| Thu 26 Apr 2007, 8:30 | | AQP - Aquarius Platinum - Third Quarter 2007 Finan |
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AQP
AQP
AQP - Aquarius Platinum - Third Quarter 2007 Financial & Production results
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1029
("Aquarius Platinum")
26 April 2007
Aquarius Platinum Third Quarter 2007 Financial & Production results
PGM price rises significantly enhance group profitability
Highlights of the Third Quarter
Attributable production for Q3 2007 increased 3.7% to 124,577 PGM ounces
compared to Q3 2006
Revenue and profits report strong increases compared to Q3 2006
Consent received to complete buyback acquisition of 3.5% of South African
subsidiary
Quarterly Financial Highlights
Comparable net quarterly profit up 158% to $47.9 million (US 56.3 cents per
share)
Comparable cash profit up 118% to $58.3 million (US 68.9 cents per share)
Group consolidated cash position has risen by $79.4 million since December
2006 to $343 million
P&SA1 at Kroondal
Production 102,079 PGM ounces (Aquarius attributable: 51,039 PGM ounces)
Underground development to be extended to provide for improved mining
flexibility
New K5 Shaft on plan and on budget
Cash margin increased 10% for the quarter to 71%
P&SA2 at Marikana
Production 30,148 PGM ounces (Aquarius attributable: 15,074 PGM ounces)
Underground production contributed 33% of total tons produced as P&SA2
implementation continues apace
DMS plant continues to enhance performance
Gross cash margin for the quarter decreased 8% to 46%
Everest
Production 40,107 PGM ounces
Underground ramp-up continues, providing 87% of total tons
Plant performance enhanced by implementation of advanced flotation process
control systems
Gross cash margin for the quarter increased 18% to 66%
Mimosa
Production increased 4% to 34,760 PGM ounces (Aquarius attributable: 17,380
PGM ounces)
Wedza Phase V in progress
Gross cash margin increased 6% for the quarter to 72%
CTRP
Production increased 5% to 1,954 PGM ounces (Aquarius attributable: 977 PGM
ounces)
Gross cash margin for the quarter steady at 77%
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said,
"Once again, strong metal prices have played their part and helped us to
deliver good profits and add significantly to the group cash position.
However, the commodity prices mask some challenging operating conditions,
with production falling in the traditionally dull third quarter due to
seasonal issues, industrial relations and geological conditions, however
Aquarius is not unique in this regard. In planning for the long-term, we
have decided to take a more strategic approach to how we operate our mines
and have therefore embarked on a program of increasing development across
our operations to provide improved face availability and add redundancy and
mining flexibility for the long-term. We believe that this strategy is
prudent and will pay dividends in the long term, ensuring that we will
continue to deliver superior returns for our shareholders."
Metals Prices and Foreign Exchange
Platinum, palladium, rhodium and gold all reported price increases over the
quarter. Ongoing production and supply concerns in both South Africa and
Russia pushed platinum higher, notably into the fourth quarter when rumours
of a platinum ETF resurfaced. Platinum closed the period 10% stronger at
$1,244 per ounce. Sister metal palladium added 6% over the quarter.
Despite considerable above ground stocks, palladium is enjoying an improved
outlook owing to its considerable discount to platinum and substitution
opportunities in autocatalysts and as a cheaper jewellery metal in China.
Rhodium once again led the charge for the platinum group metals, adding $650
an ounce over the quarter to close at $6,200 per ounce. While speculation
would appear to account in part for these gains, rhodium`s unique
autocatalyst and flat screen glass applications continue to see strong
demand set against supply constraints. Indeed, like all the platinum group
metals, rhodium prices have continued to advance into the fourth quarter.
PGM basket prices reported a strong performance, buoyed by price increases
across the board for platinum, palladium, rhodium and gold. At South
African operations the 4 element basket price comfortably broke through
R10,000 per PGM ounce, to average an achieved price of R10,054 per PGM ounce
for the quarter, equal to $1,399 per PGM ounce in dollar terms. In
Zimbabwe, the average achieved basket price for the quarter was $950 per PGM
ounce. Once again by-products iridium, ruthenium, nickel and copper all
reported strong price increases, and for the quarter collectively accounted
for 8.6% of revenue at South African operations and 36% of revenue at the
Mimosa mine in Zimbabwe.
The Rand Dollar exchange rate marched a steady course through the quarter,
opening at 6.97 and closing at 7.29. The average exchange rate achieved at
South African operations was 7.18.
Aquarius announces consolidated earnings for the quarter to 31 March 2007 of
$47.9 million (US 56.3 cents per share) as the Group continues to deliver
increased profits at a time of good PGM metal prices. The results represent
a 158% increase compared to the previous corresponding period, March 2006.
Cash earnings (before depreciation and amortisation) were $58.3 million (US
68.9 cents per share).
Production of PGMs attributable to shareholders of Aquarius was 124,577 PGM
ounces, down 9% from the previous quarter ended December 2006. Lower
production in the quarter was due to a combination of an extended holiday
period, labour shortages, industrial relations issues and equipment failures
in Zimbabwe.
Revenue for the quarter, net of currency adjustments, was $197.7 million.
Higher PGM metal prices recorded during the quarter, up an average 12%,
supported a strong cash flow stream resulting in an increase in Group cash
of $79.4 million for the quarter. Finance charges for the quarter were
consistent at $3.3 million. This included a non-cash interest charge of
$0.8 million being the unwinding of the discount relating to the movement in
the net present value of the Kroondal and Marikana rehabilitation
provisions. Interest income for the quarter was $4.9 million, up $1.9
million from the previous quarter reflecting increased cash reserves at the
Group.
Cost of sales on a unit of production basis were up for the quarter due to
lower production, ongoing development costs, notably at the Kroondal K5
Project and fluctuating grade achieved and lower concentrator recovery
levels.
Depreciation and amortisation was higher at $8.7 million. Amortisation
arising from the fair value uplift of mineral rights at $1.6 million was in
line with the previous corresponding period.
Aquarius group cash balances at 31 March 2007 were $343.0 million, an
increase of $79.4 million since December 2006. Material cash flow items
(other than mine operations) that affected cash balances during the quarter
included capital expenditure of $7 million, $6.3 million in income tax paid
and dividends paid of $10 million. Included in the cash balance is R342.5
million earmarked for the buyback of 3.5% of AQPSA from SavCon, anticipated
in April.
Kroondal`s cash costs per ROM ton for the quarter increased by 6% to R224
per ton compared to R211 in the previous quarter, due to decreased volumes.
Cash costs per PGM ounce increased by 10% to R3,281 due mainly to the new K5
shaft ramping up and the decreased PGM production due to lower volumes and
grade variance. These costs include R366 per PGM ounce of decline
development costs comprising ledging and sinking. Secondary development
costs represented R70 per PGM ounce.
Marikana`s cash costs per ROM ton for the quarter increased by 32% to R395
per ton due to a 23% decrease in production for the quarter. Lower
production at Marikana was due to similar reasons as experienced at Kroondal
being the extended holiday period and labour shortages caused by industrial
actions. On a PGM ounce basis, cash costs increased by 44% to R5,977 per PGM
ounce due to a higher stripping ratio at the open pit, lower concentrator
recoveries at 62%, down 11% from the prior quarter due to increased amounts
of oxidised ore and a 33% increase in decline development cash costs which
accounts for R577 per PGM ounce
Everest`s cash costs per ROM ton for the quarter increased by 13% to R258
per ton due to the higher consumption of underground ore as opposed to open
pit ore. Open pit ore reduced to 13% of total production compared to 25% in
the previous quarter. Whilst costs per ROM ton increased due to the
increased ratio of underground mined tons, cash costs on a PGM ounce basis
decreased 2% to R3,504 per PGM ounce due to improved plant head grades (up
5%) and concentrator recoveries (up 11%).
Mimosa realised a cash cost per PGM ounce of US$396 (negative $154 per ounce
after by-product credits) compared with the previous quarter`s figure of
US$446 per ounce (negative $52 per ounce after by-product credits. By-
product revenue from base metals contributed 36% of gross revenue for the
quarter
The CTRP operation has recorded marginal improvements with production up to
1,954 PGM ounces (Aquarius` share: 977 PGM ounces).
Financials
Aquarius Platinum Limited
Consolidated Income Statement
Quarter ended 31 March 2007
$`000
Quarter ended* 9 Months ended* FY ended
31/03/07 31/03/07 30/06/06
Note:
Aquarius PGM Production
(attributable ounces) 124,577 401,724 447,693
Revenue (i) 189,584 520,358 426,569
Foreign exchange gain/
(loss) (ii) 8,131 5,217 13,228
Cost of Sales ( iii) (76,043) (214,866) (223,064)
Gross Profit 121,672 310,709 216,733
Amortisation of fair value uplift
of mineral properties (1,635) (5,391) (7,162)
Gross profit after amortisation
of fair value uplift 120,037 305,318 209,571
Admin & other operating
costs (2,692) (6,266) (8,027)
Other FX movements (iv) (2,147) 2,451 913
Finance costs ( v) (3,260) (10,582) (10,383)
Profit before tax 111,938 290,921 192,074
Income tax expense (30,840) (77,015) (51,071)
Profit after tax 81,098 213,906 141,003
Minority interest (vi) (33,168) (80,606) (55,373)
Net profit 47,930 133,300 85,630
EPS (basic - cents) 56.34 156.70 100.87
*Unaudited
Notes on the March 2007 Consolidated Income Statement
(i) Revenue higher due to improved PGM and base metal prices during the
quarter
(ii) Reflects effects of adjusting revenue recorded at time of production at
Kroondal, Marikana and (iii) CTRP to actual receipts received at the end of
the four month pipeline
(iv) Cost of sales per PGM ounce rose due to lower quarter`s production at
Kroondal and Marikana
(v)Reflects foreign exchange movements on net monetary assets
(vi) Finance costs includes group debt $0.6 million, pipeline finance $1.9
million and unwinding of rehab provision $0.8 million
(vii)Minority interests reflect 49.5% outside equity interest of the
Savannah Consortium (SavCon) and
(viii)Impala Platinum Holdings Limited (Implats) in AQPSA
Aquarius Platinum Limited
Consolidated Cash flow Statement
Quarter ended 31 March 2007
$`000
Quarter Nine Months Financial Year
Ended* ended* ended
31/03/07 31/03/07 30/06/06
Note:
Net operating cash inflow (i) 100,398 259,423 175,531
Net investing cash outflow (ii) (7,514) (33,003) (112,880)
Net financing cash outflow (iii) (7,668) (44,564) 27,161
Net increase (decrease)
in cash held 85,216 181,856 89,812
Opening cash balance 263,561 162,425 75,251
Exchange rate movement on cash (5,821) (1,325) (2,638)
Closing cash balance 342,956 342,956 162,425
* Unaudited
Notes on the March 2007 Consolidated Cash flow Statement
(i) Net operating cash flow includes $105 million inflow from operations,
income tax paid of $6.3 million and net finance income of $1.7 million
(ii) Reflects development and plant and equipment expenditure of $7.5
million
(iii) Includes dividend paid to shareholders $10 million and proceeds from
the exercise of employee options of $2.5 million
Aquarius Platinum Limited
Consolidated Balance Sheet
At 31 March 2007
$`000
Quarter Financial
Ended* Yearended
31/03/07 30/06/06
Note:
Assets
Cash assets 342,956 162,425
Current receivables (i) 90,362 66,721
Other current assets (ii) 23,739 19,828
Property, plant and equipment(iii) 207,921 206,626
Mining assets (iv) 275,296 247,601
Other non-current assets 9,013 6,994
Total assets 949,287 710,195
Liabilities
Current liabilities (v) 60,985 35,463
Non-current payables (vi) 120,933 130,104
Non-current interest-bearing
liabilities (vii) 35,877 45,372
Other non-current
liabilities (viii) 145,001 105,419
Total Liabilities 362,796 316,358
Net assets 586,491 393,837
Equity
Parent entity interest 428,266 315,559
Minority interest 1 58,225 78,278
Total Equity 586,491 393,837
* Unaudited
Notes on the March 2007 Consolidated Balance Sheet
(i) Reflects debtors receivable on increased PGM concentrate sales
(ii) Reflects PGM concentrate inventory
(iii) Represents fixed assets within the Group
(iv) Mining assets reflects Kroondal, Marikana, Mimosa and Everest mining
(mining rights) assets
(v) Includes tax payable ($22 million) and creditors ($38 million)
(vi) Includes BEE deferred settlement proceeds ($10.5 million) and non-
interest bearing portion of AQPSA shareholder loans (Implats $48 million and
SavCon $60 million)
(vii) Includes interest bearing debt payable to RMB ($27 million), interest
bearing shareholder loan SavCon ($7 million)
(viii) Reflects deferred tax liabilities $101 million and provision for
closure costs $44 million
Aquarius Platinum (South Africa) (PTY) Ltd (Aquarius Platinum 50.5%)
P&SA 1 at Kroondal
Safety
The 12-month rolling average DIIR for the quarter improved from 0.93 in the
previous quarter to 0.86 in the third quarter. The mine achieved a record
two million fatality free shifts on 23 February 2007, an excellent
performance. However a fatality occurred on 26 March 2007, at the far west
section of Central Shaft, when a belt attendant was fatally injured in a
conveyor belt related accident. An official inquiry was held by the DME and
a risk assessment was done by an external auditor.
Mining
The mine recorded production of 95,950 openpit tons and 1,398,000
underground tons
K5 Project remains on schedule
Head grade fell to 2.80g/t
Processing
Plant processed 1,497,000 tons
Production fell to 102,079 PGM ounces
Concentrator recoveries fell to 76.4% from 77.3% in the previous quarter
Revenue
Revenue at Kroondal increased 18% to R1.138 million for the quarter
(Aquarius share: R569 million). The increase was a result of a 11% increase
for the quarter in the $ PGM basket price. The cash margin for the quarter
increased to 71% compared to 64% in the previous quarter.
Operations
Production totalled 1,494,000 tons. Openpit production fell by 35% to
95,950 tonnes and underground production decreased by 8% to 1,398 million
tons. During the quarter, production was adversely impacted for the
following reasons:
10% reduction in production shifts due to the Christmas and New Year
holidays (falls into 3rd Quarter)
Slow start following the Christmas New Year break and shortage of critical
labour at that time
Work stoppages and go-slow action in certain pay grades
Tons processed declined by 10% to 1,497,000 tons, including 72,896 tons of
opencast material.
Over the quarter, stockpiles decreased to 36,000 tons. For the quarter a
tonnage discrepancy was recorded of 61,000 tons due to a 3% weightometer
error and a 1% moisture variance.
The head grade decreased to 2.80g/t compared to 2.85g/t in the previous
quarter. This reduction was due to the contribution of material from the
new K5 Shaft where excessive dilution was caused by an increase in the
hanging-wall waste parting and an increase in the internal waste.
Subsequent to the period end, the dilution has improved slightly.
Development decreased during the quarter for the same reasons as production;
however, development will increase in the fourth quarter to sustain the
necessary redundancy requirements. Although some momentum was lost on
development, the strategy at Kroondal will continue to provide for an
increase in development at current metal prices. This will ensure optimum
redundancy across the operation, and provide adequate face length to achieve
planned volumes into the future.
Plant recoveries decreased to 76.4% compared to 77.3% the previous quarter.
PGM production decreased by 13% to 102,079 PGM oz (Aquarius attributable:
51,039 PGM ounces).
Operating Cash Costs
Cash costs increased by 6% to R224 per ROM ton. Consequently, cash costs
per PGM ounce for the quarter increased by 10% to R3,281. The increase in
cost is mainly due to the new K5 shaft ramping up and the decrease in PGM
production due to lower volumes and grade variance.
Operating cash costs include ledging and primary development costs of R366
per PGM ounce (down 15% on the previous quarter), secondary development
costs of R70 per PGM ounce (down 7% on previous quarter) and engineering
infrastructure costs of R235 per PGM ounce (down 3% on previous quarter).
Cash cost of stoping for Kroondal was R2,610 per PGM ounce, a 17% increase
compared to the previous quarter. It should also be noted that operating
costs also include costs associated with the new K5 shaft of R171 per PGM
ounce. The K5 Shaft is in a ramp-up phase and therefore attracts high
relative unit costs at this stage.
K5 Project Capital Expenditure
During the quarter R42 million was spent on amongst others: R22 million for
initial strike and dip conveyor extensions; R10 million for K5 surface
infrastructure and dip conveyor extensions and R9 million on the K5 rail-
link.
K5 Project
The appointed contractor Deilmann-Haniel (SA) (Pty) Ltd continues to perform
satisfactorily.
During the quarter, a total of 783 meters of development were completed,
including 526 meters decline sinking. The mining of the chairlift
excavation re-commenced following completion of the No. 1 vent raise. The
drop-raise from the base of No. 1 vent shaft to the reef horizon was
completed with the temporary fan arrangement now being installed.
Stoping and development are progressing well against a backdrop of some
challenging geological conditions, most notably, variations in the parting
widths between both the main and leader reefs and also within the leader
reef itself. These variances coupled with numerous small faults create
higher than anticipated mining widths requiring extra support and resulting
in higher dilution.
P&SA2 at Marikana
Safety
The 12-month rolling DIIR improved from 0.43 to 0.36.
Mining
The mine recorded production of 296,546 openpit tons and 146,564 underground
tons
At the end of the quarter, the stockpile decreased 7% to 183,000 tons
Processing
Total of 456,522 ROM tons were processed during the quarter
Recoveries fell to 62% due to a higher feed of oxidised opencast material
Production decreased 23% to 30,148 PGM ounces (Aquarius attributable: 15,074
PGM ounces)
Revenue
The PGM basket price for the quarter averaged $1,369 per PGM ounce, 8%
higher than the previous quarter. Mine revenue increased to R333 million
for the quarter (AQPSA share R167 million). The cash margin for the quarter
fell to 46% from 50%.
Operations
Total production decreased 22% to 443,110 ROM tons for the quarter, with one
third coming from underground production and two thirds from openpit.
Openpit production decreased by 22% to 296,546 tons. During the quarter,
production was adversely impacted due to the following reasons:
20% reduction in production shifts due to the Christmas New Year holidays
(falls into 3rd Quarter)
Slow start following the Christmas break and shortage of critical labour
Work stoppages and go-slow action
Strike belt outages
The Open cast operation was replanned and rescheduled in January 2007. This
resulted in an increase in stripping ratios that will continue for the
remainder of the financial year. This included production in March of
20,268 tons from the Fingers opencast operation.
Underground production decreased by 22% to 146,564 tons. At No. 4 Shaft
1,051 meters of primary development was completed during the quarter and at
No. 1 Shaft 335 metres of primary development was completed. After the
Christmas break an unanticipated shortage of Rock Drill Operators was
experienced due to a large number not returning from vacation. An
intermediate solution to the labour shortage was to hire labour from labour
hire companies. Industrial action by the Load Haul Dumper drivers
aggravated the situation and ultimately impacted negatively on underground
production volumes. Infill drilling is continuing at No. 4 Shaft in
addition to surface-core drilling to better understand the geological
disturbances.
At No. 2 Shaft, the high wall support and portal civil works were completed.
Development recommenced of the man and material decline shaft towards the
end of the quarter.
At the quarter end the stockpile totalled 183,000 tonnes, comprising 171,000
opencast and 12,000 underground tonnes respectively.
A total of 456,522 tons were processed during the quarter, comprising
161,851 tons of underground and 294,671 tons of opencast material. A
mechanical failure in the tailings thickener at Marikana resulted in a three-
day production stoppage.
On the P&SA2 Project, expansion capital totalled R7.2 million for the
quarter. The total expansion capital expenditure to date is R99 million
(AQPSA share: R49.5 million).
Operating Cash Costs
Cash cost per ROM ton increased by 32% to R395 per ROM ton due to decreased
production volumes. The cash cost per PGM ounce increased by 44% to R5,977
per PGM ounce. The increase is attributed to the increase in the stripping
ratio and associated high development costs. Stripping costs for the third
quarter where high as openpit production was accelerated to compensate for
geological losses suffered at No. 4 Shaft during its development and over-
stripping for the start-up of the Fingers openpit operation. Development
costs which form part of the cash costs per PGM ounce increased by 33% from
the previous quarter to R577 per PGM ounce.
Contractor dispute with Moolman Mining
Moolman Mining was the primary opencast mining contractor employed at the
Marikana Mine from start up in May 2002 until December 2005. In December
2005, AQPSA resiled from the contract with Moolman Mining on discovering
misrepresentations by Moolman which induced the contract. Moolman has been
replaced by MCC as opencast contractor at Marikana.
In April 2006, AQPSA instituted action against Moolman arising from the
misrepresentation. The action includes a damages component. In May 2006,
AQPSA served an application to stay the arbitration in respect of the Rise
and Fall claim pending the determination of the action. In September 2006,
AQPSA received Moolman`s response in the application to stay the arbitration
as well as a plea to the action. Moolmans delivered a conditional
counterclaim, comprising four components in an aggregate amount of ZAR472
million. The AQPSA legal team requested additional documentation from
Moolman Mining to prepare a reply in the application proceedings and a plea
to the conditional counterclaims, which reply was due on 4 December 2006.
The requested documents were however not forthcoming and as a result, the
replying affidavit could only be delivered on 19 March 2007.
Moolman Mining purported to set the application down for hearing in the High
Court during the last week of August 2007 and AQPSA has objected to the set
down as it is irregular. It is not anticipated that the application will be
heard during August 2007 and will be delayed for some time.
Everest Platinum Mine
Safety
The 12-month rolling DIIR deteriorated to 0.58 from 0.52. Regrettably on 20
January 2007 a rock drill operator was fatally injured when he was struck by
an underground load haul dumper. An internal investigation was completed by
AQPSA and a separate investigation performed by the Department of Minerals
and Energy; however, the DME report has not yet been issued. Remedial
actions arising from the internal investigation are in process of
implementation. Four lost-time injuries occurred during the quarter.
Safety initiatives continue to focus on fall-of-ground prevention and
materials handling.
Mining
Underground ore production decreased by 5% to 463,202 tons due to fewer
mining shifts
Opencast operations production decreased to 69,568 tons
Opencast mining extension through the South-West Pit continued
Processing
Plant processed 544,016 tons, a 17% decrease compared to the previous
quarter
Recoveries increased to 78% from 70% in the previous quarter
Production fell 3% to 40,107 PGM ounces
Revenue
Revenue at Everest increased 24% to R416 million for the quarter. The
average PGM basket price for the quarter increased to $1,331 per PGM ounce.
The cash margin for the quarter increased to 66% from 56% in the previous
quarter.
Operations
Opencast and underground mining produced a total 532,870 tons, an 18%
decrease compared to the previous quarter, with the production balance
roughly 87% from underground and 13% from opencast and operations
respectively.
Opencast mining production decreased to 69,568 tons largely comprising high
grade and high cost tons from the deeper areas of the South-West Pit
compared to 164,312 tons in the previous quarter from low-cost low-grade
tons from the North Pit). Production capacity was limited by the small
reserve in the south-west pit and the boulder laden nature of the
overburden. The reduction in opencast production, high boulder volumes and
the high stripping ratios inherent in the south-west pit extension resulted
in an increase in opencast mining unit cost.
Underground on-reef development and the establishment of stoping sections
continued during the quarter. Development was hampered by poor ground
conditions, resulting in a 5% decrease in production from 487,114 tons to
463,202 tons. The decrease is primarily attributable to the Christmas break
resulting in a 10% reduction in mining shifts compared to the previous
quarter. In addition, the performance of the underground mining contractor,
Shaft Sinkers Mining (Pty) Ltd, was below expectation, because of high
personnel absenteeism and poor availability of trackless equipment. Shaft
Sinkers initiated action plans to improve trackless equipment availability
and address absenteeism through the application of disciplinary codes.
The underground head grade was consistent with the previous quarter whilst
underground mining unit costs showed a slight increase due to inflationary
increases.
The plant head grade for the quarter improved to 2.94 g/t from 2.79 g/t in
the previous quarter due to a reduction in low-grade opencast material.
Concentrator throughput was 544,016 tons milled for the period, with 11,246
tons consumed from the stockpile, which fell to 2,497 tons at the end of the
quarter. Both the primary and secondary mills were relined during the
period. Recoveries improved to 78% from 70% due to a reduction in oxidised
opencast material, increased reagent addition and improved process stability
resulting from the implementation of advanced flotation process control
systems. The grade and recovery improvement had a significant positive
impact on the PGM yield. Although the tonnage throughput was 21% less than
the previous quarter, the PGM output was only 3% less at 40,107 PGM ounces.
Operating Cash Costs
Cash costs increased by 15% to R258 per ROM ton milled in line with the
increased ratio of underground tons at higher cost. Although opencast
volumes reduced, the unit cost increased due to increased stripping ratios.
Process plant unit costs increased as a result of the higher reagent
consumption, mill reline costs and the lower throughput. As a consequence of
improved grades and recoveries, cash costs per PGM ounce for the quarter
decreased by 2% to R3,504 per PGM ounce.
Mimosa Investments (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The 12-month rolling average DIIR improved to 0.50 for the quarter from 0.52
in the previous quarter
Mining
Underground production increased 4% to 463,446 tons
The surface stockpile increased to a total 393,280 tons at the end of the
quarter
Processing
Plant milling operations seriously affected by the of the tertiary crusher
breakdown
Concentrator plant recoveries improved to 77.7% from 77.3%
Total mine production increased 4% to 34,760 PGM ounces
Revenue
The average achieved PGM basket price for the quarter increased 1% to $950
per PGM ounce. The average nickel price over the quarter rose by 17% to
$15.21 per pound from $13.03 per pound in the previous quarter. Together
with a contribution from base metals of approximately 36% of gross revenue,
sales revenue for the quarter totalled $47.0 million, an increase of $2.7
million when compared to the previous quarter. The gross cash margin
increased to 72% from 68% in the previous quarter.
Operations
During the quarter mining operations hoisted 463,446 tons compared to
456,740 tons in the previous quarter. Tons milled during the quarter
totalled 378,549 tons, with the balance going to the stockpile, which
totaled 393,280 tons at the quarter end using the reconciliation method.
The average plant head grade was constant at 3.68g/t, compared to 3.67 g/t
in the previous quarter.
Tons processed totalled 378,549, a 4% increase compared to the previous
quarter. The anticipated increase in processing following the plant
shutdowns in the previous quarters was not realised due to a failure of the
tertiary crusher which required extended repairs in South Africa. The
situation is now back to normal, though, despite the odds, recoveries for
the quarter increased by 0.4% in the quarter to 77.7%. and PGM production
during the third quarter increased 4% to 34,760 ounces (Aquarius
attributable: 17,380 ounces).
Operating Cash Costs
Cash costs for the quarter decreased to $396 per PGM ounce, an 11% decrease
compared to the previous quarter`s figure of $446 per PGM ounce.
Net of by-products, however, cash costs were negative at -$154 per PGM
ounce, compared to -$52 per PGM ounce in the previous quarter, primarily due
to the high nickel price.
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%)
Safety
The DIIR is zero. No Lost Time Accidents have occurred since the project
commenced.
Processing
Material processed steady at 44,000 tons
Grade improved by 11% to 4.98 g/t
Recoveries decreased to 28%
Production increased 5% to 1,954 PGM ounces
Revenue
The PGM basket price for the quarter increased 13% to $1,806 per PGM ounce.
Revenue for the quarter increased to R23 million (Aquarius attributable:
R11.5 million). The cash margin remained high at 77%.
Operations
A total 44,000 tons were processed for the quarter producing 1,954 PGM
ounces, an increase of 5% (Aquarius attributable: 977 PGM ounces). This
material had an 11% higher head grade at 4.98g/t than the material processed
in the previous quarter, however, concentrator recoveries were lower at 28%.
The principle reason for the fall in recoveries was that less current
arising (fresh material with a lower head grade and higher recovery) and
more dump material (oxidized material with a higher head grade and lower
recovery) was processed due to the availability of material from the
different sources.
Operating Costs
Cash costs increased by 28% to $2,750 per PGM ounce. The increase was due
to a price participation element in the cost of the feed and major spares
that are purchased on a six monthly interval.
CORPORATE MATTERS
Directorate Changes
On 12 March 2007, Mr Patrick Quirk resigned as a director of the Company to
concentrate on his private business interests. The directors wish to record
their sincere appreciation for the outstanding contribution Mr Quirk has
made to the Company in his capacity as director over the last five years,
and wish him well in his future endeavours.
Aquarius advances purchase of 3.5% of South African subsidiary from SavCon
SavCon have notified Aquarius that the completion of the acquisition of a
3.5% equity interest in AQPSA from SavCon for a cash consideration of ZAR
342.5 million, as first announced in November 2006, may now complete in
April 2007, following receipt of the necessary consent from the South
African Department of Minerals and Energy.
AQPSA Management Changes
In March 2007, Gert Ackerman retired as Managing Director of AQPSA. He
continues to work for the group as a consultant, primarily involved with the
implementation of social, labour and development plans. Mr Anton Wheeler
has in turn been appointed Managing Director of AQPSA. Mr Wheeler joined
Aquarius in April 2006 as Operations Director, responsible for the day-to-
day management of Aquarius Platinum`s South African operations.
Aquarius Platinum Limited
Incorporated in Bermuda
Exempt company number 26290
Board of Directors
Nicholas Sibley Non-executive Chairman
Stuart Murray Chief Executive Officer
David Dix Non-executive
Timothy Freshwater Non-executive
Edward Haslam Non-executive
Sir William Purves Non-executive
Kofi Morna Non-executive
Zwelakhe Mankazana Alternate to Kofi Morna
Audit/Risk Committee
Sir William Purves (Chairman)
David Dix
Edward Haslam
Nicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)
Nicholas Sibley
Nomination Committee
The full Board comprises the Nomination Committee
Company Secretary
Willi Boehm
AQPSA Management
Stuart Murray Executive Chairman
Anton Wheeler Managing Director
Ayanda Khumalo Finance Director
Graham Ferreira General Manager Admin & Company Secretary
Hugo Holl General Manager Everest
Robert Mallinson General Manager Marikana
Gordon Ramsay General Manager Metallurgy
Abraham (Rudi) Rudolph General Manager Kroondal
Gabriel de Wet General Manager Engineering
Mimosa Mine Management
Alex Mhembere Managing Director
Winston Chitando Finance Director
Herbert Mashanyare Technical Director
Peter Chimboza Operations Director
Issued Capital
At 31 March 2007, the Company had on issue:
85,068,716 fully paid common shares and 1,527,162 unlisted options
Trading Information
ISIN number BMG0440M1029
Aquarius Platinum (South Africa) (Proprietary) Ltd.
50.5% Owned
(Incorporated in the Republic of South Africa)
Registration Number 2000/000341/07
Block A, 1st Floor, The Great Wall Group Building
5 Skeen Boulevard, Bedfordview
South Africa 2007
Postal Address P O Box 1282, Bedfordview, 2008, South Africa.
Telephone: +27 (0)11 455 2050
Facsimile: +27 (0)11 455 2095
Aquarius Platinum Corporate Services Pty Ltd
100% Owned
(Incorporated in Australia)
ACN 094 425 555
Level 4, Suite 5, South Shore Centre,
85 The Esplanade, South Perth, WA 6151, Australia
Postal Address PO Box 485, South Perth, WA 6151, Australia.
Telephone: +61 (0)8 9367 5211
Facsimile: +61 (0)8 9367 5233
Email: info@aquariusplatinum.com
Glossary
A$ Australian Dollar
Aquarius Aquarius Platinum Limited
ABET Adult Basic Education Training programme
APS Aquarius Platinum Corporate Services Pty Ltd
AQPSA Aquarius Platinum (South Africa) Pty Ltd
ASACS Aquarius Platinum (SA) (Corporate Services) (Pty)
Limited
CTRP Chromite Ore Tailings Retreatment Operation
DIFR Disabling Injury Incidence 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 South African Government Department of Minerals and
Energy
DMS Dense Media Separation
Dollar or $ United States Dollar
EMPR Environmental Management Programme Report
Everest Everest Platinum Mine
Great Dyke Reef A PGE bearing layer within the Great Dyke Complex in
Zimbabwe
g/t Grams per tonne, measurement unit of grade (1g/t = 1
part per million)
JORC code Australasian code for reporting of Mineral Resources and
Ore Reserves
JSE JSE Securities Exchange South Africa
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
NOSA National Occupational Safety Association
PGE(s) (6E) Platinum Group Elements plus Gold. Five metallic
elements commonly found together which constitute the platinoids (excluding
Os (osmium)). These are Pt (platinum), Pd (palladium), Rh (rhodium), Ru
(ruthenium), Ir (iridium) plus Au (gold)
PGM(s) (4E) Platinum Group Metals plus Gold. Aquarius reports the
PGMs as comprising Pt+Pd+Rh plus Au (gold) with the Pt, Pd and Rh being the
most economic platinoids in the UG2 Reef.
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
RK1 Consortium comprising Aquarius Platinum (SA) (Corporate
Services) (Pty) Limited (ASACS), Ivanhoe Nickel and Platinum Limited and
Sylvania South Africa (Pty) Ltd (SLVSA).
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 Rustenburg Platinum Mines Limited
SavCon The Savannah Consortium. The principal Black Empowerment
Investor in Aquarius Platinum
TKO TKO Investment Holdings Limited
Ton 1 Metric tonne (1,000kg)
UG2 Reef A PGE bearing chromite layer within the Critical Zone of the
Bushveld Complex
Z$ Zimbabwe Dollar
For further information please contact:
In Australia:
Willi Boehm
Aquarius Platinum Corporate Services Pty Ltd
+61 (0)8 9367 5211
In the United Kingdom and South Africa
Nick Bias
BuckBias Limited
+ 44 (0)7887 920 530
or visit: www.aquariusplatinum.com
Date: 26/04/2007 08:30:01 Produced by the JSE SENS Department.
