Wrap Text
Production Results to 31 December 2015
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
ISIN Code: BMG0440M1284
JSE Share Code: AQP
Second Quarter 2016: Production Results
Production Results to 31 December 2015
Highlights
- Attributable production from operating mines up 0.5% compared to previous corresponding period,
quarter ended December 2014(pcp), but lower by 4% quarter-on-quarter
- Kroondal recorded its highest Q2 production since 2011 and production at both Kroondal and Mimosa
well ahead of guidance
- Average US$ PGM basket price decreased 7% for the quarter – down 27% compared to pcp
- Kroondal PGM basket price increased 3% on average (due to the 10% weakness in the ZAR/Dollar
exchange rate) to R11,206 per PGM ounce quarter-on-quarter - down 12% compared to the pcp
- Mimosa PGM basket price decreased 12% on average to $890 per PGM ounce quarter-on-quarter -
down 26% compared to the pcp
- The Rand weakened against the US Dollar 10% on average quarter-on-quarter – down 23% compared to
the pcp
- Cash costs at Kroondal were slightly down to R9,112 per PGM ounce quarter-on-quarter – up 2%
compared to the pcp
- Cash costs at Mimosa further reduced by 3% to $772 per PGM ounce quarter-on-quarter - down 2%
compared to the pcp
- Track record of excellent cost management continues with costs at both Kroondal and Mimosa at lower
levels than 3 years ago despite substantial increases input costs such as labour, electricity and other
costs
- Aquarius redeemed the outstanding Convertible Bonds which it issued in December 2009 at their
principal amount outstanding of $125 million in the quarter
- Cash balance at quarter end of $42 million with a further $2 million attributable to Aquarius in JV
entities.
Q2 2016 Operating Results Summary
Kroondal Mimosa PlatMile
4E PGM production
Total (100% basis) 114,842 58,019 2,968
Attributable 57,421 29,010 2968
4E basket price
R/oz 11,204 10,743
$/oz 797 818 756
Cash costs (4E basis)
R/oz 9,112 8,377
$/oz 648 772 590
Cash margin (%) (7) 4 (1)
Stay-in-business capex
R/oz 754 -
$/oz 54 186.37 -
Commenting on the results, Jean Nel, CEO Aquarius Platinum said:
Both Kroondal and Mimosa produced ahead of guidance and at reduced costs during the quarter. Kroondal’s production
th
performance deserves particular mention as Q2 was Kroondal’s 12 consecutive quarter of higher than 105 000 PGM
quarterly production and H1 production was highest since 2007. The fact that both Kroondal and Mimosa’s PGM unit costs
are lower today than 3 years ago despite steep increases in labour, electricity and other costs is testimony to excellent
operational management for which Rob Schroder and Winston Chitando and their teams deserve credit. That said, the lower
PGM prices experienced during the quarter impacted both Kroondal and Mimosa. In order to ensure sustainability in this
macro environment (US$ PGM prices fell to the lowest level in more than a decade) further cost saving initiatives were
implemented at Kroondal, and specifically Mimosa, which management expects to result in unit costs reducing further going
forward.
In relation to the proposed Amalgamation between AQP and Sibanye, following the approval by AQP shareholders of the
Amalgamation in general meeting on 18 January 2016, AQP continues to co-operate with Sibanye in fulfilling the remaining
conditions precedent to the Amalgamation Agreement and AQP shareholders will be advised of any material progress in due
course.
Production by mine attributable to Aquarius (Operating mines)
Quarter ended
PGMs (4E)
Dec 2015 Sept 2015 % Change Dec 2014 % Change
Kroondal 57,421 58,418 (2) 55,557 3
Mimosa 29,010 31,205 (7) 30,421 (5)
PlatMile 2,968 3,890 (24) 2,996 48
Total 89,399 93,513 (4) 88,974 0.5
Average PGM basket prices achieved at Aquarius operations
US$ per PGM ounce Quarter ended
(4E) Dec 2015 Sept 2015 % Change Dec 2014 % Change
Kroondal 797 852 (6) 1,090 (27)
Mimosa 818 890 (8) 1,111 (26)
Platinum Mile 756 860 (12) 1,090 (31)
Weighted Avg. 802 865 (7) 1,097 (27)
Aquarius Group quarterly attributable production (PGM ounces) to 31 December 2015
Please refer to www.aquariusplatinum.com for the graph.
PGM markets update
Platinum price fell in the final months of the year, despite moving 9.8% higher across October, ending the
quarter below the $900/oz level to finish at circa $877, a fall of 1.2% across the quarter. Palladium prices also
moved lower across the period, falling significantly in November as the metal fell over 18%, stabalising across
December to finish around the $562/oz level.
Macro concerns continued to impact the prices of precious metals with the main factors impacting demand
across the month including: impact of the VW scandal and continued demand and supply concerns of the PGM
complex in China.
The impact of the VW “dieselgate” scandal intially saw a decrease in the demand for Platinum and an increase in
Palladium demand throughout late September. However, despite an initial rally for Palladium, gains were rapidly
given back as Palladium prices fell through US$600/oz. The longer term implications of the VW issue remain
somewhat unclear with either demand for Palladium increasing as the primary metal for gasoline catalysts,
whilst diesel volume sales will determine the demand for Platinum as the dominant metal.
Supply in Platinum remained relatively robust and despite weaker US$ prices, the weakness in the rand and
ruble also resulted in a softer fall in prices for the South African producers which in turn saw supply remain more
resilient. Meanwhile demand looks set to grow for platinum but the pace of this growth is unclear. Autocats,
which equate to circa 43% of platinum demand, look set to remain relatively resilient as the US continues the
strong run, whilst threats include movement away from diesel engines following the VW scandal.
The rand has endured a torrid weakening run, this year, falling 34% across 2015 from the starting level of circa
R11.55/US$1 and breaking through the R14/US$1 level in early November and continuing this
trend.
Specific PGM prices commentary
The price of Platinum fell 1.2% over the quarter, finishing at $877/oz with an average price of $908/oz.
Palladium moved down 13.8% to $563/oz with an average price of $617 over the quarter. Gold also reported
negative gains across the quarter and reversed gains from the last quarter as it moved 4.8% lower, finishing at
1061/oz, with an average price of $1104/oz.
12-month individual PGM prices to 31 December 2015 (US$/oz)
Please refer to www.aquariusplatinum.com for the graph.
12-month PGM basket prices to 31 December 2015 (US$ and ZAR per PGM basket ounce)
Please refer to www.aquariusplatinum.com for the graph.
12-month ZAR price to 31 December 2015 (ZAR/US$)
Please refer to www.aquariusplatinum.com for the graph.
Operating Review Summary (all numbers on 100% basis)
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum - 100%)
P&SA1 at Kroondal (Aquarius Platinum – 50%)
- 12-month rolling average DIIR per 200,000 man hours improved 21% to 0.50, quarter on quarter
- Production decreased to 1,873,000 tonnes from 1,934,000 tonnes, quarter-on-quarter
- Head grade decreased to 2.45 g/t from 2.50 g/t
- Recoveries increased by 1% to 80%
- Volumes processed lower at 1,810,000 tonnes
- Stockpiles at the end of the quarter totalled approximately 205,341 tonnes
- PGM production decreased by 2% to 114,842 PGM ounces, quarter-on-quarter
- Revenue in Rand terms increased by 4% to R978 million, quarter-on-quarter, due to the weakening of
the rand
- Mining cash costs decreased by 1% to R578 per tonne
- Unit cost per PGM ounce decreased 0.1% to R9,112 per PGM ounce, Kroondal’s cash margin for the
period improved from -13% to -7%
Kroondal: Production, Cash Cost and Price Analysis
Please refer to www.aquariusplatinum.com for the graph.
Capital Expenditure
Kroondal
(R’000 unless otherwise stated) Total Per 4E oz
Ongoing establishment of 83,958 731
infrastructure
Project capital 2,688 23
Mobile equipment 18,787 164
Total 105,432 918
Commentary
Kroondal:
The 3 month DIIR rate increased from 0.38 to 0.48 (two additional accidents in the current quarter) however the
12 month DIIR improved to 0.50 from 0.65. Seven Section 54 instructions were issued during the quarter.
Production at Kroondal for the quarter was down 3% to 1,873,000 tons quarter-on-quarter due to production
challenges at Simunye and Kopaneng however was credibly up 4% compared to the previous corresponding
quarter, December 2014 (pcp).
Kroondal achieved its twelfth consecutive +105,000 PGM production quarter. Unit costs in Rand terms continued
to respond positively down 0.1% quarter on quarter and up 2% compared to the PCP in spite of South Africa’s
inflation rate of approximately 6%.
Bambanani, K6 and Kwezi produced ahead of business plan. Kopaneng focussed on improving safety and
showed a positive production improvement in the last month of the quarter. Simunye’s challenge with machine
availability continued during the quarter and resulted in some structural changes in the machine maintenance
methodology. The December break was used to complete additional maintenance and repairs to certain units in
the fleet.
The raise bore hole at Kopaneng was holed, during the Quarter and equipping is expected to be completed in
Quarter three. Both the other two raise bore holes scheduled for BP 16, at Simunye and Kwezi are on schedule
with the piloting having been started at Simunye.
Grade declined for the quarter and management control systems were improved on to assist in the general
management of ore quality delivered, these include waste management/ accounting and also real time Stope
Width recording and reporting.
Although the plants managed to improve on recoveries, production for the quarter was down due to a section
54 issued against the K2 plant which resulted in AQPSA delivering reduced ounces for the quarter.
Operating cash costs per ounce
Unit cash cost per PGM ounce in Dollar terms (before by-product credits) was 9% lower quarter-on-quarter
mainly due to the weaker Rand which depreciated 10% quarter-on-quarter. Dollar unit cash costs compared to
the pcp were 19% lower due to a 26% weakness in the Rand.
In Rand terms, Kroondal's unit costs for the three months to 31 December 2015 were 0.1% lower and only
increased 2% compared to the pcp. This is a very credible performance with operating costs contained below
inflationary levels of approximately 6% for the third consecutive year.
Kroondal mine: reconciliation of cash costs per 4E ounce
Cost per 4E ounce (Rand)
Q2 2016 Q1 2016
Total operating expenditure 10,255 10,249
Less:
Ongoing capital expenditure & mobile equipment (895) (619)
Project capex (23) (46)
Transferred from/(to) stockpile (225) (461)
On mine cash costs 9,112 9,123
MIMOSA INVESTMENTS (Aquarius Platinum – 50%)
- 12-month rolling average DIIR was 0.21 per 200,000 man hours worked
- Production increased marginally to 656,844 tonnes, quarter-on-quarter
- Head grade decreased by 1% to 3.63 g/t, quarter-on-quarter
- Recoveries were consistent at 78.6%
- Volumes processed decreased by 5 % to 638,652 tonnes
- Stockpiles at the end of the quarter decreased by 2% to 133,219 tonnes
- PGM production decreased by 4% compared to PCP and by 7% to 58,019 PGM ounces quarter-on-
quarter
- Revenue decreased by 13% to $46 million from $53 million quarter-on-quarter
- Mining cash costs per PGM ounce at $772, was 3% lower quarter-on-quarter
- Stay-in-business capital expenditure was $186 per PGM ounce for the quarter
- Gross cash profit margin for the period increased from 4% to 7%
Mimosa: Production, Cash Cost and Price Analysis
Please refer to www.aquariusplatinum.com for the graph.
Safety, Health and Environment
- No fatality was recorded during the quarter.
- Two LTIs were recorded during the quarter.
- No restricted work case was recorded during the quarter.
- Three minor injuries occurred during the quarter.
- The 12 month rolling LTIFR as at the end of the quarter was 0.13.
Regretfully subsequent to the end of the quarter an employee was fatally injured whilst working underground
on 4 January 2016. There were no other injuries.
Operations
Operating cash costs per ounce
Unit cash cost per PGM ounce (before by-product credits) were 3% below the previous quarter. In response to
the sharply lower metal prices, Mimosa implemented a number of significant cost cutting initiatives during the
quarter which will result in operating costs reducing significantly in H2..
Capital expenditure
Total capital expenditure for the second quarter amounted to $10.8 million. Expenditure was incurred mainly on
mobile equipment, support & drill rigs and LHDs, the conveyor belt extension, down dip development and
ventilation walls.
Mining operations
Mimosa mine operated very well during the quarter, with cordial industrial relations and meeting most of its
production targets. A total of 651,629 tonnes of ore were blasted for the quarter under review with blasted
grades of 1.910g/t Pt. and 0.158% Ni. The blasted tonnage represents a 2.7% increase compared to the previous
quarter’s 634,396 tonnes. Most teams mined through poor ground conditions during the quarter resulting in
preparation constraining the ore generation cycle.
Hoisted tonnage for the quarter at 656,844 tonnes was 0.4% above previous quarter`s tonnage of 654,127
tonnes. Hoisting performance is expected to improve in line with the anticipated improvement in the amount of
blasted ore.
Processing plant
The milled tonnage for the second quarter at 638,652Mt was 5% below the 671,507Mt achieved in the previous
quarter. Tonnes milled were lower in the quarter as a result of plant stoppages associated with the rainy season
mainly lightning which often results in power dips as well as a breakdown of the plant mill motor.
At 79.1% platinum recovery was slightly less than the 79.2% achieved in the previous quarter with 4Es recovery
at 78.6% slightly less than 78.7% achieved in the previous quarter. The Process Team continues to focus on
initiatives to improve recoveries further.
15% Export Levy on un-beneficiated PGMs/ Deductibility of Royalties
In the 2016 National Budget presentation, the deferment of the VAT on un-beneficiated platinum to 1 January
2017 was confirmed. However, the subsequent Finance Bill and Finance Act of 2016 did not include the
deferment. Management is continuing engagements to have the deferment gazetted in a Statutory Instrument
that will give legal effect to the deferment.
Royalties
The 2016 National Budget was silent on the non-deductibility of royalties for income tax purposes.
The proposal to render royalties payable by Mimosa non-deductible for income tax purposes was implemented
with effect from the year of assessment beginning on 1 January 2014, and therefore impacted Mimosa from the
start of the 2014 financial year on 1 July 2013. This position has remained in the 2016 national budget and
hence Mimosa continues to provide for royalties on a non-deductible basis in its financial statements. The
financial impact of the non-deductibility of royalties for the six months ended December 2015 was US$1.7
million, 50% of which is attributable to Aquarius. Negotiations are continuing with the authorities to confirm that
the royalties are deductible for income tax purposes.
Indigenisation
The Minister of Youth, Indigenisation and Economic Empowerment gazetted the frameworks, templates and
th
procedures for implementing the indigenization policy on the 8 of January 2016. The proposed frameworks
simply provide clarity on the indigenisation law and its implementation, and the Indigenisation Act remains
unchanged.
Mimosa continues to interact with the Ministry of Indigenisation and Ministry of Mines to work towards a
sustainable solution in relation to indigenisation.
TAILINGS OPERATION
Platinum Mile - PMR (Aquarius Platinum – 91.7%)
- Material processed decreased 4% to 1,124 million tonnes - quarter on quarter
- Head grade decreased to 0.57 g/t from 0.58 g/t – quarter on quarter
- Recoveries decreased to 15%, down from 19% quarter on quarter
- Production decreased to 2,968 PGM ounces
- PGM ounces Cash costs increased 21% to R8,377 per PGM ounce
- Revenue decreased to R25 million for the quarter
- Cash margin for the quarter was (1)%, a decrease from 23% in the previous quarter
Anglo Platinum started the commissioning of their tailings re-treatment facility in the quarter. During the start-
up feed from this section was understandably erratic and negatively impacted PMR's flotation stability and
recoveries.
At the end of the quarter PMR had implemented feed stability through level and flow control utilizing UG2 feed
to keep the flow to the rougher circuit constant and maximized, which management expects should impact
recoveries positively.
Operating cash costs per ounce
4E 6E 4E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu& Co)
Platinum Mile 8,377 7,257 6,745
MINES UNDER CARE AND MAINTENANCE
P&SA2 at Marikana (Aquarius Platinum – 50%)
Given the continuing low Rand PGM basket prices, Marikana 4 shaft, the remaining operating shaft, and the
processing plant at Marikana continue on care and maintenance until further notice.
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum – 50%)
This operation remains on care and maintenance.
CORPORATE MATTERS
Convertible bonds
Aquarius Platinum Limited (Company) redeemed the outstanding Convertible Bonds which it issued in December
2009 (Convertible Bonds). The Convertible Bonds were redeemed at their principal amount outstanding of
$125.4 million.
Update on Takeover Offer
Aquarius Platinum Limited shareholders approved the Amalgamation Agreement and Amalgamation on 18
January 2016. The approvals were a condition precedent to the transaction between the Company and Sibanye
Gold Limited proceeding. The only outstanding regulatory approvals required for the transaction to proceed are
those of the South African Competition Commission and the Competition Tribunal (refer section 1.9 of the
Explanatory Memorandum of the Meeting Materials for further detail). Once these competition approvals have
been obtained, a timetable of events leading up to the date for payment of the consideration will be announced
to ASX, LSE and JSE and published on Aquarius’ website at www.aquariusplatinum.com.
Annual General Meeting
Aquarius Platinum Limited advise that the resolutions put to the meeting on 18 January 2016 were carried by the
requisite majority.
Statistical information: Kroondal P&SA1
Please refer to www.aquariusplatinum.com for the table.
Statistical information: Mimosa
Please refer to www.aquariusplatinum.com for the table.
Statistical information: Platinum Mile
Please refer to www.aquariusplatinum.com for the table.
Issued capital
At 31 December 2015, the Company had on issue: 1,508,344,873 fully paid common shares.
Substantial shareholders 31 December 2015 Number of Shares Percentage
HSBC Custody Nominees (Australia) Limited 108,473,857 7.19
Chase Nominees Limited 58,565,718 3.88
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 1, Suite 6, SOUTHPOINT, 100 Mill Point Road, South Perth WA 6151, Australia
Postal Address: PO Box 485, South Perth, WA 6951, Australia
Telephone: +61 (0)8 9367 5211
Facsimile: +61 (0)8 9367 5233
Email: info@aquariusplatinum.com
For further information please visit www.aquariusplatinum.com or contact:
In the United Kingdom and South Africa: In Australia:
Jean Nel Willi Boehm
+27 (0)10 001 2843 +61 (0) 8 9367 5211
28 January 2016
Date: 28/01/2016 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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