| Thu 7 Aug 2008, 8:37 | | AQP - Aquarius Platinum Limited - Full Year Results: 30 June 2008 |
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AQP
AQP
AQP - Aquarius Platinum Limited - Full Year Results: 30 June 2008
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1284
Full Year Results: 30 June 2008
Comparative data for earning per share and dividends paid for the 2007
financial year are adjusted for the 3-for-1 share split approved by
shareholders on 23 November 2007.
Highlights
- Group production at 500,203 PGM ounces
- Record net profit, up 26% to $236 million (US 92.0 cents per share)
- Net profit of $267 million before an attributable once-off tax payment of
$31 million, which represented part consideration of the repurchase of
Implats AQPSA shareholding
- Net mine operating cash flow up 29% to $505 million
- Full year dividend up 43% to US 20 cents per share
Operational
- Group attributable production at 500,203 PGM ounces (2007: 530,276 PGM
ounces)
- Record basket prices at all operations
- Increase in underground production at all operations
- Improved margins at Kroondal and Everest, despite industrial relations and
electrical supply issues
- Shift to mine operator at Everest, and new proactive labour structures and
bonus systems implemented at Kroondal, Marikana and Everest
- Operational management bolstered with new appointments
Financial
- Revenue increased 30% to $919 million
- Net mine operating cash flow up 29% to $505 million from $391 million
- Group cash balances at $171 million
- US10 cents per share final dividend declared, payable on 3rd October 2008
(2007: US10 cents)
Total 2008 dividend (interim and final) up 43% to US20 cents (2007: US14
cents)
Strategic
- Repurchase of Implats stakes in AQP and AQPSA increasing AQP`s interest to
67.5% from 54% and raising BEE ownership in AQPSA to 32.5%
- Acquisition of a 50% interest in Platinum Mile tailings project
- Three-for-one share-split
- Mimosa Wedza Phase V expansion completed
Commenting on the full year results, Stuart Murray, CEO of Aquarius Platinum
said, "We have increased our operating profits by 43% to $267 million before a
once-off tax charge of $31 million and increased our gross margin to 61%; a
performance that, along with the performance of our peers in the platinum
mining sector, surely stands the sector apart from the rest of the market.
This performance has occurred in a climate of unprecedented cost pressures and
difficult industrial relations issues at our South African mines. Further, we
have increased the dividend by 43% to US 20 cents and including the repurchase
of shares in the subsidiary and parent, delivered an equivalent adjusted
earnings of US 104 cents per share. Despite a challenging year, I believe
that Aquarius is on a strong footing to recover from the production set-backs
of 2008 and pick up again with the march for value driven growth in the new
financial year. Further, I believe that opportunities in the platinum sector
have never been more interesting, even if the operating remains challenging."
Aquarius announces consolidated earnings for the year to 30 June 2008 of $236
million, equal to US92.0 cents per share. This represents a 26% increase in
net profit over the previous year. The increase is attributed to higher
commodity prices offset by a 6% reduction in attributable production to
500,203 PGM ounces and a once-off charge against earnings of $31 million paid
as Aquarius` portion of a Secondary Tax on Companies charge on the repurchase
of Implats shares in Aquarius` subsidiary, AQPSA. In the 2008 financial year,
the group average 4E PGM basket price (platinum, palladium, rhodium and gold)
rose to US$1,762 per ounce compared to US$1,293 in the previous year.
Mine operations delivered net operating cash flow of $505 million for the
year, compared to $391 million in the previous year due to higher commodity
prices. The increased cash flow allowed the Group to acquire an interest in
the Platinum Mile Tailings Project; repay inter-group shareholder loans; and
fund mine development and rehabilitation at the Group`s mines. In April 2008,
the group also ascribed $210 million of cash funds with $370 million of equity
and $200 million new debt towards the total $780 million repurchase
consideration of Implats` 21,425,898 shares in Aquarius Platinum Limited
(approximately 8.4% of the outstanding share capital at the time), and the
repurchase by AQPSA of Implats` 20% stake in AQPSA. This increased Aquarius`
interest in AQPSA from 54% to 67.5% and raised BEE ownership to 32.5%
resulting in an increased share of earnings from AQPSA for AQP.
The Directors have declared a final dividend of US10 cents (2007: US10 cents)
per share payable on 3rd October 2008 to shareholders registered on 12th
September 2008. This brings the total dividend payable for the year ended 30
June 2008 to US20 cents (2007: US 14 cents), an increase of 43% over the
previous year.
Net Profit & Production Comparison by Half Year & Full Year (FY 2008 & 2008)
1H 2H FY FY200 FY
2008 2008 2008 7 Change
Net profit after tax $106M $130M $236M $187M +26%
attributable to AQP
Net profit before once- $106M $161M $267M $187M +43%
off STC tax payment
PGM Production (4E) 277,1 222,3 500,2 530,7 (6%)
(ounces) 83 90 03 26
Revenues from ordinary activities for the year rose 30% to $919 million
(comprising sales revenue of $891 million and interest and other income of $28
million) from $709 million (sales revenue $690 million and interest and other
income of $19 million). The increased revenue was due to a 36% increase in
the average PGM basket price over the year.
As outlined in the table above, this year`s production was stronger in the
first half, as the Group`s expansion program was interrupted by industrial
action and electrical supply issues in the second half, notably at the Everest
Mine where the company moved from contractor mining to mine-operator. The
Group`s existing operations are expected to continue to increase production
and deliver an approximate 15% increase in production in FY2009.
On mine cash costs at $310 million reflects an increase in average group
attributable unit costs to R4,553 per PGM ounce or $622 per PGM ounce compared
to $493 per PGM ounce in the previous year.
Cash Costs at Operations
Rand (4E) per Rand (6E) per Rand (6E) per
ounce ounce ounce less by-
product
Kroondal 4,241 3,487 3,334
(P&SA1)
Marikana 7,575 6,273 6,025
(P&SA2)
Everest 4,126 3,352 3,159
Mimosa (US$) 446 423 -49
CTRP 2,666 1,742 1,651
Platinum Mile 7,890 7,890 7,890
Group Average 4,553 3,691 3,116
(R)
Group Average 622 510 431
($)*
*Group average calculated using attributable production
Amortisation and depreciation was higher compared to FY2007 at $49 million
from $39.5 million, largely a consequence of the change to mine operator
mining at Everest.
Interest income was 47% higher at $28.1 million, due to higher cash balances
in the group prior to the Implats buyback in May. Interest expense was $28.3
million, including a non-cash component of $8.6 million relating to the
unwinding of the interest in the net present value of mine site rehabilitation
provisions and $8.8 million on AQPSA`s debt facilities. Interest expense
includes interest paid on pipeline finance advanced from the smelters.
Group Financials by Operation
Kroon Marik Evere Mimos CTRP Plat Corp Total
dal ana st a Mile
PGM ounces 195,5 62,79 157,9 75,41 4,924 3,520 500,2
(attributable) 58 1 94 6 03
Revenue (net of 347.4 112.4 295.5 125.7 11.1 6.6 20.3 919.0
FX sales
variance)
On mine cash (113. (65.0 (89.2 (35.1 (3.9) (3.8) (310.
costs 3) ) ) ) 3)
Amortisation and (10.2 (10.9 (16.7 (3.4) (0.3) (0.8) (42.3
depreciation ) ) ) )
Gross profit 223.9 36.5 189.6 87.2 6.9 2.0 20.3 566.4
Amortisation of (5.6) (0.4) - (0.5) - - (6.5)
fair value
Gross profit 218.3 36.1 189.6 86.7 6.9 2.0 20.3 559.9
after FVU
Other income - - - (0.1) 1.1 0.1 1.0 2.1
Corporate admin - - - - - - (11.2 (11.2
and other costs ) )
Foreign currency 15.4 5.4 5.2 (11.2 (1.0) - 0.5 14.3)
gain/(loss) )
Finance charges - - - - - (28.3 (28.3
) )
Profit/(loss) 233.7 41.5 194.8 75.4 7.0 2.1 (17.7 536.8
before tax )
Tax Expense (173.
2)
Profit/(loss) 363.6
after tax
Minority interest (127.
1)
Profit/(loss) 236.5
after minority
interest
Cash Balances
Aquarius` operating mines generated net cash flows of $505 million during the
year. Together with a capital raising completed in April 2008 for $370
million through the placement of 23,144,000 shares and a drawdown of $200
million from a new debt facility, Aquarius was able to fund its activities for
the year. Major items greater than $50 million (other than mine operations)
that impacted on cash flow included
($ million) FY2008
Equity raising $370
Debt facilities raised $200
Implats share buyback ($734)
STC charge ($46)
Shareholder loan ($55)
repayments
Income tax paid ($130)
Dividends paid ($60)
Capital expenditure ($76)
Group cash reserves at year end totalled $171 million and were held in the
following entities:
($ million) 30 June 2008
AQP $30.5
ACS(SA) (100%) $5.2
AQPSA (100%) $92.8
Mimosa Investments (50%) $42.5
Total $171.0
Group Debt
Group interest bearing debt (excluding pipeline advances) for the year at $200
million comprised the following:
- AQPSA debt facilities $200 million
Rand US Dollar Exchange Rate
The Rand weakened against the US Dollar year-on-year from 7.02 to 7.84;
however, there was considerable volatility in the rate during the year, with a
range between 6.50 and 8.15.
Financial Year 2008: Rand US Dollar Exchange Rate
Platinum Group Metal Prices ($ per ounce)
PGM prices in US Dollar terms continued to perform well during the
year.Platinum, palladium, rhodium and gold all moved higher during the
year.Platinum closed the year 62% higher at $2,064 per ounce, palladium 28%
higher at $467 per ounce, rhodium up 57% to $9,725 per ounce and even gold
adding 44% to close at $934 per ounce.
Financial Year 2008: Platinum, Palladium, Rhodium and Gold Prices ($ per
ounce)
The South African and Zimbabwean PGM basket prices consequently saw
significant increases, averaging 39% higher for the year at US$1,890 per 4PGE
ounce in South Africa and at US$1,358 per ounce in Zimbabwe. The group
average basket price for the year was $1,762 per 4PGE ounce.
Production
The chart below illustrates the annual production profile. Production
decreased in 2008 primarily due to industrial relations and electrical issues
in the second half at South African operations; and a marginal fall at Mimosa
due to electrical supply, plant and equipment breakdowns, marginally offset by
small production increases at CTRP together with the addition of ounces from
the acquisition of 50% of the Platinum Mile project.
Production of PGMs attributable to shareholders of Aquarius was 500,203 PGM
ounces. The tables below compare production by operation and attributable to
Aquarius over the four quarters and year-on-year.
Production by Mine
PGMs Quarter Ended Full Year Ended
Quarter Quarter Quarter Quarter FY 2007 FY 2008
1 2 3 4
Kroondal 106,493 101,542 100,020 83,062 439,351 391,117
Marikana 35,200 37,744 24,223 28,416 132,376 125,583
Everest 48,841 46,719 31,107 31,327 163,938 157,994
Mimosa 38,660 39,372 34,283 38,517 154,448 150,832
CTRP 2,681 2,816 2,309 2,044 7,408 9,850
Platinum - - 2,006 5,035 - 7,041
Mile
Total 231,875 228,193 193,948 188,401 897,521 842,417
Production by Mine Attributable to Aquarius
PGMs Quarter Ended Full Year Ended
Quarter Quarter Quarter Quarter FY 2007 FY 2008
1 2 3 4
Kroondal 53,246 50,771 50,010 41,531 219,674 195,558
Marikana 17,600 18,872 12,111 14,208 66,187 62,791
Everest 48,841 46,719 31,107 31,327 163,938 157,994
Mimosa 19,330 19,686 17,142 19,258 77,224 75,416
CTRP 1,340 1,408 1,154 1,022 3,703 4,924
Platinum - - 1,003 2,517 - 3,520
Mile
Total 140,357 137,456 112,527 109,863 530,726 500,203
FINANCIALS
Aquarius Platinum Limited
Consolidated Income Statement
Year ended 30 June 2008
$`000
Note Half year ended Year ended
30/06/0 31/12/0 30/6/08 30/6/07
8 7
Aquarius PGM 222,390 277,813 500,203 530,726
Production
(attributable
ounces)
Revenue (i) 495,355 423,657 919,012 709,183
Cost of Sales (ii) (184,21 (175,66 (359,87 (300,83
1) 2) 3) 3)
Gross Profit 311,144 247,995 559,139 408,370
Other income 1,644 465 2,109 2,586
Corporate Admin & (iii) (6,775) (3,692) (10,467 (8,972)
other costs )
Foreign exchange (iv) 22,354 (8,068) 14,286 (2,308)
gains/(losses)
Finance costs (v) (19,352 (8,908) (28,260 (15,218
) ) )
Profit before tax 309,015 227,792 536,807 384,458
Income tax expense (vi) (114,03 (59,178 (173,21 (90,861
6) ) 4) )
Profit after tax 194,979 168,614 363,593 293,597
Minority interest (vii) (65,151 (61,968 (127,11 (106,37
) ) 9) 4)
Net profit 129,829 106,646 236,474 187,223
EPS (basic - cents) (viii) 50.40 41.58 91.98 72.84*
*Adjusted for three for one share split approved by shareholders on 23
November 2007
Notes on the June 2008 Consolidated Income Statement
(i) Sales revenue increase reflects higher PGM basket price achieved
(ii) Increase in cost of sales reflects impact of inflation and on mine
cash cost increases
(iii) Corporate admin costs are higher due to increased activity including
the transaction costs of $3 for the repurchase of shares in Aquarius
and AQPSA
(iv) Increase in finance costs reflects increased pipeline finance on
higher metal prices, interest on the new debt in place to part fund the
Implats share buy-back
(v) Includes the net effect of a $28 million gain on adjusting revenue
recorded at time of production at Kroondal, Marikana and CTRP to actual
receipts received at the end of the four month pipeline and $11 million
loss incurred by Mimosa on the revaluation of net monetary assets
including the impact of the depreciating Zimbabwean Dollar
(vi) Income tax expense for the period for AQPSA and Mimosa including a
"one off" $46 million ($31 million attributable to Aquarius) Secondary
Tax on Companies charge on the Implats share buyback
(vii) Minority interests reflect 46% outside equity interest of the Savannah
Consortium (SavCon) and Impala Platinum Holdings Limited (Implats) in
AQPSA reducing to 32.5% outside equity interest at the end of April
2008 on completion of the repurchase of Implats shares in AQPSA
(viii) Earnings per share is calculated on the post share split (3:1) as
approved by shareholders in November 2007
Aquarius Platinum Limited
Consolidated Cash flow Statement
Year ended 30 June 2008
$`000
Half year Financial year
ended ended
Note 30/06/ 31/12/ 30/06/ 30/06/
: 08 07 08 07
Net operating cash (i) 133,92 205,15 339,07 323,24
inflow 1 2 3 0
Net investing cash (ii) (85,05 (32,99 (118,0 (93,69
outflow 2) 6) 48) 0)
Net financing cash (iii (224,7 (95,29 (320,0 (106,5
outflow ) 84) 7) 81) 44)
Net increase (175,9 76,859 (99,05 123,00
(decrease) in cash 15) 6) 6
held
Opening cash balance 368,68 287,66 287,66 162,42
2 3 3 5
Exchange rate (iv) (21,81 4,160 (17,65 2,232
movement on cash 1) 1)
Closing cash balance 170,95 368,68 170,95 287,66
6 2 6 3
Notes on the June 2008 Consolidated Cash flow Statement
(i) Net operating cash flow includes inflow from operations ($505 million),
tax paid ($130 million and once-off $46 million Secondary Tax on Companies
charge) and net interest income of $9 million
(ii) Net investing cash flow includes payments for mine development and
development costs ($59 million), cash portion of the purchase consideration
for a 50% interest in Platinum Mile Resources ($23 million), and redeemable
deposits ($32 million).
(iii) Net financing cash flow includes net impact of the buyback of Implats
shares in AQP & AQPSA: being payment to Implats $733 million, capital
raising by AQP of net $362 million and a drawdown of $200 million by AQPSA
from the new RMB debt facility, repayment of shareholder loans at AQPSA
level ($55 million), payment of dividends ($60 million), net reduction in
group debt $18 million., AQPSA capital return - minority shareholders
portion $15 million
(iv)Exchange rate movement reflects movement of Rand against the US Dollar
Aquarius Platinum Limited
Consolidated Balance Sheet
At 30 June 2008
$`000
Financial year
ended
Not 30/06/08 30/06/07
e:
Assets
Cash assets 170,956 287,663
Current receivables (i) 186,964 100,577
Other current assets (ii 35,941 26,123
)
Property, plant and (ii 221,515 219,113
equipment i)
Mining assets (iv 277,428 299,672
)
Other non-current (v) 15,599 12,026
assets
Goodwill (vi 58,505 -
)
Total assets 966,908 945,174
Liabilities
Current liabilities (vi 267,517 54,725
i)
Non-current payables (vi 2,219 54,228
ii)
Non-current interest- (ix 1,752 31,272
bearing liabilities )
Other non-current (x) 150,906 172,404
liabilities
Total Liabilities 422,394 312,629
Net assets 544,514 632,545
Equity
Parent entity 508,914 456,138
interest
Minority interest 35,600 176,407
Total Equity 544,514 632,545
Notes on the June 2008 Consolidated Balance Sheet
(i)Reflects debtors receivable on PGM concentrate sales
(ii) Reflects PGM concentrate inventory
(iii) Represents fixed assets within the Group
(iv) Reflects group`s mining assets at Kroondal, Marikana, Mimosa, and
Everest
(v) Includes recoverable portion of rehabilitation provision from P&SA
($11 million), other financial assets ($4.4 million)
(vi) Reflects goodwill paid on acquisition of 50% equity interest in
Platinum Mile Resources (Pty) Ltd.
(vii) Increase from pcp Includes debt facility of $200 million, trade and
other creditors ($66 million)
(viii) Reflects P&SA Partners right of recovery of rehabilitation provisions.
Decrease in non-current payables from pcp reflects repayment of
shareholder loans since June 2007 of $54 million
(ix) Includes interest bearing debt ($1.2 million), other borrowings
$0.5million
(x) Reflects deferred tax liabilities $92 million, provision for closure
costs $59 million
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 67.5%)
P&SA1 at Kroondal
Safety
The 12-month rolling average DIIR for the year improved to 0.48 from 0.75 in
the previous year.
Production
Underground production increased 1% year-on-year to 6,207,000 tons and open-
pit production decreased in line with plan by 67% to 165,000 tons, resulting
in a total 4% decrease in tons to 6,371,000 tons. The average head grade over
the year was lower at 2.61 g/t, primarily due to the contribution of lower
grade ore associated with the development of the new K5 decline. Recoveries
were flat at 77%. Total PGM production for the year decreased 11% to 391,117
PGM ounces (Aquarius attributable: 195,558 ounces).
Kroondal: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
Aquarius
2008 234,041 113,400 41,852 1,823 391,117 195,558
2007 263,930 127,048 46,097 2,275 439,350 219,675
2006 262,263 128,318 46,663 2,201 439,444 219,722
2005 194,290 93,984 34,916 1,540 324,730 162,365*
2004 143,408 68,223 24,913 1,081 237,625 160,190**
*Reflects full impact of P&SA (12 months production at 50%)
**Reflects P&SA effective November 2003 (4 months production at 100% & 8
months production at 50%)
Revenue
The average PGM basket price for the year increased 36% to $1,887 per PGM
ounce. The basket price rose steadily during the year, averaging $2,350 per
PGM ounce in the final quarter. This compensated for a reduction in
production and resulted in a 31% increase in mine revenue to R5.2 billion for
the year (Aquarius share: R2.6 billion). The cash margin for the year rose to
68% from 66%.
Operating Costs
Cash cost per ROM ton increased by 28% to R273 per ton. Consequently, cash
costs per PGM ounce, impacted by lower grades and fewer ounces, increased 38%
to R4,241.
P&SA1 at Kroondal: Operating Costs
Rand 4E per Rand 6E per Rand 6E per
ounce ounce(Pt+Pd+Rh+Ir+Ru+Au) ouncenet of by-
(Pt+Pd+Rh+Au) products (Ni&Cu)
FY 4,241 3,487 3,334
2008
P&SA2 at Marikana Platinum Mine
Safety
The 12-month rolling average DIIR for the year deteriorated to 0.54 from 0.36
in the previous year.
Production
Underground operations continued to ramp-up during the year with production
increasing 54% more tons to 1,096,000 tons. In line with plan, open pit
tonnages were reduced, with production at 976,000 tons. The ratio of
production over the year continued to shift favourably towards underground
material which represented approximately 53% of the total production mix. The
average head grade reduced to 2.89 g/t compared to 3.19 g/t in the previous
year, primarily due to the processing of lower grade stockpile material in the
final quarter. Recoveries were flat at 63%. Despite the increased
contribution of higher recovery underground material during the year, the
overall mix was offset by the processing in the final quarter of the lower-
grade lower-recovery stockpile material. Total PGM production fell 5% year-on-
year to 125,583 PGM ounces (Aquarius attributable: 62,791 PGM ounces).
Marikana: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
Aquarius
2008 78,786 33,916 12,073 808 125,583 62,791
2007 80,903 37,719 12,750 1,003 132,375 66,187
2006 52,757 24,461 8,023 671 85,912 56,617*
2005 63,868 26,413 8,061 819 99,161 99,161
2004 57,774 22,598 6,062 742 87,176 87,176
*Reflects impact of P&SA (effective September 2006)
Revenue
The average PGM basket price for the year increased 36% to $1,822 per PGM
ounce. Over the year, however, the PGM basket rose steadily, averaging $2,311
per PGM ounce in the final quarter. This resulted in a 34% increase in mine
revenue to R1.6 billion for the year (Aquarius share: R819 million). The cash
margin for the year fell to 42%, compared to 44% in 2007.
Operating Costs
Cash cost per ROM ton increased by 31% to R446 due to higher mining costs and
lost production days due to industrial relations issues. Consequently, cash
costs per PGM ounce, impacted by lower grades and recoveries, increased 45% to
R7,575.
Marikana: Operating Costs
Rand (4E) per Rand (6E) per Rand (6E) per
ounce ounce(Pt+Pd+Rh+Ir+Ru+Au) ouncenet of by-
(Pt+Pd+Rh+Au) products
(Ni&Cu)
FY 2008 7,575 6,273 6,025
Everest Platinum Mine
Safety
The 12-month rolling average DIIR for the year deteriorated to 0.89 from 0.62
in the previous year.
Production
Underground production increased 6% to 1,906,000 tons for the year, compared
to 1,805,000 tons in the previous year. Open pit operations, in-line with
plan, reduced production, to 216,000 tons for the year compared to 589,000
tons in the previous year. Total production was, therefore, 2,122,000 tons,
an 11% decrease compared to the previous year. The average head grade
increased marginally for the year to 2.98 g/t from 2.89 g/t due to the
increased contribution from underground operations in the overall production
mix. Recoveries increased by 5% to 78% due to higher quality underground tons
dominating the feed. It is expected that recoveries will increase to 79% in
the 2009 financial year as underground production becomes the only feed
material for processing. Total PGM production fell 4% to 157,995 PGM ounces
(100% attributable to Aquarius) due to the contractor departure and move to
mine operator.
Everest: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
Aquarius
2008 94,428 46,034 16,255 1,278 157,995 157,995
2007 94,398 52,527 15,534 1,478 163,937 163,937
2006 56,118 32,108 7,821 984 97,031 97,031
Revenue
The average PGM basket price for the financial year was up 40% to $1,805 per
PGM ounce. Despite lower production, this resulted in a 47% increase in mine
revenue to R2.2 billion (Aquarius share: 100%). The cash margin for the year
increased to 70% from 62% in the previous year.
Operating Costs
Cash costs per ROM ton increased 33% to R308 per ton as a result of the
increased ratio of higher cost underground tons and lower production due to
industrial relations issues and the shift to owner-operator mining. Cash
costs per PGM ounce increased 22% to R4,126 per PGM ounce, with the increase
in ROM ton cash costs partially offset by increased recoveries.
Everest: Operating Costs
Rand (4E) per Rand (6E) per Rand (6E) per
ounce ounce(Pt+Pd+Rh+Ir+Ru+Au) ouncenet of by-
(Pt+Pd+Rh+Au) products (Ni&Cu)
FY 4,126 3,352 3,159
2008
MIMOSA INVESTMENTS (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The DIIR for the year improved to 0.18 from 0.41 in the previous year.
Production
Underground operations delivered a 2% increase in production to 1,887,000 PGM
ounces. Tons processed increased 2% to 1,732,000 tons, with the balance going
to the stockpile which totalled 498,000 tons at the end of the financial year,
equal to 99-days mill feed. The average head grade increased 2% to 3.57 g/t.
Recoveries decreased marginally to 76%. PGM production for the year decreased
2% to 150,832 ounces (Aquarius attributable: 75,416 ounces) due to mill
breakdowns in November 2007 and June 2008.
Mimosa: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
Aquarius
2008 75,565 77,771 5,996 10,148 150,832 75,416
2007 78,240 59,517 6,067 10,613 154,448 77,224
2006 72,232 54,722 5,577 9,876 142,407 71,204
2005 66,742 49,259 5,156 9,010 130,167 65,084
2004 61,422 44,697 5,036 8,234 119,389 59,697
Revenue
The average PGM basket price for the year was 29% higher at $1,258 per PGM
ounce. Despite lower production, this resulted in a 19% increase in mine
revenue to US$237 million (Aquarius share: 50%). The cash margin for the year
was steady at 73%.
Operating Costs
Cash costs per ounce for the year increased 17% to $446 per PGM ounce due to
the impact of the hyper-inflationary environment. After by-product credits
cash costs were higher, though remained negative at -$63 per PGM ounce. This
reduction was due to the weaker nickel and copper prices throughout the year.
Mimosa: Operating Costs
US$ (4E) per US$ (6E) per US$ (6E) per
ounce ounce(Pt+Pd+Rh+Ir+Ru+Au) ouncenet of by-
(Pt+Pd+Rh+Au) products (Ni&Cu)
FY 446 423 -49
2008
Wedza Phase 5 Expansion
The Wedza Phase 5 Expansion Project was commissioned during the year.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD (Aquarius Platinum 50%)
Chromite Tailings Retreatment Plant (CTRP)
Safety
The Plant recorded a DIIR of 5.62 for the year, following the first injury
since operations began.
Production
Tons processed increased by 51% to 274,000 tons. The average head grade was
steady at 4.2 g/t for the year compared to 4.32 g/t in the previous year.
Recoveries fell by 4% to 27% during the year. Total PGM production, however,
recorded a strong 33% increase to 9,849 PGM ounces.
CTRP: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
to Aquarius
2008 6,114 2,201 1,513 22 9,849 4,924
2007 4,512 1,629 1,252 15 7,408 3,704
2006 3,799 1,378 1,044 13 6,234 3,119
2005 1,321 439 353 4 2,117 1,059
Revenue
The average PGM basket price for the year was 31% higher at $2,224 per PGM
ounce. Reflecting increased production and basket prices, revenue more than
doubled to R155 million (Aquarius attributable R77.5 million). The cash
margin for the year increased to 83% from 77%.
CTRP: Operating Costs
Cash costs per ounce for the year increased 12% to R2,666 per PGM ounce.
CTRP: Operating Costs
Rand 4E per ounce Rand 6E per Rand 6E per
(Pt+Pd+Rh+Au) ounce(Pt+Pd+Rh+Ir+Ru+Au) ouncenet of by-
products (Ni&Cu)
FY 2,666 1,742 1,651
2008
Platinum Mile (Aquarius Platinum 50%)
The effective date of the acquisition of the 50% interest in Platinum Mile was
1 March 2008. Comments below concern the four month period from 1 March to 30
June 2008. Period on period comparisons are therefore not available.
Safety
The DIIR was zero for the quarter. No lost time accidents were recorded.
Production
For the four months, March to June 2008, the operation processed 3,153,000
tons. The average head grade for the period was 0.73 g/t.. Recoveries for
the period were 10%. Total PGM production, for the period was 7,042 PGM
ounces (Aquarius attributable: 3,520 ounces)
Platinum Mile: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
Aquarius
2008 6,114 2,201 1,513 22 7,042 3,520
Revenue
The average PGM basket price for the period was $2,068 per PGM ounce. Revenue
for the period was R101 million (Aquarius attributable R50.5 million). Due to
the lower grades and recoveries than the CTRP, the cash margin for the period
was 46%.
Platinum Mile: Operating Costs
The average cash cost per ounce for the period was R7,890 per PGM ounce.
CTRP: Operating Costs
Rand 4E per ounce Rand 6E per Rand 6E per ounce
(Pt+Pd+Rh+Au) ounce(Pt+Pd+Rh+Ir+Ru+Au) net of by-
products (Ni&Cu)
FY 7,890 Nm Nm
2008
CORPORATE
General Meeting
Subsequent to the period under review, on 16 July 2008, shareholders ratified
both Resolution 1, the ratification of issue of 23,144,000 (per Implats
repurchase) shares and Resolution 2, the ratification of issue of 2,680,854
(per Platinum Mile shares).
Purchase of Stakes of Impala Platinum in both Aquarius Platinum Limited and
Aquarius Platinum South Africa
On 28 April 2008, Aquarius announced the completion of the repurchase of the
21,425,898 common shares (approximately 8.4% of Aquarius` issued share
capital) previously held by Implats for GBP6.71 ($13.34) per share,
representing a total consideration of GBP143.8 million ($285 million). These
shares have now been cancelled. In addition, AQPSA repurchased Implats` 20%
stake in AQPSA for a total consideration of $504.9 million; comprising a cash
payment of $459.0 million to Implats and a Secondary Tax on Companies ("STC")
charge of $45.9 million, as required under South African tax legislation.
The transaction was funded through a combination of an accelerated book build,
cash and debt. The completed bookbuild resulted in the issuance of 23,144,000
new common shares of $0.05 each in Aquarius Platinum, at a price of GBP8.00
pence per placing share, raising gross proceeds of approximately $366 million
(GBP185 million). The balance of the transaction was funded through cash and
debt.
Acquisition of 50% Interest in Platinum Mile Resources (Pty) Ltd
On 4 June 2008, Aquarius Platinum announced that it had completed the
acquisition of a 50% interest in Platinum Mile Resources (Pty) Ltd, from a
consortium of private investors and Mvelaphanda Holdings (Pty) Ltd.
Platinum Mile operates a tailings re-treatment facility which is located in
Rustenburg, North West Province. It is situated within RPM`s Lease Area,
adjacent to Kroondal. The plant processes certain RPM mine tailings. The
concentrates produced by Platinum Mile are combined and sold to RPM and RPM
enjoys a profit share arrangement with Platinum Mile. The Platinum Mile plant
currently produces approximately 20,000 ounces of PGM (4E) per annum and
production ramp-up plans and technological innovations should see the
production from the operation increase to above 35,000 ounces of PGM (4E) per
annum. It is the strategic intent of the parties to grow the business and the
parties will explore current in-house opportunities as well the acquisition of
similar operations within the industry.
The consideration payable to the shareholders of Platinum Mile for 50% of the
issued share capital amounted to R420 million: comprising R210 million in cash
and R210 million in Aquarius Platinum shares issued on the South African
register, at a fixed price of R78.33 (
January 2008 VWAP).
AQPSA and ACS(SA) Appointments
Aquarius is pleased to announce three appointments at AQPSA and one at ASACS.
Mr Hulme Scholes, an attorney specialising in mineral rights legislation has
returned to work for AQPSA on a full time basis from the South Africa law firm
Werksmans. Mr Scholes will continue to hold his seat at the AQPSA Board,
though as an Executive Director.
Ms Helene Nolte was appointed at AQPSA Finance Director on 1 July 2008. Ms
Nolte commenced her career at KPMG where she spent over 9 years, mostly
servicing mining industry clients, her last position being that of Senior
Audit Manager. She has been involved with AQPSA since 1999 in an audit
capacity and from 2004 in a consulting capacity.
Mr Mkhululi Duka has been appointed to the new position as Group Human
Resources & Transformation Manager. Mr Duka joins from Petro SA where he was
the Group HR Manager. His primary focus areas will include human resource
development, policies and procedures, Social and Labour Plans, local economic
development, recruitment and performance management.
In addition, Mr Paul Smith has been appointed to the new position of Director
New Business at Aquarius Platinum (SA) Corporate Services (Pty) Ltd (ACS(SA))
where he will be responsible for a wide remit including strategy and new
business development opportunities. Paul has abundant experience in mining
and finance, notably at ABSA, African Merchant Bank and BoE-NatWest.
More information on all the corporate matters can be found at
www.aquariusplatinum.com
Statistical 100% of Kroondal Marikana Everest
Information Operati P&SA1 P&SA2
ons
Unit 12 12 12 12 12 12
mths mths mths mths mths mths
Jun Jun Jun Jun Jun Jun
08 07 08 07 08 07
Safety
DIIR Rate/20 0.49 0.75 0.54 0.36 0.89 0.62
0,000
man hrs
Revenue
Gross R m in 5,24 4,01 1,63 1,22 2,15 1,46
revenue SA / $m 8 6 8 4 3 8
in Zim
PGM basket $/oz 1,88 1,38 1,82 1,34 1,80 1,28
Price 7 6 2 4 5 6
Gross cash % 68 66 42 44 70 62
margin
Nickel $/lb 12.7 17.2 12.7 17.2 12.9 17.2
Price 1 0 1 0 3 0
Copper $/lb 3.50 3.21 3.50 3.21 3.53 3.21
Price
Ave R/$ 7.23 7.18 7.23 7.18 7.23 7.18
rate
Cash Costs on-mine
Per ROM ton R/ton 271 213 446 341 308 232
$/ton 38 30 62 47 43 32
Per PGM R/oz 4,24 3,06 7,57 5,21 4,12 3,37
(3E+Au) 1 9 5 9 6 3
$/oz 587 427 1,04 727 571 470
8
Per PGE R/oz 3,48 2,52 6,27 4,31 3,35 2,82
(5E+Au) 7 6 3 7 2 1
$/oz 482 352 868 601 464 393
Current/Sus R`000s 347, 250, 99,2 128, 80,9 107,
taining 308 074 13 048 27 489
100%
$`000s 48,0 34,8 13,7 17,8 11,1 14,9
45 21 25 30 32 67
Expansion R`000s - - 10,9 72,8 - 25,4
100% 65 55 41
$`000s - - 1,51 10,1 - 3,54
7 44 2
Underground ROM ton 6,20 6,12 1,09 708 1,91 1,80
`000s 7 9 6 2 2
Open Pit ROM ton 165 495 976 1,40 202 585
`000s 9
Total ROM ton 6,37 6,62 2,07 2,11 2,11 2,38
`000s 1 4 2 8 4 7
Plant Head g/t PGM 2.61 2.81 2.89 3.19 2.98 2.89
Recoveries % 77 77 64 64 78 74
Platinum Ozs 234, 263, 78,7 80,9 94,4 94,3
031 930 86 03 28 98
Palladium Ozs 113, 127, 33,9 37,7 46,0 52,5
400 048 16 19 34 27
Rhodium Ozs 41,8 46,0 12,0 12,7 16,2 15,5
52 97 73 50 55 34
Gold Ozs 1,82 2,27 808 1,00 1,27 1,47
3 5 3 8 8
Total PGM Ozs 391, 439, 125, 132, 157, 163,
(3E+Au) 117 350 583 375 995 937
Total PGE Ozs 16,2 533, 151, 160, 194, 196,
(5E+Au) 70 859 636 048 476 030
Nickel Tons 386 436 193 220 195 224
Copper Tons 178 190 105 119 95 111
Chromite Tons 343 353 95 140 - -
(000) `000s
Statistical 100% of Mimosa CTRP Platinum Mile
Information Operati
ons
Unit 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths
Jun 08 Jun 07 Jun 08 Jun 07 Jun 08 Jun 07
Safety
DIIR Rate/20 0.18 0.41 5.62 0 0
0,000
man hrs
Revenue
Gross R m in 236.0 199 155 77 101 -
revenue SA / $m
in Zim
PGM basket $/oz 1,258 974 2,224 1,704 2,068
Price
Gross cash % 73 74 83 77 46 -
margin
Nickel $/lb 14.35 14.52 12.71 17.20 9.46 -
Price
Copper $/lb 3.46 3.22 3.50 3.21 3.47 -
Price
Ave R/$ - - 7.23 7.18 7.80 -
rate
Cash Costs
on-mine
Per ROM ton R/ton - - 96 97 18 -
$/ton 39 35 13 13 2 -
Per PGM R/oz - - 2,666 2,377 7,890
(3E+Au)
$/oz 446 383 369 331 1,012 -
Per PGE R/oz - - 1,742 1,587 nm -
(5E+Au)
$/oz 423 362 241 221 nm -
Capex
Current/Sus R`000s - - 5,617 - 221 -
taining
100%
$`000s 11,723 8,293 777 - 28 -
Expansion R`000s - - - - 4,568 -
100%
$`000s 20,802 5,665 - - 259 -
Mining
Processed
Underground ROM ton 1,732 1,692 - - - -
`000s
Open Pit ROM ton - - - - - -
`000s
Total ROM ton 1,732 1,692 274 182 3,153 -
`000s
Grade
Plant Head g/t PGM 3.57 3.66 4.20 4.32 0.73 -
Recoveries % 76 78 27 31 10 -
PGM
Production
Platinum Ozs 76,565 77,771 6,114 4,512 4,047 -
Palladium Ozs 58,154 59,216 2,201 1,629 2,197 -
Rhodium Ozs 5,966 6,030 1,513 1,252 661 -
Gold Ozs 10,148 10,553 22 15 135 -
Total PGM Ozs 150,832 153,570 9,849 7,408 7,040 -
(3E+Au)
Total PGE Ozs 158,948 162,386 15,068 11,101 8,192 -
(5E+Au)
Base Metals
Production
Nickel Tons 2,086 2,078 12 12 29 -
Copper Tons 1,719 1,732 9 10 12 -
Chromite Tons - - - -
(000) `000s
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
Helene Nolte Director: Finance
Hulme Scholes Director: Legal
Willie Byleveld General Manager: Technical Services
Graham Ferreira General Manager: Group Admin & Company Secretary
Hugo Holl General Manager: Projects
Mkhululi Duka Group Human Resources & Transformation Manager
Wessel Phumo General Manager: Marikana
Jacques Pretorius General Manager: Everest
Gordon Ramsay General Manager: Metallurgy
Rudi Rudolph General Manager: Kroondal
Gabriel de Wet General Manager: Engineering
ACS(SA) Management
Paul Smith Director: New Business
Mimosa Mine Management
Winston Chitando Managing Director
Herbert Mashanyare Technical Director
Peter Chimboza Operations Director
Issued Capital
At 30 June 2008, the Company had in issue:
262,052,778 fully paid common shares and 1,680,305 unlisted options
Substantial Shareholders 30 June Number of Percentage
2008 Shares
Nutraco Nominees Limited 16,624,749 6.34%
JP Morgan Nominees Australia 12,543,507 4.79%
Limited
Trading Information
ISIN number BMG0440M1284
ADR ISIN number US03840M2089
Broker (LSE) Broker (ASX) Sponsor (JSE)
(Joint)
Morgan Stanley & Co Euroz Securities Investec Bank
International Level 14, The Limited
Limited Quadrant 100 Grayston Drive
20 Cabot Square, 1 William Street Sandown
Canary Wharf Perth WA 6000 Sandton 2196
London, E14 4QW Telephone: +61 (0)8 Telephone: +27
Telephone: +44 9488 1400 (0)11 286 7326
(0)20 7425 8000 Facsimile: +61 (0)8 Facsimile: +27
Facsimile: +44 9488 1478 (0)11 291 1066
(0)20 7425 8990
Investec Securities
Limited
Investec Bank (UK)
Limited
2 Gresham Street
London, EC2V 7QP
Telephone: +44
(0)20 7597 5970
Facsimile: +44
(0)20 75975120
Aquarius Platinum (South Africa) (Proprietary) Ltd
67.5% 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
ACS(SA) Aquarius Platinum (SA) (Corporate Services) (Pty) Limited
BEE Black Economic Empowerment
CTRP Chromite Ore 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 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 Affairs
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)
Implats Impala Platinum Holdings Limited
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
MRC Murray & Roberts Cementation
nm Not measured
NOSA National Occupational Safety Association
NUM South African National Union of Mineworkers
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 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
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:
Anne Cully
+61 (0)8 9367 5211
In the United Kingdom and South Africa
Nick Bias
+ 44 (0)7887 920 530
nickbias@aquariusplatinum.com
7 August 2008
Sponsor: Investec Bank Limited
For diagrams and graphs, please refer to company`s website.
Date: 07/08/2008 08:37:01 Produced by the JSE SENS Department.
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