Wrap Text
Production Results to 30 June 2014
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1284
Fourth Quarter 2014: Production Results
Production Results to 30 June 2014
Highlights
- Attributable production from operating mines up 4% quarter-on-quarter, down 1% compared to previous
corresponding period (pcp)
- Average PGM basket price increased 3% for the quarter – down 1% compared to pcp.
- Kroondal PGM basket price increased 0.5% on average to R12,822 per PGM ounce quarter-on-quarter - up
12% compared to the previous year
- Mimosa PGM basket price increased 4% on average to $1,156 per PGM ounce quarter-on-quarter - down 6%
compared to the previous year
- The Rand strengthened against the US Dollar by 2% on average quarter-on-quarter – down 18% compared to
the previous year
- Cash costs at Kroondal unchanged at R9,396 per PGM ounce quarter-on-quarter – up 9% compared to the
previous year
- Cash costs at Mimosa net of "one off voluntary retrenchment costs" were down 10% to $803 per PGM ounce
quarter-on-quarter - down 2% compared to the previous year. Cash costs at Mimosa inclusive of "one off
voluntary retrenchment costs" of $105 per PGM oz increased 2% to $908 per PGM ounce quarter-on-quarter –
up 1% compared to the previous year
- Surface stockpile at Mimosa increased – now 165,000 tonnes
- Post quarter end, three year wage agreements were concluded with recognised unions at Kroondal without
any interruptions to operations
Q4 2014 Operating Results Summary
Kroondal Mimosa Platinum
4E PGM production Mile
Total (100% basis) 106,181 60,818 0
Attributable 53,090 30,409 0
4E basket price
R/oz 12,822 - -
$/oz 1,215 1,156 -
Cash costs (4E basis)
R/oz 9,396 - -
$/oz 890 908* -
Cash margin (%) 17 30 -
Stay-in-business capex
R/oz 1,123 - -
$/oz 106 99.74 -
* Includes one off voluntary retrenchment costs of $105 per 4E oz.
Commenting on the results, Jean Nel, CEO Aquarius Platinum said:
The Group's fourth quarter performance was credible, with both Kroondal and Mimosa delivering safety, production and cost
performances ahead of guidance. Kroondal produced in excess of 105 000 4E ounces for a record 6th consecutive quarter,
despite the interruptions from the public holidays and South African national elections. The successful conclusion of three year
wage agreements with represented unions at Kroondal without any production interruptions post quarter-end was also very
pleasing and testimony to good labour relations between Kroondal and its work force as well as represented unions.
Mimosa delivered an equally credible production and cost performance despite implementing a significant voluntary
retrenchment program during the quarter. This program is expected to contribute to lower costs at Mimosa going forward.
At a corporate level Aquarius successfully completed the rights offer and limited convertible bond tender offer, reducing the
debt owing to bond holders from $298 million to US$125 million. Following the completion of the combined transactions
Aquarius also has significantly increased cash balances.
Although post quarter end metal prices started to increase, the result of this increase is not yet evident in the quarter's
results as metal prices in Dollar terms only increased 2% for Kroondal compared to pcp, Mimosa's basket price was 5% lower
than the pcp.
The slightly higher metal prices notwithstanding, operating conditions remained challenging during the quarter, and hence as
Aquarius enters the new financial year management will continue with its established focus on safety, production and cost
discipline, whilst carefully assessing its project pipeline, pursuing only those projects which add value to shareholders.
Production by mine
Quarter ended
PGMs (4E)
Jun 2014 Mar 2014 % Change Jun 2013 % Change
Kroondal 106,181 107,818 (2) 106,872 (1)
Mimosa 60,818 51,907 17 57,168 6
Platinum Mile - 289 (100) 4,810 (100)
Total 166,999 160,014 4 168,850 (1)
Production by mine attributable to Aquarius (Operating mines)
Quarter ended
PGMs (4E)
Jun 2014 Mar 2014 % Change Jun 2013 % Change
Kroondal 53,090 53,909 (2) 53,436 (1)
Mimosa 30,409 25,954 17 28,584 6
Platinum Mile - 289 (100) 4,810 (100)
Total 83,499 80,152 4 86,830 (4)
Aquarius Group quarterly attributable production (PGM ounces) to 30 June 2014
Please refer to www.aquariusplatinum.com for the graph
PGM markets update
Platinum traded robustly through the recently concluded strike action in South Africa, with the Platinum price
supported to a degree by lost production. Relatively muted price appreciation has largely been attributed to the
fact that market participants were able to partially negate the associated production disruption by the build-up
in above-ground stocks, with the strike action being well flagged throughout 2013.
Palladium has traded strongly so far this year, rising above $800 per ounce and remaining at its highest levels
since 2011 underpinned by a combination of factors including a recovery in global auto sales, labour issues in
South Africa and increasing substitution of platinum. Intra-period scaling and price volatility is mostly attributed
to Russia-Ukraine geopolitical tensions and associated trade sanctions which could potentially have a
fundamental impact on supply / demand balance for the metal going forward.
Demand continued to be robust for the platinum ETP in the quarter, reaching continued record holdings,
resulting in more metal being taken out of the market. The recent release of the Palladium ETF has proved to be
a catalyst for investment growth during the quarter.
The South African Rand has traded in a relatively narrow range of R10.30-10.84 during the quarter, and daily
trading volumes have moderated relative to the levels seen last year. The Rand closed the quarter relatively
unchanged at R10.59 compared to the previous period end.
European vehicle sales have climbed over the course of last 3 months amidst improving consumer confidence.
Introduction and implementation of Euro VI emissions legislation have also provided support to PGM prices.
Aside from the growth in Europe and the US, growth elsewhere appears to still be making up the ground lost
during the Polar Vortex with China continuing to impress with rapid growth in auto sales volumes (+11.6% YTD).
Specific PGM prices commentary
The average platinum price increased by 1.3%, while palladium increased by 9.4% and lesser traded rhodium
increased by 3.8% from previous quarter. Gold decreased by 0.2% on average. Platinum closed the quarter up
4.8% at $1,486 per ounce, while palladium rose by 8.6% to $843 per ounce and rhodium decreased by 1.3% to
$1,115 in comparison to previous quarter. Gold increased 3.4% to $1,327 per ounce.
12-month individual PGM prices to 30 June 2014 12-month PGM basket prices to 30 June 2014
(US$/oz) (US$ and ZAR per PGM basket ounce)
Please refer to www.aquariusplatinum.com for the graph
12-month ZAR price to 30 June 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) Jun 2014 Mar 2014 % Change Jun 2013 % Change
Kroondal 1,215 1,179 3 1,195 2
Mimosa 1,156 1,112 4 1,217 (5)
Platinum Mile - 1,179 (100) 1,169 (100)
Weighted Avg. 1,194 1,157 3 1,201 (1)
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 0.73 per 200,000 man hours from 0.98 in the previous quarter
Production increased to 1,786,000 tonnes from 1,686,000 tonnes, quarter-on-quarter
- Head grade decreased marginally to 2.37 g/t from 2.38 g/t
- Recoveries decreased by 0.7% to 78%
- Volumes processed higher at 1,788,000 tonnes
- Stockpiles at the end of the quarter totalled approximately 35,000 tonnes
- PGM production decreased by 2% to 106,181 PGM ounces, quarter-on-quarter
- Revenue in Rand terms decreased by 5% to R1,207 million, quarter-on-quarter, due to a combination of a
stronger Rand during the quarter and 2% lower production
- Mining cash costs decreased by 1% to R558 per tonne, due to less stockpile being consumed
- Unit cost per PGM ounce increased 0.2% to R9,396 per PGM ounce
- Kroondal's cash margin for the period reduced from 21 % to 17 %
Please refer to www.aquariusplatinum.com for the graph
Commentary
Kroondal:
The 12 month rolling DIIR improved materially to 0.73 from 0.98 in the previous quarter as did the 3 months DIIR
rate which improved to 0.43 from 0.57. This follows the continued focus and management of safety
performance including in the implementation of the new Safety programme of "My Life, My responsibility, I will
comply" in September 2013.
Wage agreement reached at Kroondal
Subsequent to the end of the quarter, AQPSA reached separate three-year wage agreements with the National
Union of Mineworkers ("NUM") and Solidarity in relation to their respective members employed at Kroondal.
The agreements are effective from 1 July 2014, and will be applied to all employees within the respective
bargaining units at Kroondal. The NUM represents the majority of Kroondal's semi-skilled work force, while
Solidarity represents the majority of Kroondal's skilled work force. Measured on a cost to company basis the
average increase slightly exceeds the increase in the cost of living as measured by inflation rate (CPI).
Aquarius acknowledges with appreciation the critical contribution that the employees of Kroondal continue to
make to the ongoing safety and operational improvements at the Kroondal mine; the leadership shown by the
Kroondal mine's management team during the negotiation process and the constructive and mature manner in
which the NUM and Solidarity conducted the wage negotiations.
The successful conclusion of the wage agreements are a significant positive development for the Company.
AQPSA is extremely proud of its workforce which worked without interruption to maintain its operating
performance throughout the negotiation process.
Production at Kroondal for the quarter of 1.8 million tonnes was achieved again notwithstanding different
challenges that were encountered at operations and in the general industry, and interruptions due to public
holidays and the South African national elections.
At K6, mining into very challenging ground conditions continued. Encouragingly, ground conditions appear to be
improving with depth.
At Kwezi Shaft challenging ground conditions still persist and in this quarter the mine continued to reduce the
splits further to keep the pillars intact as they were peeling off due to iron-rich ultramafic pegmatite (IRUP)
which is situated at the bottom of the main seam.
Kopaneng Shaft has now commissioned the underground workshop and the majority of all TMM (Trackless
Mobile Machines) are being parked and serviced underground.
Simunye Shaft performed very well although the shaft was issued with a Section 54. This was lifted after 2
production days were lost.
Bambanani Shaft commissioned their first underground bunker. The ore being mined from the Ackermans area
is now hoisted through the Bambanani belt infrastructure. Depleted production panels at Bambanani will be
replaced with panels in the Marikana ground. Compressed air and water services for this area are provided
through Marikana 4 Shaft. In the next quarter 40% of Bambanani production will be coming from the Marikana
4 Shaft area. Bambanani was also issued with a Section 54 instruction which was again lifted after 2 production
days.
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 9,396 7,713 7,476
Capital expenditure
Kroondal
(R'000 unless otherwise stated) Total Per 4E oz
Ongoing establishment of infrastructure 88,734 836
Project capital (K6 shaft) 30,486 287
Mobile equipment 52,726 497
Total 171,946 1,620
Kroondal mine: reconciliation of cash costs per 4E ounce
Cost per 4E ounce
(Rand)
Q4 Q3
Total operating expenditure 11,025 10,084
Less:
Ongoing capital expenditure & mobile equipment (1,332) (931)
Project capex (K6 shaft) (287) (182)
Transferred from/(to) stockpile (10) 405
On mine cash costs 9,396 9,376
Development of the K6 shaft at Kroondal is almost complete with only minor surface infrastructure snags and
the permanent power construction being completed during H1 of FY15.
MIMOSA INVESTMENTS (Aquarius Platinum – 50%)
- 12-month rolling average DIIR was 0.08 per 200,000 man hours worked
- Production increased by 9% to 648,944 tonnes, quarter-on-quarter
- Head grade static at 3.67 g/t
- Recoveries decreased by 0.5% to 77%
- Volumes processed increased by 14% to 648,902 tonnes
- Stockpiles at the end of the quarter totalled approximately 165,102 tonnes
- PGM production increased by 17% to 60,818 PGM ounces quarter-on-quarter, due to improved stability of
the plant. A number of challenges were experienced in the prior quarter
- Revenue increased by 26% to $79 million, from $63m in the previous quarter
- Mining cash costs increased by 5% to $85 per tonne, and costs per PGM ounce by 2% to $908 due to
retrenchment costs. Cash costs before "one off retrenchment costs" decreased 10% to $803 per PGM ounce
for the quarter
- Stay-in-business capital expenditure was $99.74 per PGM ounce for the quarter
- Gross cash profit margin for the period increased from 26% to 30%
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 2% higher than the previous quarter due to
once off retrenchment costs of US$5.3 million. Cash costs before "one off retrenchment costs" incurred during
the quarter were 10% lower at $803 per PGM ounce.
4E 6E 4E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu & Co)
Mimosa 908 861 627
Capital expenditure
The total capital expenditure for the fourth quarter amounted to $6.8 million. Expenditure was incurred mainly
on mobile equipment, drill rigs and LHDs, the conveyor belt extension and down dip development and remains
within guidance provided by the Company.
TAILINGS OPERATION
Platinum Mile (Aquarius Platinum – 91.7%)
The strike at Anglo Platinum resulted in zero production for the quarter ended June 2014. The strike has since
ended and, although significant uncertainty in relation to the date and level of production recommencement
prevail, Plat Mile expects to commence receiving feed in late July 2014.
Platinum Mile derives its feed-stock from concentrator plant owned and managed by Anglo Platinum in the
Rustenburg area which has been on strike since 25 January 2014. Anglo Platinum has indicated in a press release
that production ramp-up will start once all striking workers have undergone medical examinations and safety
training.
The Coarse Milling Expansion was completed and successfully electromechanically commissioned during the
current quarter. Capital expenditure for the quarter amounted to R2.3 million and the total CAPEX to complete
this expansion was R25.8 million. The benefits of this expansion on production yields should become evident in
the next quarter.
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 - - -
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 maximum of $225 million in
principal amount of convertible bonds of the current $298 million in principal amount of the convertible bonds
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 $172.6
million.
The repurchase price, which together with accrued interest totalled $165.7 million, was paid to security holders
in May 2014.
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.
The company received valid acceptances in respect of 931,250,197 rights issue shares, representing
approximately 95.39 per cent of the total number of rights issue shares offered to qualifying shareholders
pursuant to the rights issue announced by the company on 7 April 2014. The company confirms that shortfall for
the remaining 44,956,709 rights issue shares were placed by the underwriters. The rights issue grossed $226.1
million through the issuance of 976,206,906 new common shares.
Following completion of the rights issue, the company's issued share capital consists of 1,464,310,359 common
shares. The company holds 17,047,787 common shares as treasury shares in accordance with Bermudan law.
Therefore, the total number of voting rights in the company is 1,447,262,572. This figure may be used by
shareholders as the denominator for the calculations by which they determine if they are required to notify their
interest in, or a change in their interest in, the company under the FCA's Disclosure and Transparency Rules.
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. In the release the company
confirmed its expectation that the conditions precedent would be fulfilled in H2 calendar 2014. This time line
remains the company's base case expectation. 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
Note:
* Mimosa current quarter cash cost per PGM ounce Includes one off voluntary retrenchment costs of $105
per 4E oz. Unit cash costs for the quarter adjusted for "once off" voluntary retrenchments were $803 per
PGM ounce.
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
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 30 June 2014, the Company had on issue: 1,464,310,394 fully paid common shares.
Substantial shareholders 30 June 2014 Number of Shares Percentage
HSBC Custody Nominees (Australia) Limited 110,254,065 7.53
J P Morgan Nominees Australia Limited 69,919,771 4.77
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) Broker (ASX) Sponsor (JSE)
Barclays Euroz Securities Rand Merchant Bank
5 The North Colonnade Level 18 Alluvion (A division of FirstRand Bank Limited)
Canary Wharf 58 Mounts Bay Road, 1 Merchant Place
London E14 4BB Perth WA 6000 Cnr of Rivonia Rd and Fredman Drive,
Telephone: +44 (0) 20 7623 2323 Telephone: +61 (0) 8 9488 1400 Sandton 2196
Johannesburg South Africa
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
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
24 July 2014
Date: 24/07/2014 09:06:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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