| Tue 21 Apr 2009, 9:38 | | AQP - Aquarius Platinum - Third Quarter 2009 Financial & Production Results |
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AQP
AQP
AQP - Aquarius Platinum - Third Quarter 2009 Financial & Production Results
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1284
Third Quarter 2009 Financial & Production Results
Aquarius Platinum Limited ("Aquarius") announces its third quarter 2009
Financial & Production Results.
Aquarius regards the publication of its third quarter results as a significant
new factor relating to the information contained in the Placing and Rights
Issue prospectus published by Aquarius on 31 March 2009 ("Placing and Rights
Issue Prospectus") and accordingly, expects to publish a supplementary
prospectus which supplements the disclosure made in the Placing and Rights
Issue Prospectus as soon as possible.
Highlights of the Quarter
- Attributable production 97,212 PGM ounces. A solid performance despite 10
fewer shifts (14%) in South Africa and suspension of operations at Everest
Mine. Excellent operational and safety performance at Mimosa.
- Group cash costs steady quarter on quarter.
- PGM prices improved through quarter, results aided by weaker Rand US
Dollar exchange rate.
- Gross "cash" profit for the quarter $14.2 million.
- Net profit for the quarter was $6.5 million, reversing losses of prior
two quarters.
- Successful capital raising negotiated including a placement of 46.3
million shares raising GBP83.4 million, an underwritten rights issue of
GBP47.7 million in progress and a fully underwritten convertible note issue of
ZAR500 million.
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said "The
calendar quarter to March is traditionally the lowest average quarterly
production for our South African operations because it includes the Christmas
and New Year holiday periods. Factoring in 14% fewer shifts than the previous
quarter, what at first glance appears to be a quarter of lower production and
flat costs actually reveals some good improvements at the operations for the
third quarter in a row both in terms of production and costs due to underlying
improvements in efficiencies.
The quarter is however, singularly characterised by the successful equity
placing that we undertook in March, and the ongoing associated rights issue
and covertible bond processes. It was very encouraging to see such good demand
for the new equity and correspondingly the confidence that shareholders have
placed in Aquarius` future. Funds will be applied with diligence to retiring
exisiting debt, redeveloping the Everest Mine and indeed to new projects once
the acquisition of Ridge completes. I would like to take this opportunity to
thank shareholders, both old and new for their support of our business."
P&SA1 at Kroondal
- PGM production of 104,920 PGM ounces (Aquarius attributable 52,460 PGM
ounces), a modest 4% decrease compared to the previous quarter.
- Effective cash margin was 38%
P&SA2 at Marikana
- PGM production of 38,851 PGM ounces (Aquarius attributable: 19,426 PGM
ounces), an 8% decrease compared to the previous quarter before adjusting for
14% fewer shifts.
- Effective cash margin was 26%
Mimosa
- PGM production up 7% quarter-on-quarter to 46,278 PGM ounces (Aquarius
attributable 23,139 PGM ounces) compared to the previous quarter.
- Cash margin for the quarter reduced to 24% due to increased costs and
negative sales adjustments.
CTRP
- PGM production of 1,587 PGM ounces (Aquarius attributable: 793 PGM
ounces), an 11% decrease compared to the previous quarter
- Effective cash margin increased to 53% compared to -2% in the previous
quarter
Platinum Mile
- PGM production of 2,788 PGM ounces (Aquarius attributable: 1,394 PGM
ounces), a 10% decrease compared to the previous quarter due to commissioning
difficulties with the fine grind mills.
- Effective cash margin of 26%
Metals Prices and Foreign Exchange
Metals price performance for our commodities was less volatile over the
quarter and characterized by an overall upward trend compared to the low
prices experienced in the previous quarter. Platinum closed the quarter back
above the $1,000 mark, up 24% over the quarter to a close of $1,124 per PGM
ounce. Surplus supply experienced in the previous quarter due to poor
autocatalyst demand found new homes in jewellery, in particular in China. In
addition, increased demand in the metal as an investment (including ETFs) as
an alternative to gold has seen a resurgence in demand, noticeably amongst
Japanese retail investors. Palladium closed the quarter up 17% to $215 per
ounce. Rhodium traded less volatile, closing the quarter down 6% at $1,175
per ounce. Gold closed the quarter up 6% at $921 per ounce.
Looking at the 4PGE basket prices for the quarter, the average achieved basket
for operations in South Africa increased 7% to $797 per ounce (equal to R7,992
per ounce) and at Mimosa the achieved basket price reduced by -31% to $626 per
ounce. The average basket price for the group for the quarter reduced 2% to
$756 per PGM ounce, or R7,518 per ounce, dragged lower because of the
reduction in the achieved basket price in Zimbabwe. It should be noted that
the average basket price at the end of quarter, as calculated using market
prices was $848 per ounce, equal to R8,068 per ounce using the quarter end
Rand Dollar exchange rate of 9.52.
Production for Mimosa is priced on the average London morning and afternoon
prices for the calendar month prior to the month in which refined metals are
produced, and consequently the basket price achieved shows a lag of one month
compared to the average calendar prices.
The Rand continued to hold its weaker 9 to 10 band against the US dollar,
closing 2% weaker at an exchange rate of 9.52 to the US Dollar. The average
Rand rate realised at South African operations during the quarter was 9.94 to
the US Dollar.
Financials
Consolidated earnings for the quarter to 31 March 2009 was a net profit of
$6.5 million (US 2 cents per share). Cash profit was $14.2 million for the
quarter. This is a significant improvement from the previous two quarters
which recorded losses of $21.5 million in the September `08 quarter and $48.5
million in the December `08 quarter largely as a result of negative sales
price adjustments. The March quarter also benefited from improving PGM prices.
Importantly, the improved result is in spite of lower production of 30,000 PGM
ounces due to the temporary closure of the Everest mine in December 2008.
For the quarter to 31 March 2009, revenue was $80.5 million, a $43 million
increase in revenue compared to the December `08 quarter. The revenue figure
is inclusive of positive sales adjustments of $11.8 million due to the flow
through of improved PGM prices experienced during the quarter. The $11.8
million positive sales adjustment represents a $68.8 million turn around
compared to the December `08 quarter`s negative sales adjustment of $57.1
million. The stability and recovery in PGM prices has seen an end to the
abnormally high sales adjustments experienced in the December half year.
Table A: Aquarius Attributable Production and Net Profit Summary by Quarter
Quarter Quarter Quarter Quarter
ended ended ended ended
Jun 2008 Sep 2008 Dec 2008 Mar 2008
4PGE Production 109,863 128,366 131,843 97,212
(attributable ounces)
Revenue $217.3m $178.1m $90.0m $66.7m
PGM Sales Adjustments - $27.3m ($71.9m) ($57.1m) $11.8m
Realised & Unrealised
Total Revenue $244.6m $106.2m $32.9m $78.5m
Net Profit/(Loss) After $39.1m ($21.5m) ($48.6m) $6.5m
Tax & Outside Equity
Interests
Reduction in unit costs remains a focus throughout the Group`s operations.
During FY2009 there has been a 30% reduction in unit costs of which 10% was a
reduction of the rand cost base and 20% was due to US dollar strength against
the Rand. At Mimosa, unit costs were slightly up following the dollarisation
of the Zimbabwean economy. It is too early to gauge the impact of the
dollarisation of the Zimbabwean economy on the Mimosa mine operations.
At operations in South Africa, price changes have been experienced in the
following input costs:
Table C: Quarterly Price Cost Changes at AQPSA, Q1 FY2009 Compared to Q4
FY2008
Q3 2009 compared to Q2
2009
Labour 0%
Diesel -29.6%
Chemicals -0.44%
Explosives -10.45%
Steel -7.9%
Electricity* 0%
Looking to the fourth quarter 2009, it is anticipated that reductions in unit
costs will be achieved as production increases further due primarily to
increased shifts, though also due to falling prices for diesel, chemicals and
steel flow through the cost base.
Finance charges for the quarter of $7.9 million included interest payments on
the RMB debt facility of $6.4 million and a non-cash component of $1.5 million
on the unwinding of the rehabilitation provision.
Subsequent to the end of the quarter on 9 April the RMB facility was reduced
to R500 million following the repayment of R1.08 billion of the RMB facility
from proceeds of the placement of shares concluded in early April. It is
envisaged that the remaining RMB facility (R500 million) will be paid out in
the second week of May following conclusion of the issuance of the new
convertible loan details of which can be sourced from the offer circular
available on the Company website.
Depreciation and amortisation was in line with expectation at $7.7 million.
The Aquarius group cash balance at 31 March 2009 totaled $65.0 million. Net
operating cash flow for the quarter comprised $77 million from sales, $67
million paid to suppliers, net finance expenses of $5.5 million and income tax
paid of $2.2 million. Material cash flow items (other than mine operations)
that affected cash balances during the quarter included capital expenditure of
$10.5 million.
Group cash at 31 March 2008 (before proceeds from the placement of 46,330,000
shares) was held as follows:
AQP $35.0 million
AQPSA $16.3 million
ACS(SA) $10.2 million
Mimosa $3.5 million
Total $65.0 million*
Placement of 46,330,000 new common shares
Subsequent to the end of the quarter, gross proceeds of GBP83.4 million were
received following the successful completion of the placing of 46,330,000 new
common shares as announced to the market on 26 March. These proceeds have
been used to retire part of the RMB bridge facility.
Aquarius Platinum Limited
Consolidated Income Statement
Quarter ended 31 March 2009
$`000
Note: Quarter Nine Months Financial
Ended Ended Year Ended
31/03/09* 31/03/09* 30/06/08
Aquarius PGM 97,212 357,421 500,203
Production
(attributable
ounces)
Revenue (i) 78,459 217,638 919,012
Cost of sales (ii) (62,198) (259,519) (359,873)
Gross profit/(loss) 16,261 (41,881) 559,139
Other income 379 565 2,109
Admin & other (2,013) (6,723) (10,467)
operating costs
Other FX movements (iii) (961) (37,260) 14,286
Finance costs (iv) (7,986) (29,576) (28,260)
Impairment losses (121) (12,703) -
Profit/(loss) before 5,559 (127,578) 536,807
tax
Income tax 981 28,144 (173,214)
benefit/(expense)
Profit/(loss) after 6,540 (99,434) 363,593
tax
Minority interest (v) - 35,842 (127,119)
Net profit/(loss) 6,540 (63,592) 236,474
EPS (basic - cents 2.0 (19.44) 91.98
per share)
* Unaudited
Notes on the March 2009 Consolidated Income Statement
(i) Revenue for the quarter is $42 million higher than the Dec 08 quarter
(despite lower production due to the temporary closure of the Everest mine)
following stabilization of PGM prices during the quarter. This has resulted in
positive sales pipeline adjustments of $11.8 million for the quarter, a $68.8
million turn around from the previous quarter.
(ii) Cost of sales per PGM ounce have reduced during the course of FY2009 both
in Rand and dollar terms due to increased efficiencies and dollar strength.
Reflects foreign exchange movements on revaluation of net monetary assets.
(iii) Finance costs include group debt ($6.4 million) and unwinding of
rehabilitation provision ($1.5 million).
(iv) Minority interests no longer apply following conclusion of the final
phase of the BEE flip in October 2008.
Aquarius Platinum Limited
Consolidated Cash flow Statement
Quarter ended 31 March 2009
Quarter Nine Financial
Ended Months Year Ended
Ended
Note: 31/03/09* 31/03/09* 30/06/08
Net operating cash (i) 2,144 (13,736) 339,073
inflow
Net investing cash (ii) (10,476) (34,920) (118,048)
outflow
Net financing cash 14 (30,080) (320,081)
outflow
Net increase in (8,318) (78,736) (99,056)
cash held
Opening cash 86,953 170,956 287,663
balance
Exchange rate (13,582) (27,167) (17,651)
movement on cash
Closing cash 65,053 65,053 170,956
balance
* Unaudited
Notes on the March 2009 Consolidated Cash flow Statement
(i) Net operating cash flow for the March quarter includes $77 million inflow
from sales, $67 million paid to suppliers, net finance expense of $5.5 million
and income tax paid of $2.2 million.
(ii) Reflects development and plant and equipment expenditure of $10.5
million.
Aquarius Platinum Limited
Consolidated Balance Sheet
At 31 March 2009
$`000
Quarter Ended Financial Year
Ended
Note: 31/03/09* 30/06/08
Assets
Cash assets 65,053 170,956
Current receivables (i) 85,583 186,964
Other current assets (ii) 43,319 35,941
Property, plant and (iii) 200,037 221,515
equipment
Mining assets (iv) 248,954 277,428
Goodwill (v) 47,936 58,505
Other non-current (vi) 12,955 15,599
assets
Total assets 703,837 966,908
Liabilities
Current liabilities (vii) 209,613 267,517
Non-current payables (viii) 1,992 2,219
Non-current interest- (ix) 1,761 1,752
bearing liabilities
Other non-current (x) 100,029 150,906
liabilities
Total Liabilities 313,395 422,394
Net assets 390,442 544,514
Equity
Parent entity interest 390,442 508,914
Minority interest - 35,600
Total Equity 390,442 544,514
* Unaudited
Notes on the March 2009 Consolidated Balance Sheet
(i) Reflects debtors receivable on PGM concentrate sales
(ii) Reflects PGM concentrate inventory, reef stockpiles and consumables
stores
(iii) Represents plant and equipment within the Group
(iv) Mining assets reflects Kroondal, Marikana, Mimosa and Everest mining
(mining rights) assets
(v) Platinum Mile Resources acquisition
(vi) Includes recoverable portion of rehabilitation provision from Anglo
Platinum ($11.9 million), investments in unlisted entities ($0.9 million)
(vii) Includes RMB bridge facility $162 million (since reduced on 9th
April to $50 million), creditor and other payables $45 million and tax payable
$2 million.
(viii) Includes rehabilitation obligations on P&SA1 and P&SA2 structures.
(ix) Reflects Investec loan at Platinum Mile Resources.
(x) Reflects deferred tax liabilities $47 million, provision for closure
costs $53 million.
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 100%)
P&SA 1 at Kroondal
Safety
The 12-month rolling average DIIR for the quarter improved to 0.71 from 0.77
in the previous quarter. Twelve lost-time injuries were reported during the
quarter.
Mining
- Production tons decreased by 19% to 1,456,748 tons due to the lower
number of operating shifts during the quarter and higher geological losses
- Consequently, head grade decreased marginally from 2.60 g/t to 2.56 g/t
Processing
- Reduction in mining shifts mitigated by stockpile accumulation
- Tons processed decreased by 3% to 1,623,838 tons
- Recoveries increased at 78.5%
- PGM production decreased by 4% to 104,920 PGM ounces
Revenue
The achieved mine basket price for the quarter averaged $795 per PGM ounce, 7%
higher than the previous quarter. The achieved mine Rand Dollar exchange rate
averaged 9.94 for the quarter. Revenue at Kroondal increased by 183% to R846
million for the quarter (Aquarius attributable: R423 million).
The decrease in production was in part offset by the gains in the basket
price. However, revenue normalised as the impact of negative sales
adjustments decreased due to stability and recovery in PGM prices with
positive sales adjustments realising in March 2009.
Operations
The third quarter, which includes the Christmas and New Year period; has 14%
less mining shifts than the second quarter due to the number of public
holidays and associated shift scheduling. This impacted directly on
underground production with the total square meters mined decreasing by 11%
over the period. However, a higher incidence of geological features such as
potholes during the period resulted in a 30% increase in the off-reef square
meters mined, which directly reduced the resultant tonnage yield. The bulk of
off-reef mining is back-packed to reduce grade dilution and does not reflect
as mine production.
Production was further impacted by suspension of activities at the K5 Shaft
following the fatal accident at the end of the previous quarter. Although the
DME lifted the Section 54 instruction issued to Kroondal operations, Aquarius
management decided to suspend operations at K5 shaft pending further
representation and remedial measures implemented by Redpath, the K5 shaft
underground mining contractor. Operations at the shaft therefore only resumed
in January 2009.
As a result of the above factors, Kroondal mining production decreased by 19%
to 1,456,748 tons for the quarter.
The `Areboleleng` (Tswana for "let`s talk") industrial relations initiative is
ongoing with MRC showing a positive effect on industrial relations, with no
industrial action during the quarter. The initiative will be extended to
Redpath at K5 Shaft, where minor industrial relations incidents did take
place, during the next quarter. Although post-leave returns and absenteeism
following the festive period had some production impact it showed significant
improvement when compared with the previous year.
Stockpile accumulation in preparation for the period alleviated the reduction
in mining production with tons processed decreasing by 3% to 1,623,838 tons.
Stockpiles at the end of the quarter were 7,229 tons. Relines on the primary
and secondary mills were performed at the K2 concentrator.
The head-grade decreased, averaging 2.56 g/t for the quarter. This was due to
the increase in off-reef square meters mined, and the consumption of K5 shaft
stockpiles which had lower grades due to the higher relative contribution of
lower grade development tons.
Recoveries increased to 78.5% due to improvement initiatives in operational
stability and control.
PGM production decreased by 4% to 104,920 PGM ounces (Aquarius attributable:
52,460 ounces) a fair performance given the reduction in operating shifts
during the period. PGM production for the quarter showed a 5% improvement
above the comparable quarter 3 production for the previous year.
Primary development for the quarter was 1,182 metres.
Kroondal: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs Attributable
ended to Aquarius
Mar 2009 62,281 30,728 11,411 500 104,920 52,460
Dec 2008 65,075 32,161 11,941 531 109,707 54,854
Sep 2008 60,634 29,573 11,068 456 101,731 50,866
Jun 2008 49,621 24,054 9,014 372 83,062 41,531
Operating Cash Costs
Cash costs per ton increased by 2% to R323 and costs per PGM ounce increased
by 3% to R4,999 as a result of the lower production units due primarily to the
fewer working shifts during the quarter. Offsetting this, stringent cost
control measures and efficiency improvements mitigated the fixed cost impact
associated with the lower mining production.
Gross revenue increased by 183% to R846 m as a result of the stability and
recovery in PGM prices and the close-out of negative sales adjustment. As a
result, Kroondal Mine shows a positive cash margin for the period of 38%
compared to -78% in the previous quarter
Kroondal: Operating Cash Costs per Ounce
4E 6E 6E net of by-
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) products
(Ni&Cu)
Kroondal R 4,999 R 4,096 R 3,993
Capital Expenditure
Capital expenditure for the quarter was R58 million, all ongoing capital.
Major items included underground mining infrastructure and trackless mobile
mining equipment.
P&SA2 at Marikana
Safety
The 12-month rolling average DIIR for the quarter deteriorated from 0.70 in
the previous quarter to 0.88 Ten lost time injuries were reported during the
quarter. Two incidents resulted in multiple injuries which compounded the
impact on the safety measure.
Regrettably a fatal accident occurred in the open pit mining area on 7 January
2009, when Mr Victor Ndou, a mechanical assistant and employee of open pit
contractor MCC Contracts, was fatally injured when he was struck by a sliver
of metal expelled from a mechanical failure on the undercarriage of an
excavator.
AQPSA has concluded the internal investigation but was issued a Section 54
instruction under the Mine Health and Safety Act, 1996. The instruction
resulted in a 4-day stoppage of open pit operations. The Department of
Minerals and Energy (DME) has yet to complete the enquiry into the accident.
Mining
- Production tons decreased by 24% to 564,851 tons, comprising 302,094 tons
from underground and 262,758 tons from open pit operations
- Head grade decreased by 2% to 2.85 g/t due to higher percentage of
underground material
Processing
- Tons processed decreased by 11% to 602,137 tons
- Recoveries increased by 7% to 70.46%
- PGM production decreased by 8% to 38,851 ounces (Aquarius attributable:
19,426 ounces)
Revenue
The achieved mine basket price for the quarter averaged $799 per PGM ounce, 7%
higher than the previous quarter. The achieved mine Rand Dollar exchange rate
averaged 9.94 for the quarter. Quarterly revenue at Marikana increased by
199% to R323 million (Aquarius attributable: R161 million)
The decrease in production was in part offset by the gains in the basket
price. However, revenue normalised as the impact of negative sales
adjustments decreased due to stability and recovery in PGM prices with
positive sales adjustments realising in March 2009.
Operations
The third quarter, which includes the Christmas and New Year period has 14%
less mining shifts than the second quarter due to the number of public
holidays and associated shift scheduling. This had an impact on underground
production with the total square meters mined decreasing by 9% over the
period. It should be noted, however, that the contribution of underground
production continues to increase and now accounts for 54% of total production
at Marikana.
At the No.1 Shaft, primary development has made good progress showing a 6%
increase on the previous quarter helping to offset geological losses. Re-
establishment of sections will contribute to improved production in the next
quarter. Stoping sections at No. 4 Shaft showed efficiency improvements
during the quarter but reef production was adversely affected by the off-reef
primary development and a Section 54 instruction following a blasting
incident. Consequently, Marikana underground production decreased by 20% to
302,093 tons for the quarter.
Open pit production showed a decline in accordance with the mine plan as Pit A
approached the end of its life towards the end of the quarter, with ongoing
open pit production from the ROM Pit and South-west Pit. The open pit
stripping ratio made good progress, falling from 24:1 to 20:1 in accordance
with the pit optimisation and the Pit A completion. Open pit production was
also impacted by the lower number of shifts in the period and a Section 54
instruction issued following the fatality in the open pit area. Consequently,
the open pit operations showed a quarter-on-quarter decrease of 28% to 262,758
tons.
The `Areboleleng` (Tswana for "let`s talk") industrial relations initiative is
ongoing with MRC showing a positive effect on industrial relations, with no
industrial action during the quarter. Post-leave returns and absenteeism
following the festive period also showed improvement as compared with the
previous year.
Stockpile accumulation in preparation for the period would have alleviated the
reduction in mining production but concentrator availability was adversely
affected by a failure on the ball mill gearbox and motor and a higher
frequency of rod culling on the rod mill as a result of liner wear. Tons
processed therefore decreased by 11% to 602,137 tons, comprising 307,047 tons
from underground and 295,090 tons of open pit material. The rod mill is
scheduled for a reline in the next quarter and improvements in plant
availability are anticipated. Stockpiles at the end of the quarter were
86,035 tons, consisting predominantly of open pit material.
The head-grade decreased marginally by 2% to 2.85 g/t.
Recoveries made strong improvements, to 70.4% from 66% in the previous
quarter, due to the higher relative processing of underground material and the
process control and stability initiatives.
PGM production for the quarter decreased by 8% to 38,851 PGM ounces (Aquarius
attributable: 19,426), a good performance given the lower number of shifts and
indeed, a 38% improvement above the comparable Quarter 3 production for the
previous year.
Marikana: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs Attributable
ended to Aquarius
Mar 2009 23,673 10,908 4,034 236 38,851 19,426
Dec 2008 26,193 11,733 4,256 268 42,451 21,226
Sep 2008 24,182 10,609 3,866 226 38,883 19,442
Jun 2008 17,843 7,649 2,769 155 28,416 14,208
Operating Cash Costs
Cash costs per ton increased by 1% to R395, whilst costs per PGM ounce
decreased by 2% to R6,124 as a result of a higher consumption of underground
material and ongoing improvement initiatives which served to offset the fixed
cost impact of the lower production resulting from the fewer working shifts in
the period.
Gross revenue increased by 199% to R323 m as a result of the improvement in
PGM prices and the associated unwinding of negative sales adjustment. As a
result, Marikana Mine shows a cash margin for the period of 26%.
Marikana: Operating Cash Costs per Ounce
4E 6E 6E net of by-
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+R products
u+Au) (Ni&Cu)
Marikana R 6,124 R 5,012 R 4,831
Capital Expenditure
Ongoing capital expenditure totalled R15.3 million. (AQPSA share R7.65
million). This consisted of primarily of underground infrastructure
establishment.
Contractor dispute with Moolman Mining
During March 2009, AQPSA and Moolman Mining agreed that the dispute relating
to AQPSA resiling from the contract originally concluded between AQPSA and
Moolman Mining on the basis of misrepresentation by Moolman Mining and Moolman
Mining`s conditional counter claims, would be referred to trial and would not
be subject to Arbitration. As a result, the original Arbitration instituted by
Moolman Mining against AQPSA relating to the application of the rise and fall
formula in that contract, will be indefinitely suspended pending the outcome
of the trial proceedings. This agreement was made an order of court with the
consent of both parties and provisional dates in September 2010 have been
allocated for the trial.
Everest Platinum Mine
Mining operations have been temporarily suspended at the Everest mine. On 8
December 2008 the Company announced the temporary suspension of operations at
the Everest mine due to subsidence that resulted in geotechnical instability.
Management assessed the situation in conjunction with the DME and a section 54
notice under the Mine Health and Safety Act was issued prohibiting normal
mining operations but allowing inspection teams to enter the mine and
permitting the care and maintenance activities.
The subsidence has subsequently stabilised and no further subsidence (as
measured on surface) was evident as from the 10 February 2009 with seismic
activity relating to movement in the collapsed area reduced to a state of
equilibrium. Investigation teams have been able to assess the extent of the
affected area, confirming that the subsidence is confined to mined-out area in
the upper, central area of the mine straddling the decline system.
Rock engineering analysis by an independent rock engineering consultant has
confirmed that the geotechnical instability is limited to the subsidence area
and that further propagation of the area is extremely unlikely. The
subsidence has been linked to abnormally high rainfall which preceded the
event, with November and December 2008 being two of the three highest rainfall
months recorded in 105 years of available meteorological data which affected
ground conditions which are specific to the affected area. The investigation
confirms that the stoping and development areas were not affected and that
operations can be resumed through establishment of new access to the
underground workings.
The CSIR Mineral Resources (Council for Scientific and Industry Research),
completed a numerical analysis and rock strength testing of the current
pillars and these results will be used by the Consulting Rock Engineers` to
design a mine layout and regional and support pillars for the unmined areas.
A project team is in process with a technical investigation in assessing
alternatives to re-establish declines into the underground workings and design
a mine plan based on the Rock Engineers` recommendation to safely resume
production. It is anticipated that these studies will be completed during the
next quarter.
The design that is being favoured at this stage and that eliminates the risk
of future geotechnical instability and that will also have the lowest impact
on operating cash flow, is the mining of two boxcuts and the related sets of
declines (one north and one south) from the previous opencast areas. Apart
from creating flexibility, access to the future west reserve and shorter
travelling time for people, this option also includes regional pillars for
sustainable mining.
AQPSA considers that there is sufficient ground for a combination of insurance
claims for subsidence, loss of earnings and clearance and a claim to this
effect has been submitted.
While operations are suspended, the monthly fixed cost of keeping the mine on
care and maintenance is approximately R5 million. This cost comprises a small
team of employees to keep the concentrator plant and underground mine under
care and maintenance, fixed network electricity cost and general expenses such
as insurance and security.
MIMOSA INVESTMENTS (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The 12-month rolling average DIIR for the quarter improved from 0.17 in the
previous quarter to 0.00. No lost time injuries were reported during the
quarter.
Mining
- Underground production decreased by 1% to 539,004 tons
- Head grade slightly decreased 1% to 3.58 g/t
- The surface stockpile decreased to a total 520,660 tons at the end of the
quarter, equivalent to almost three-months mill feed
Processing
- Concentrator plant recoveries decreased to 73.3% from 74%
- Total mine production increased by 7% to 46,278 PGM ounces (Aquarius
share: 23,139 PGM ounces)
Revenue
The average achieved PGM basket price for the quarter decreased by 31% to $626
per PGM ounce. The average achieved nickel price over the quarter decreased
by 34% to $4.75 per pound from $7.15 per pound in the previous quarter.
Revenue for the quarter decreased to $30 million, with base metals accounting
for approximately 23% of revenue. The cash margin decreased to 24% from 56%
in the previous quarter mainly due to falling achieved metal prices.
Operations
During the quarter mining operations hoisted 539,004 tons compared to 546,891
tons in the previous quarter. Tons milled during the quarter totalled 548,320
tons, with 9,316 tons being taken from the stockpile, which totalled 520,660
tons at the quarter end.
The average plant grade marginally de/creased to 3.58 g/t, compared to 3.63
g/t in the previous quarter.
Tons processed totalled 548,320, a 10% increase compared to the previous
quarter, due to deferred Phase 5.5 tie in shutdown. The shutdown is now
planned for in the fourth quarter.
Recoveries for the quarter slightly decreased to 73.3% from 74.2%.
PGM production during the quarter increased by 7% to 46,278 ounces (Aquarius
attributable: 23,139 ounces).
Mimosa: PGMs in concentrate produced (ounces)
Quarter Pt Pd Rh Au PGMs Attributable
ended to Aquarius
Mar 2009 23,590 17,905 1,797 2,986 46,278 23,139
Dec 2008 21,903 16,678 1,753 2,898 43,232 21,616
Sep 2008 22,113 16,863 1,770 2,892 43,638 21,819
Jun 2008 19,532 14,821 1,535 2,628 38,517 19,258
Mimosa: Base Metals in concentrate produced (tons)
Mine Production Attributable to Aquarius
Quarter Ni Cu Co Ni Cu Co
ended
Mar 2009 659 545 18 329.5 272.5 9
Dec 2008 615 497 18 307.5 248.5 9
Sep 2008 602 498 17 301 249 8.5
Jun 2008 533 439 15 266 219 7
Operating Cash Costs
Cash costs per ROM ton increased by 2% to $42, whilst costs per PGM ounce
increased by 6% to $499. The increase in cash costs for the quarter was
attributable to a change in remuneration policy from a Zimbabwean dollar
denominated salary base to a US dollar denominated salary base. The
liberalisation of foreign currency trading, resulted in a change in services
provision tariffs and these are negatively affecting the Mine`s costs base,
notably new power, water, telephone, license and rates tariffs which have now
been dollarised.
The gross cash margin decreased to 24% from 56% in the previous quarter mainly
due to falling achieved mine PGM basket prices. Net of by-products, cash
costs were $326 per PGM ounce, compared to $181 per PGM ounce in the previous
quarter, primarily due to a fall in the prices of base metals.
Mimosa Operating Cash Costs per Ounce
4E 6E 4E net of by-
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) products
(Ni, Cu & Co)
Mimosa $499 $475 $326
Update on Foreign Currency Regime in Zimbabwe
The National Budget and Monetary Policy Statement announced in January 2009
liberalised foreign currency trading in the economy. As a result all companies
including parastatals, are now billing in foreign currency. All taxes are also
payable in foreign currency. No prior exchange control approvals are now
required to trade or remunerate employees in foreign currency. Credit lines
and foreign currency supply in the economy however remains a challenge. There
are currently a lot of pricing distortions in the economy which are beginning
to self-correct.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%)
Safety
The DIIR improved to 0 from 4.80 in the previous quarter. No lost time
accidents were recorded.
Processing
- Material processed increased marginally to 51,000 tons
- Grade decreased 5% to 2.15 g/t
- Recoveries decreased by 8% to 44%
- Production decreased to 1,587 PGM ounces (Aquarius attributable: 793 PGM
ounces)
Revenue
The achieved mine basket price for the quarter averaged 859 per PGM ounce, 5%
higher than the previous quarter. The achieved mine Rand Dollar exchange rate
averaged 9.94 for the quarter.
The decrease in production was in offset by the gains in the basket price and
the reduction in operating cost with quarterly revenue increasing by 14% to
R6.9 million (Aquarius attributable: R3.4 million).
Operations
Material processed increased to 51,000 tons. This is due to repositioning of
the reclamation facilities on the chrome dump source.
The head grade decreased 5% to 2.15g/t as a result of grade variances within
the chromite dump source material.
Recoveries decreased 8% to 44% due to the lower head grade and a breakdown on
the Deswick mill, which resulting in the mill being bypassed. The problem has
been rectified and improved recoveries is expected in the next quarter.
This resulted in production down 9% to 1,587 PGM ounces (Aquarius
attributable: 793 ounces). This decrease in production was due to the lower
feed grade.
CTRP: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs
ended (4E)
Mar 2009 966 351 267 3 1,587
Dec 2008 1,078 404 297 4 1,784
Sep 2008 1,077 388 295 4 1,764
Jun 2008 1,254 452 333 5 2,044
Operating Costs
Cash costs decreased by 39% to R2,043 per PGM ounce, a significant fall due to
cost reductions as well as a reversal of unrealised expense accruals made
during prior periods. The cash margin for the period of was 53%, an increase
from -2% in the previous quarter.
CTRP Operating Cash Costs per Ounce
4E 6E 4E net of by-
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) products
(Ni, Cu& Co)
CTRP R 2,043 R 1,385 R 1,361
Platinum Mile (Aquarius Platinum 50%)
The effective date of the acquisition of the 50% interest in Platinum Mile was
March 1 2008.
Safety
The DIIR was zero for the quarter. No lost time accidents were recorded.
Processing
- Tailings processed remained very constant compared to the previous
quarter at 2,009 million tons
- PGM grade was 0.65 g/t
- Production was 2,788 PGM ounces (Aquarius attributable: 1,394 PGM ounces)
Revenue
The achieved mine basket price for the quarter averaged $810 per PGM ounce,
36% higher than the previous quarter, helping to offset lower production. The
achieved mine Rand Dollar exchange rate averaged 9.92 for the quarter.
Quarterly revenue decreased by 22% to R25 million (Aquarius attributable:
R12.5 million).
Production levels continue to be seriously impacted during the expansion of
fine milling capacity due to ongoing commissioning issues with the two new
ultra-fine grind mills. It is anticipated that the issues will be resolved
during the fourth quarter, paving the way for a ramp up to full annual
production of 35,000 PGMs during the 2010 financial year.
Operations
Total feed for the quarter was 2,009,000 tons, a 3,000 ton increase compared
to the previous quarter.
During the quarter the feed head grade decreased marginally to 0.65 g/t
compared to 0.67 g/t the previous quarter.
Recoveries remained constant at 7% compared to the previous quarter.
As a result, production decreased 10% to 2,788 PGM ounces (Aquarius
attributable: 1,394 ounces).
Target production at Platinum Mile remains 35,000 per annum. It is estimated
that full monthly production rates will be achieved by July 2009.
Platinum Mile: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs
ended (4E)
Mar 2009 1,617 864 251 56 2,788
Dec 2008 1,799 962 279 63 3,103
Sep 2008 3,470 1,855 538 120 5,983
Jun 2008 2,920 1,561 453 101 5,035
Operating Costs
Cash costs increased 3% to R5,519 per PGM ounce.
Platinum Mile Operating Cash Costs per Ounce
4E 6E 4E net of by-
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) products
(Ni, Cu& Co)
Platinum R 5,519 nm nm
Mile
Capital Expenditure
Capital expenditure for the quarter was R15.2 million. The expansion and fine
milling project budget of R59 million remains on target, with the total spent
to date to R55 million, with R4 million remaining in the fourth quarter to
June 2009.
CORPORATE MATTERS
Announcement and completion of equity placing
On 26 March 2009 Aquarius announced the placement of 46,330,000 new common
shares in the Company (the "Placing Shares") were placed by Merrill Lynch
International and Euroz Securities Limited at a price of GBP1.80, or A$3.75
per placing share, raising gross proceeds of approximately GBP83.4 million.
The placing shares issued represent approximately 14.2% of Aquarius` issued
common share capital prior to the placing. Placement funds were received
subsequent to the end of the quarter following the issue and allotment of the
placement shares to placees on 1 April 2008. More information can be found at
www.aquariusplatinum.com.
Launch of Rights Issue
On 27 March 2009, subsequent to the successful equity placing, Aquarius
announced a fully underwritten 1 for 9 rights issue to raise gross proceeds of
approximately GBP47.7 million, through the issue of 41,491,737 new common
shares, representing 10% of the enlarged issued common share capital of
Aquarius, at a price of GBP1.15 pence, A$2.39 or ZAR15.83 per new common
share. More information and a full prospectus can be found at
www.aquariusplatinum.com.
Launch of Placement of up to R650 million secured convertible bonds
On 27 March 2009 following the placing of common shares of Aquarius and the
announcement of a proposed rights issue, Aquarius also announced its intention
to raise up to R650 million by way of a convertible bond issue, of which R500
million will be fully underwritten by Rand Merchant Bank, a division of
FirstRand Bank Limited ("RMB"). More information can be found at
www.aquariusplatinum.com.
Recommended All-Share Offer for Ridge Mining plc
On 27 March 2009 Aquarius Platinum Limited and Ridge Mining plc announced that
they signed an Implementation Agreement for the possible recommended all-share
offer for Ridge by Aquarius. Under the terms of the Implementation Agreement,
and subject only to the satisfaction or waiver of the announced pre-conditions
Aquarius has agreed to make an all share offer for the entire issued and to be
issued share capital of Ridge. More information can be found at
www.aquariusplatinum.com.
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 Non-executive
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
Hugo Holl Managing Director
H?l?ne Nolte Director: Finance
Hulme Scholes Commercial Director
Anton Lubbe Operations Director: West
Anton Wheeler Operations Director: East
Graham Ferreira General Manager: Group Admin & Company Secretary
Mkhululi Duka General Manager: Group Human Resources &
Transformation
Wessel Phumo General Manager: Marikana
Jacques Pretorius General Manager: Everest
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
Fungai Makoni Finance Executive & Company Secretary
Issued Capital
At 31 March 2009, the Company had in issue: 327,095,634 shares fully paid
common shares and 1,680,305 unlisted options. It should be noted that
subsequent to the end of the quarter, on 1 April 2009, there was a placement
of 46,330,000 shares. Consequently, the number of fully paid common shares in
issue following the placement is 373,425,634. The number of fully paid common
shares in issue following the rights issue will be 414,917,371.
Substantial Shareholders 31 Number of Percentage
March 2009 Shares
Savannah Consortium 61,792,856 18.89%
HSBC Custody Nominees 24,395,110 7.46%
(Australia) Limited
Nutraco Nominees Limited 20,569,148 6.29%
Chase Nominees Limited 16,763,933 5.13%
Trading Information
ISIN number BMG0440M1284
ADR ISIN number US03840M2089
Broker (LSE) (Joint)
Merrill Lynch International
2 King Edward St
London, EC1A 1HQ
Telephone: +44 (0)20 7628 1000
Investec Securities Limited
Investec Bank plc
2 Gresham St, London, EC2V 7QP
Telephone: +44 (0)20 7597 5970
Broker (ASX)
Euroz Securities
Level 14, The Quadrant
1 William Street, Perth WA 6000
Telephone: +61 (0)8 9488 1400
Sponsor (JSE)
Investec Bank Limited
100 Grayston Drive
Sandown, Sandton 2196
Telephone: +27 (0)11 286 7326
Aquarius Platinum (South Africa) (Proprietary) Ltd
100% Owned (At 31 March 2009)
(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
For further information please visit aquariusplatinum.com or contact:
In Australia
Willi Boehm
+61 (0)8 9367 5211
In the United Kingdom and South Africa
Nick Bias
+ 41 (0)79 888 1642
nickbias@aquariusplatinum.com
21 April 2009
xGlossary
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)
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
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
Ridge Ridge Mining plc
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
Date: 21/04/2009 09:38:02 Produced by the JSE SENS Department.
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