certainty that it will raise minimum gross
proceeds equal to approximately $170 million from the Rights Issue.
The latest date for acceptances and payment in full in respect of the Rights Issue is 14 May 2014.
Full details of the Tender Offer and Rights Issue can be found at www.aquariusplatinum.com
Update on Sale of Assets
The company released details of the planned sale of two non-core assets being its interest in the Blue Ridge
Mine and its interest in the Kruidfontein prospecting right on 30 January 2014. Work in relation to the fulfilment
of the conditions precedent, noted in the releases, continues. Shareholders will be informed of any material
developments in this regard as soon as is practical.
Statistical information: Kroondal P&SA1
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: Platinum Mile
It is not possible to draw any meaningful comparison with the results of the previous quarter as unit costs are
materially distorted because of very low feed and production volumes.
Please refer to www.aquariusplatinum.com for the Statistical information.
Aquarius Platinum Limited
Incorporated in Bermuda
Exempt company number 26290
Board of Directors
Nicholas Sibley Non-executive Chairman
Jean Nel Chief Executive Officer
David Dix Non-executive
Tim Freshwater Non-executive (Senior Independent Director)
Edward Haslam Non-executive
Kofi Morna Non-executive
Zwelakhe Mankazana Non-executive
Sonja de Bruyn Sebotsa Non-executive
Audit/Risk Committee
David Dix (Chairman)
Tim Freshwater
Edward Haslam
Kofi Morna
Nicholas Sibley
Remuneration Committee
Edward Haslam (Chairman)
David Dix
Zwelakhe Mankazana
Nicholas Sibley
Nomination Committee
Sonja de Bruyn Sebotsa (Chairman)
Edward Haslam
Tim Freshwater
Kofi Morna
Willi Boehm
Company Secretary
Willi Boehm
AQPSA Management
Sonja de Bruyn Sebotsa Non-executive Chairman
Robert Schroder Managing Director
Jean Nel Executive Director
Wessel Phumo General Manager: Kroondal
Mimosa Mine Management
Winston Chitando Chairman
Herbert Mashanyare Technical Director
Peter Chimboza Resident Director
Fungai Makoni General Manager Finance & Company Secretary
Platinum Mile Management
Richard Atkinson Managing Director
Paul Swart Financial Director
Issued capital
At 31 March 2014, the Company had on issue: 487,782,536 fully paid common shares.
Substantial shareholders 31 March 2014 Number of Shares Percentage
Wellington Management Company 40,593,492 8.32
The Capital Group of Companies 37,117,112 7.61
HSBC Custody Nominees (Australia) Limited 28,849,362 5.91
Primary Listing: Australian Securities Exchange (AQP.AX) Trading Information
Premium Listing: London Stock Exchange (AQP.L) ISIN number BMG0440M1284
Secondary Listing: JSE Limited (AQP.ZA) ADR ISIN number US03840M2089
Convertible Bond ISIN number XS0470482067
Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE)
Liberum Capital Limited Euroz Securities Rand Merchant Bank
Ropemaker Place, Level 12 Level 18 Alluvion (A division of FirstRand Bank Limited)
25 Ropemaker Street, London 58 Mounts Bay Road, 1 Merchant Place
EC2Y 9LY Perth WA 6000 Cnr of Rivonia Rd and Fredman Drive,
Telephone: +44 (0) 20 3100 2000 Telephone: +61 (0) 8 9488 1400 Sandton 2196
Johannesburg South Africa
Barclays
5 The North Colonnade
Canary Wharf
London E14 4BB
Telephone: +44 (0) 20 7623 2323
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 Africa
Postal 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 4, Suite 5, South Shore Centre, 85 The Esplanade, 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:
In the United Kingdom and South Africa: In Australia:
Jean Nel Willi Boehm
+27 (0)10 001 2848 +61 (0) 8 9367 5211
Glossary
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) 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 or $ United States Dollar
Everest Everest Platinum Mine
Great Dyke Reef A PGE-bearing layer within the Great Dyke Complex in Zimbabwe
GoZ Government of 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 Johannesburg Stock Exchange
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 nine months ended 31 March 2013
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 PGMs as comprising Pt+Pd+Rh plus Au (gold)
with 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.
RPM Limited Rustenburg Platinum Mines Limited, a subsidiary of Anglo Platinum Limited
Tonne 1 metric tonne (1,000kg)
TARP Trigger Action Response Procedure
UG2 Reef A PGE-bearing chromite layer within the Critical Zone of the Bushveld Complex
29 April 2014
Date: 29/04/2014 08:24:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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