Wrap Text
First Quarter 2015: Financial and Production Results
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
ISIN Code: BMG0440M1284
JSE Share Code: AQP
First Quarter 2015: Financial and Production Results
Highlights
- Revenue increased by 3% to $62 million (Q1 2014: $60 million) in line with slightly higher prices
- On-mine EBITDA increased 138% to $14.8 million (Q1 2014: $6.3 million)
- Group cash balance (excluding cash in joint venture entities) at quarter end $138 million (June 2014:
$137 million) with a further $19 million held in joint venture entities (June 2014: $16 million), 50% of which is
attributable to Aquarius;
- Attributable production from operating mines up 3% quarter-on-quarter and up 4% compared to the
previous corresponding period (pcp)
- Cash costs at Kroondal remain below guidance , decreased 4% to R9,001 per PGM ounce quarter-on-quarter
– down 1% compared to the previous year
- Cash costs at Mimosa were up 1% to $815 per PGM ounce quarter-on-quarter after adjusting for one-off
voluntary retrenchment costs incurred in the previous quarter- down 3% compared to the pcp.
- Surface stockpile at Mimosa increased – now 184,375 tonnes
- Kroondal PGM basket price increased 4% on average to R13,270 per PGM ounce quarter-on-quarter – up
12% compared to the pcp
- Mimosa PGM basket price increased 4% on average to $1,200 per PGM ounce quarter-on-quarter – up 8%
compared to the pcp
- The Rand weakened against the US Dollar by 1% on average quarter-on-quarter – down 7% compared to pcp
Q1 2015 Operating Results Summary
Kroondal Mimosa Platinum Mile
4E PGM production
Total (100% basis) 112,248 57,799 1,831
Attributable 56,124 28,900 1,831
4E basket price
R/oz 13,270 12,946
$/oz 1,239 1,200 1,202
Cash costs (4E basis)
R/oz 9,001 8,789
$/oz 840 815 816
Cash margin (%) 20 41 11
Stay-in-business capex
R/oz 915 0
$/oz 85 95 0
Commenting on the results, Jean Nel, CEO Aquarius Platinum said:
The quarter under review was defined by excellent safety, production and cost performances from both our
Kroondal and Mimosa operations, producing a record combined 85,024 attributable 4E ounces. We have in
Kroondal an efficient underground platinum mine (on a R/ton cost basis) and in Mimosa a mine that is benefiting
from the restructure implemented earlier in the year as well. Kroondal delivered its seventh consecutive
production quarter of in excess of 105,000 4E oz’s while Mimosa continues to deliver production ahead of
guidance. The results of Kroondal’s cost saving and efficiency drive is worthy of a special mention, which I think
is a really special performance. Delivering this disciplined cost and production performance whilst at the same
time significantly improving safety is testimony to excellent operational management for which Wessel Phumo
(GM at Kroondal), Peter Chimboza (Resident Director at Mimosa), Rob Schroder (Group COO) and the teams
deserve all the credit.
The excellent operational performances and the slightly higher metal prices which prevailed during the quarter
enabled the company to substantially increase EBITDA by 138%, deliver a net profit and generate positive free
cash flow.
Following the successful rights issue implemented earlier in 2014 Aquarius has a sustainable balance sheet with
net cash. The Board is of a view that retaining a sustainable level of debt on balance sheet is appropriate.
The positively trending metal price during the first 2 months of the quarter reversed sharply towards quarter
end and this reversal continued post quarter end with the Platinum price in particular hitting six year lows. Our
commitment and focus on safety, production and cost discipline will remain absolute in the low price
environment.
Work on our incremental growth projects continued during the quarter and an update is provided later in the
release. The difficult environment in which Southern African platinum producers operate reinforces our view
that projects, and concomitant production growth, is only worthy of capital allocation if it increases margins and
generates returns in excess of the cost of capital.
Production by mine
Quarter ended
PGMs (4E)
Sept 2014 June 2014 % Change Sept 2013 % Change
Kroondal 112,248 106,181 6 106,441 5
Mimosa 57,799 60,818 (5) 55,110 5
Platinum Mile 1,831 - 100 3,729 (51)
Total 171,878 166,999 3 165,280 4
Production by mine attributable to Aquarius (Operating mines)
Quarter ended
PGMs (4E)
Sept 2014 June 2014 % Change Sept 2013 % Change
Kroondal 56,124 53,090 6 53,220 5
Mimosa 28,900 30,409 (5) 27,555 5
Platinum Mile 1,831 - 100 3,729 (51)
Total 86,855 83,499 4 84,504 3
Aquarius Group quarterly attributable production (PGM ounces) to 30 September 2014
Please refer to www.aquariusplatinum.com for the graph.
PGM markets update
Platinum prices remained volatile in the context of the prolonged strike action in the first half of the year but in
September fell to intra-year lows below $1,350/oz, and continued its fall post the quarter to the lowest levels
since 2006. Despite c.1Moz of supply being lost during the strike, platinum prices remained under pressure due
to abundant stock levels that kept the market well supplied and deteriorating global economic growth
expectations in the context of weak economic data.
Palladium’s strong YTD momentum was partially reversed in early September, with the metal trading broadly in
line with the PGM complex which saw significant pressure in the month. Having reached 13 year highs at the
beginning of September, prices slipped below $800/oz towards the end of the quarter.
PGM investment demand registered record highs during the quarter. Platinum ETF holdings reached a peak of
3.07Moz in June, while palladium holdings hit a record high of 3.12Moz in August. A supportive investor sphere
has helped to boost palladium on top of favourable fundamentals, but it has struggled to lift platinum prices
even against the backdrop of severe supply disruptions.
In Europe, a key auto region for platinum, the auto industry has shown gradual signs of recovery albeit the most
recent economic data suggests European conditions remain tough. The implementation of Euro VI legislation
being rolled out this month is expected to support demand in forthcoming months, with loadings favouring
platinum particularly for smaller vehicles where the nitrogen oxides trap will be preferred. In China, dealer
destocking and speculation of purchase restrictions have slowed auto sales, however even though the growth
rate is slower it is still positive.
The South African Rand remained under pressure during the quarter and weakened further by 1% quarter-on-
quarter and 7% compared to the pcp.
Specific PGM prices commentary
The average platinum price decreased by 0.9%, while palladium increased by 5.9% and lesser traded rhodium
increased by 12.9% from previous quarter. Gold decreased by 0.5% on average. Platinum closed the quarter
down 11.7% at $1,304 per ounce, while palladium reduced by 6.1% to $788 per ounce and rhodium increased by
12.2% to $1,240 in comparison to previous quarter. Gold decreased 7.5% to $1,217 per ounce.
12-month individual PGM prices to 30 September 2014
Please refer to www.aquariusplatinum.com for the graph.
12-month PGM basket prices to 30 September 2014
Please refer to www.aquariusplatinum.com for the graph.
12-month ZAR price to 30 September 2014
Please refer to www.aquariusplatinum.com for the graph.
Average PGM basket prices achieved at Aquarius operations
US$ per PGM Quarter ended
ounce (4E) Sept 2014 June 2014 % Change Sept 2013 % Change
Kroondal 1,239 1,215 2 1,183 5
Mimosa 1,200 1,156 4 1,133 6
Platinum Mile 1,202 - n/a 1,173 2
Weighted 1,225 1,194 3 1,168 5
Financials
Aquarius recorded an on-mine EBITDA profit of $14.8 million for the quarter ended 30 September 2014, an
increase of $8.5 million or 138% compared to the on-mine EBITDA of $6.3 million earned in the previous
corresponding quarter, September 2013 (pcp).
Aquarius' share of profit from joint venture entities (Mimosa & Blue Ridge) was a profit of $6 million, an $8
million turnaround compared to the pcp. Net profit after tax was $5 million, a $15 million turnaround compared
to the pcp.
The improved result compared to the pcp was due to increased production up 3%, higher PGM prices up 5% in
Dollar terms, lower costs down 3% and a weaker Rand down 7%. Revenue was up 3% to $62 million, compared
to $60 million in the pcp, due to increased production and improved PGM prices. In Rand terms, aggregate
revenue increased 11% compared to the pcp due to higher Dollar prices (up 5%) and the impact of a 7%
depreciation in the Rand.
Production for the quarter was 86,855 PGM ounces, a 3% increase compared to the pcp. Kroondal continued to
excel with production up 6% quarter on quarter whilst reducing unit costs. This is the eighth consecutive quarter
that Kroondal has produced in excess of 100,000 PGM ounces. Production at PlatMile resumed in July 2014
following the end of the strike at Anglo Platinum's operations which supplies feed to PlatMile's operations.
Production at joint venture entity Mimosa remained consistent.
Total cost of sales of $56 million was 10% lower compared to the pcp, despite a 3% increase in production, due
to a 7% weakening in the Rand/Dollar exchange rate. In Rand terms, total cost of sales were 3% lower compared
to the pcp. On an ounce cash cost basis, Kroondal's cash costs per ounce in Rand terms decreased 1% compared
to the pcp and decreased by 8% in Dollar terms due to the weaker Rand. Amortisation and depreciation of $6
million was comparable to the pcp.
Compared to the previous quarter ended June 2014, cash costs at Kroondal decreased by 4% per PGM ounce in
Rand terms. This decrease was driven by increased volumes and a continued focus on operational efficiencies as
well as building of ore stock piles which results in an accounting adjustment lowering costs. In Dollar terms
Kroondal's cash costs were 6% lower compared to the previous quarter ended June 2014 due to a weaker Rand
and increased ore stock pile levels.
Mimosa’s cash costs per PGM ounce decreased 3% compared to the pcp and increased 1% compared to the
previous quarter ended June 2014 after adjusting for one-off voluntary retrenchment costs.
Administrative costs of $1.7 million were in line with the pcp maintaining cost reduction initiatives taken by the
Aquarius Group. Finance costs include interest paid on borrowings of $1.5 million, non-cash interest accretion
on convertible bonds of $1.2 million and the unwinding of the rehabilitation provision of $1.2 million. Finance
costs for the quarter were 43% lower compared to the pcp following the $172.6 million bond buy back in May
2014.
Net operating cash inflow for the quarter of $6 million comprised $53 million inflow from sales, $48 million paid
to suppliers and $1 million interest received. Development and capital expenditure for the quarter was $6
million. Net financing cash inflows of $3.6 million included dividends of $4.5 million from Mimosa, $0.3 million
interest paid and $0.6 million of transaction costs paid relating to the rights issue and bond buyback.
The Group’s cash balance was $138 million at the end of the quarter, held as follows:
AQP $94 million
AQPSA $40 million
ASACS $1 million
Platmile $2 million
Ridge Mining $1 million
Total $138 million*
* Mimosa and Blue Ridge (in which Aquarius has a 50% equity interest) are accounted for using the equity
method. Cash held in these two entities at 30 September 2014 was $19 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 ($9.5 million) would have been included in Aquarius' Group cash balance.
(The segment note provided on page 10 details the income statement for each operating division of the
Aquarius Group.)
Consolidated Income Statement
Quarter ended 30 September 2014
$’000
Quarter Quarter Financial Year
Ended Ended Ended
Note 30/09/14* 30/09/13* 30/06/14
PGM production – Kroondal & Platmile 57,955 56,949 220,961
PGM production – Mimosa 28,900 27,555 110,681
Total PGM production 86,855 84,504 331,642
Revenue (i) 61,744 59,660 233,056
Cost of sales (including D&A) (ii) (56,453) (62,519) (231,158)
Gross profit/(loss) 5,291 (2,859) 1,898
Other income 48 11 174
Administrative costs (iii) (1,658) (1,661) (7,353)
Foreign exchange gain (iv) 417 1,967 1,843
Finance costs (v) (3,920) (6,828) (28,091)
Impairment losses (355) - (3,084)
Profit on repurchase of bonds - - 10,925
Profit on sale of assets 30 - 653
Closure, transition and rehabilitation
reversal/(cost) - (12) 5,342
Share of profit/(loss) from joint
venture entities (vi) 6,446 (1,304) 5,055
Profit/(loss) before income tax 6,299 (10,686) (12,638)
Income tax benefit/(expense) (vii) (1,085) 489 (544)
Net profit/(loss) 5,214 (10,197) (13,182)
Net profit/(loss) is attributable to:
Equity holders of Aquarius Platinum Limited 5,106 (10,228) (13,048)
Non-controlling interests (viii) 108 31 (134)
5,214 (10,197) (13,182)
Earnings per share
Basic earnings/(loss) per share (cps) 0.55 (2.17) (1.38)
* Unaudited
Notes on the September 2014 Consolidated Income Statement
(i) The 3% increase in revenue reflects increased production and improved PGM prices compared to the pcp.
In Rand terms aggregate revenue increased 11% due to higher Dollar prices (up 5%) and the impact of a
7% depreciation in the Rand compared to the pcp.
(ii) Lower aggregate cost of sales including D&A in Dollar terms despite a 3% increase in production was due
to a 7% depreciation of the Rand compared to the pcp. In Rand terms aggregate costs decreased by 3%.
Kroondal unit costs in Rand terms were 1% lower after stock pile movements compared to the pcp and
8% lower in Dollar terms due to a weaker Rand. Transfers to and from stockpile has a bearing on unit
costs due to the high fixed cost element of operating costs.
(iii) Administrative costs are consistent with the prior period.
(iv) The foreign exchange gain of $0.4 million is attributable to revaluation adjustments on cash balances held
in Rand, Australian Dollars and Pound Stirling, 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 of $1.5 million, non-cash interest accretion on
convertible bonds of $1.2 million and the unwinding of the rehabilitation provision of $1.2 million.
(vi) Represents share of profit of Mimosa and Blue Ridge, the joint venture entities.
(vii) Income tax expense consists of AQPSA deferred tax.
(viii) Non-controlling interests reflect the 8.3% non-controlling interest of Platinum Mile Resources (Pty) Ltd.
Consolidated Statement of Cash Flows
Quarter ended 30 September 2014
$’000
Quarter Quarter Financial Year
Ended Ended Ended
Note 30/09/14* 30/09/13* 30/06/14
Net operating cash inflow (i) 6,353 729 21,092
Net investing cash outflow (ii) (5,640) (4,352) (27,224)
Net financing cash inflow (iii) 3,607 13,902 62,271
Net increase in cash held 4,320 10,279 56,139
Opening cash balance 136,819 77,773 77,773
Exchange rate movement on cash (3,595) 2,845 2,908
Closing cash balance (iv) 137,544 90,897 136,820
* Unaudited
Notes on the September 2014 Consolidated Statement of Cash Flows
(i) Net operating cash flow for the quarter includes $53 million inflow from sales, $48 million paid to
suppliers and $1 million interest received.
(ii) Comprises $6 million of development and plant & equipment expenditure at AQPSA.
(iii) Includes dividends of $4.5 million from Mimosa, $0.3 million interest paid and $0.6 million of
transaction costs paid relating to the rights issue and bond buyback completed in the 2014 financial
year.
(iv) Mimosa and Blue Ridge (in which Aquarius has a 50% equity interest) are accounted for using the equity
method. Cash held in these two entities at 30 September 2014 was $19 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 the Aquarius' Group cash
balance.
Consolidated Balance Sheet
As at 30 September 2014
$’000
As at As at
Note 30/09/14* 30/06/14
Assets
Cash and cash equivalents 137,544 136,820
Current receivables (i) 30,963 30,104
Other current assets (ii) 15,332 15,246
Investments in joint venture entities (iii) 225,246 230,410
Mining assets (iv) 204,002 209,211
Intangible asset (v) 50,916 54,499
Other non-current assets (vi) 37,858 41,185
Total assets 701,861 717,475
Liabilities
Current liabilities (vii) 35,975 40,123
Non-current payables (viii) 1,984 2,065
Non-current interest-bearing liabilities (ix) 121,643 118,919
Other non-current liabilities (x) 78,902 82,600
Total liabilities 238,504 243,707
Net assets 463,357 473,768
Equity
Issued capital 73,244 73,216
Treasury shares (25,995) (26,239)
Reserves 765,750 781,692
Accumulated losses (355,345) (360,450)
Total equity attributable to equity holders of Aquarius 457,654 468,219
Non-controlling interests (xi) 5,703 5,549
Total equity 463,357 473,768
* Unaudited
Notes on the September 2014 Consolidated Balance Sheet
(i) Reflects debtors receivable on PGM concentrate sales.
(ii) Reflects PGM concentrate inventory, consumables, stores and critical spares.
(iii) Represents the investment in Mimosa, Blue Ridge and Sheba’s Ridge.
(iv) Includes Group 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) Includes the recoverable portion of the rehabilitation provision from Anglo Platinum of $9 million,
investments in rehabilitation trusts of $16 million and deferred tax asset of $12 million.
(vii) Includes trade creditors of $29 million, AQPSA finance leases of $2 million and provision for annual
leave of $4 million.
(viii) Includes rehabilitation obligations on P&SA1 and P&SA2 structures.
(ix) Comprises convertible bonds of $119 million and AQPSA equipment leases of $3 million.
(x) Includes deferred tax liabilities $16 million and provision for closure costs $63 million.
(xi) Reflects the 8.3% non-controlling interest of Platinum Mile Resources (Pty) Ltd.
Segment Note
Quarter ended 30 September 2014
$’000
Kroondal Marikana Everest Mimosa Plat Mile CTRP Blue Ridge Corporate/ Segment Reconciliation Consolidated
Unallocated Result to Consolidated
Information
Revenue 58,754 66 135 40,874 1,694 18 9 1,077 102,627 (40,883) 61,744
Cost of sales
- mining, processing and administration (46,984) (373)* (1,223)* (22,500) (1,490) (10) (232)* - (72,812) 22,748 (50,064)
- depreciation and amortisation (5,072) (51) (507) (4,586) (706) (51) - (1) (10,974) 4,585 (6,389)
Gross profit/(loss) 6,698 (358) (1,595) 13,788 (502) (43) (223) 1,076 18,841 (13,550) 5,291
Other income - - 73 - - 6 48 127 (79) 48
Administrative costs - - - - - - - (1,671) (1,671) 13 (1,658)
Foreign exchange gain/(loss) 4,572 - - (26) 76 - - (4,089) 533 (116) 417
Finance costs - - - - - - - (4,929) (4,929) 1,009 (3,920)
Impairment losses - - - - - - - (355) (355) - (355)
Profit on sale of assets - - - - - - - 30 30 - 30
Community share ownership trust - - - (1,000) - - - - (1,000) 1,000 -
Share of profit from joint venture entities - - - - - - - - - 6,446 6,446
Profit/(loss) before income tax 11,270 (358) (1,595) 12,835 (426) (43) (217) (9,890) 11,576 (5,277) 6,299
Income tax (expense)/benefit - - - - - - - (6,362) (6,362) 5,277 (1,085)
Net profit/(loss) from ordinary activities 11,270 (358) (1,595) 12,835 (426) (43) (217) (16,252) 5,214 - 5,214
On-mine EBITDA 16,011 (366) (1,063) 18,331 265 (10) (238) 12 32,942 (18,093) 14,849
*Consists of care and maintenance costs
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 0.55 per 200,000 man hours from 0.73 in the previous quarter
- Production increased 13% to 2,013,000 tonnes from 1,786,000 tonnes, quarter-on-quarter
- Head grade remained stable at 2.37 g/t
- Recoveries remained stable at 78%
- Volumes processed increased by 5% to 1,882,000 tonnes, quarter on quarter
- Stockpiles at the end of the quarter totalled approximately 167,000 tonnes
- PGM production increased by 6% to 112,248 PGM ounces, quarter-on-quarter
- Revenue in Rand terms increased by 4% to R1.24 million, quarter-on-quarter, due to improved basket prices
and higher PGM production
- Mining cash costs decreased by 4% to R537 per tonne, due to improved volume
- Unit cost per PGM ounce decreased 4% to R9,001 per PGM ounce
- Kroondal’s cash margin for the period increased from 17% to 20% quarter on quarter
Please refer to www.aquariusplatinum.com for the graph.
Commentary
Kroondal:
The 12 month rolling DIIR improved from 0.73 in the previous quarter to 0.55 and the 3 month DIIR rate
remained stable at 0.43. This follows the continued focus and management of safety performance. This
significantly improved safety performance notwithstanding, on 11 October 2014 a Kroondal employee, Pedro
Nhabinde, lost his life in a fall of ground at Kroondal’s Kwezi shaft. The Board and management of Aquarius
express their deepest condolences to his family and friends. The requisite inquiries and investigations by
management and the DMR are ongoing. The section 54 notice issued by the DMR after the fatal accident was
lifted on 21 October 2014.
Production for the quarter of 2 million tonnes was achieved notwithstanding different non-mining challenges
that were encountered at operations.
Operations at K6 remained very challenging inclusive of potholes. Kwezi Shaft was the best performing Shaft
during the quarter. There was a significant reduction in the number of Lost Blasts recorded for the quarter. The
ore split project which is designed to split the iron-rich ultramafic pegmatite (IRUP) which is situated at the
bottom of the main seam from the ore and hence improve recoveries is ongoing.
Kopaneng Shaft’s production performance has improved drastically since the underground workshop and the
new chairlift have been commissioned. Simunye Shaft has kept production steady despite challenges relating to
the availability of equipment. Bambanani Shaft has now connected the belts from Marikana 4 Shaft Western
Trunk to the main Shaft of Bambanani at Strike 5. Personal Detection Systems are being installed at both
Kopaneng and Kwezi and should be commissioned by the end of Q2.
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 9,001 7,392 7,168
Capital expenditure
Kroondal
(R’000 unless otherwise stated) Total Per 4E oz
Ongoing establishment of infrastructure 97,351 867
Project capital (K6 shaft) 5,405 48
Mobile equipment 20,308 181
Total 123,063 1,096
Kroondal mine: reconciliation of cash costs per 4E ounce
Cost per 4E ounce
(Rand)
Q1 2015 Q4 2014
Total operating expenditure 10,601 11,025
Less:
Ongoing capital expenditure & mobile equipment (1,048) (1,332)
Project capex (K6 shaft) (48) (287)
Transferred from/(to) stockpile (504) (10)
On mine cash costs 9,001 9,396
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.
Mines on care and maintenance
P&SA2 at Marikana (Aquarius Platinum – 50%)
Given the continuing low Rand PGM basket prices, Marikana 4 shaft, the remaining operating shaft, and the
processing plant at Marikana continue on care and maintenance until further notice.
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.
MIMOSA INVESTMENTS (Aquarius Platinum – 50%)
- 12-month rolling average DIIR was 0.05 per 200,000 man hours worked
- Production increased by 1% to 655,034 tonnes, quarter-on-quarter
- Head grade decreased by 1% to 3.64 g/t
- Recoveries increased by 1 % to 78%
- Volumes processed decreased by 2% to 635,761 tonnes
- Stockpiles at the end of the quarter totalled approximately 184,375 tonnes
- PGM production decreased by 5% to 57,799 PGM ounces quarter-on-quarter, due to a planned 4 day plant
shutdown in the quarter
- Revenue increased by 4% to $82 million, from $79 million in the previous quarter due to higher metal prices
- Mining cash costs decreased by 15% to $72 per tonne, and costs per PGM ounce by 10% to $815 due to a
reduction in labour costs as a result of the voluntary retrenchment exercise in the prior year.
- Stay-in-business capital expenditure was $95 per PGM ounce for the quarter
- Gross cash profit margin for the period increased from 30% to 41%
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 10% lower than the previous quarter due to
reduction in labour costs as a result of the voluntary retrenchment exercise in prior year.
4E 6E 4E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu & Co)
Mimosa 815 769 521
Capital expenditure
The total capital expenditure for the first quarter amounted to $5.5 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 was 1 million tonnes
- Head grade of feed material was 0.58 g/t
- Recoveries were 9%
- Production was 1,831 PGM ounces
- Cash costs increased was R8,789 per PGM ounce
- Revenue was R19 million for the quarter
- The cash margin for the period was 11%
Commentary
Platinum Mile:
The Platinum Mile Operation recommenced production in July 2014 following the end of the strike at Anglo
Platinum. The operation is in build up phase and is expected to reach steady state production in the next
quarter. Whilst the operation is in build-up phase operating costs per unit will not be reliable. Present unit cash
costs for this quarter of R8,789 are expected to reduce as the plant attains steady state production.
Expansion
The coarse grinding mills were successfully hot commissioned during the current quarter and the production
ramp-up and plant optimisation process has progressed satisfactorily. The next quarter should see increased
yields in recoveries as a result.
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 8,789 7,576 7,068
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum – 50%)
This operation remains on care and maintenance.
CORPORATE MATTERS
Board Changes
Aquarius Chairman, Mr Nicholas Sibley, has advised that he will step down from the Board on 28 February 2015
after being a non-executive director for 15 years and Chairman since 2002. Mr Sibley will be replaced by Sir Nigel
Rudd who will join the Board on 1 November 2014 and resume the Chairmanship on 1 March 2015. Sir Nigel has
been involved with South African companies for over 25 years and for the last seven has been a non-executive
director of Sappi where he is their lead director. He is a founder shareholder of Atlas Mara which has interests in
banking in Southern Africa including Zimbabwe.
Potential sale of non-core assets
Sale of Kruidfontein prospecting right
The previously announced sale of Kruidfontein is unconditional. In terms of the contract the gross sale proceeds
of $27 million are due to Aquarius before 1 December 2014. Upon receipt of the proceeds Aquarius has an
obligation to pay the previous owners $10.8 million either in cash or in Aquarius shares at the price prevailing at
receipt of the principle. Shareholders will be updated in this regard in due course.
Terminated sale of 50% interest in Blue Ridge
Aquarius released an announcement on 15 October 2014 in which it confirmed that following the non-fulfilment
of certain conditions precedent the agreement in terms of which it had conditionally disposed of its interest in
the Blue Ridge mine had lapsed.
Blue Ridge remains non-core to Aquarius and it will continue to assess all alternatives to extract value from its
investment including a sale of the mine as a going concern or in the alternative a sale of the mine plant and
assets.
Growth projects
As part of our year-end results presentation in August 2014, Aquarius advised that a number of incremental
growth projects had been identified and were in different phases of assessment. A brief update is provided
below and a comprehensive update will be provided as part of the half-year results release in February 2015.
- The additional milling capacity which was installed at Plat Mile has been commissioned and is operating to
expectations;
- The 30% Mimosa expansion pre-feasibility study is underway and is expected to be completed by the time
our half year results are announced in February 2015;
- The Kroondal tailing retreatment project planning continues but execution is being delayed because of
delays in obtaining the integrated water use license. A specific update will be included in the interim results
announcement;
- Good progress has been made in terms of studying the alternatives available to extract value from the
Everest infrastructure and discussions with a number of entities are ongoing. Everest will not re-commence
production unless the Board is of a view that it is able to generate an appropriate return for shareholders.
Balance sheet
Following the successful rights issue implemented earlier in 2014 Aquarius has a sustainable balance sheet with
net cash. The Board is of a view that retaining a sustainable level of debt on balance sheet is appropriate.
Statistical information: Kroondal P&SA1
Please refer to www.aquariusplatinum.com for the above.
Statistical information: Mimosa
Please refer to www.aquariusplatinum.com for the above.
Note:
* Mimosa cash cost per PGM ounce in Quarter June 2014 of $908 Includes one off voluntary retrenchment costs of
$105 per 4E oz. Unit cash costs for the June 2014 quarter adjusted for "once off" voluntary retrenchments were
$803 per PGM ounce.
Statistical information: Platinum Mile
Please refer to www.aquariusplatinum.com for the above.
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
Chief Operating Officer
Robert Schroder
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
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 September 2014, the Company had on issue 1,464,872,899 fully paid common shares.
Substantial shareholders 30 September 2014 Number of Shares Percentage
HSBC Custody Nominees (Australia) Limited 131,003,316 8.94
JP Morgan Nominees Australia Limited 59,667,591 4.07
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
24 October 2014
Glossary
A$ Australian Dollar
Aquarius or AQP Aquarius Platinum Limited
APS Aquarius Platinum Corporate Services Pty Ltd
AQPSA Aquarius Platinum (South Africa) (Pty) Ltd
ASACS 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 former 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
Date: 24/10/2014 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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