| Wed 31 Mar 2010, 14:38 | | ANO - Anooraq - Announces Results for the Period Ended December 31 2009 |
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ARQ
ARQ
ANO - Anooraq - Announces Results for the Period Ended December 31, 2009
Anooraq Resources Corporation
Incorporated in British Columbia, Canada
Registration number 10022-2033
TSXV/JSE share code: ARQ
AMEX share code: ANO
ISIN: CA03633E1088
("Anooraq" or the "company")
ANOORAQ ANNOUNCES RESULTS FOR THE PERIOD ENDED DECEMBER 31, 2009
BOKONI ACHIEVES CASH OPERATING PROFIT, SIX MONTHS AFTER ANOORAQ ASSUMES
MANAGEMENT CONTROL
Anooraq announces its production and financial results for the three months
ended December 31, 2009. This release should be read with the Company`s
Financial Statements and Management Discussion & Analysis, available at
www.anooraqresources.com and filed on www.sedar.com
HIGHLIGHTS FOR THE QUARTER:
- Bokoni Platinum Mines ("Bokoni") labour restructuring agreements
completed
- Bokoni concentrator plant upgraded on time and within budget
- Production remained steady at 30,512 Platinum Group Metal ("PGM") (4E:
platinum, palladium, rhodium and gold) ounces
- Operating costs decrease:
- Unit operating cost (in South African rand ("ZAR") per tonne)
decreased by 8%
- ZAR per ounce operating cost decreased by 10%
- PGM (4E) recoveries improved by 5%
- Cash operating profit achieved
- One million fatality-free shifts achieved
The final quarter of the 2009 financial year saw production remain steady at
Bokoni as operating costs, margins and metal recoveries improved. These
results reflect the Company`s first half-year of operational control at
Bokoni and cement its position as a significant PGM growth opportunity.
Philip Kotze, President and Chief Executive Officer of Anooraq Resources,
commented:
"The fourth quarter results continue to reflect the good work achieved at the
operations in the previous quarter and place the Company in a positive
position after our first half-year of operational control at Bokoni. We are
beginning to see the benefits of the operational turnaround strategy
employed, as our operating costs continue to decrease and, for the first
time, we report an operating profit for the quarter."
"Our focus on labour restructuring reached a significant milestone in the
fourth quarter, as all of the restructuring agreements were completed in
December 2009. As we move into 2010, the physical movement of labour from
services to production will commence. Although this will be disruptive for
our first quarter 2010 production, we believe it will position our company
well for future production growth."
"A vital component of the Bokoni turnaround will be our ability to further
reduce operating costs at the mine and I am pleased by our progress made on
this front. We have reduced our ZAR/PGM ounce and US$/PGM ounce costs by a
further 10% and 6% respectively over this quarter, as we continue to move
Bokoni down the industry cost curve. The shallow depth at which the Bokoni
orebody lies and the excellent infrastructure we have in place to access the
Merensky and UG2 reefs provides us with an advantage in achieving our cost
reduction targets. The concentrator plant upgrade at Bokoni was also
completed during the quarter and leaves us well placed to maximise output in
2010."
"The turnaround at Bokoni has been mirrored by the recovery in the global PGM
markets, and we look forward to being a growth producer in an upward-trending
commodities market moving into 2010 and beyond."
REVIEW OF OPERATIONAL AND FINANCIAL PERFORMANCE
The results for the quarter ended December 31, 2009 reflect the performance
at Bokoni for the first full half-year under Anooraq management.
SAFETY
Bokoni achieved one million fatality-free shifts during the quarter, an
achievement for which employees, unions and operating management are
congratulated. However, a rise in the lost time injury frequency rate to 1.04
(per 200,000 hours worked) during this period is cause for concern and active
engagement has begun with all parties - employees, unions and the Department
of Mineral Resources - to improve safety at Bokoni.
PRODUCTION
Mill throughput at 248,999 tonnes during the period was 2% lower than the
previous quarter, mainly as a result of the downtime required to complete the
concentrator plant upgrade to a design capacity of 160,000 tonnes per month.
A PGM (4E) head grade of 4.39 grams per tonne was achieved for the quarter,
an increase of 5%, a consequence of the disciplined mining approach and new
ore flow processes introduced. Grade control remains a key focus area for the
Company and extensive training programmes have been implemented to ensure
`best cut` mining practices are followed by in stope workers.
Production remained steady for PGMs, while base metal recoveries increased
significantly.
Metal produced Q3 2009 Q4 2009 Variance (%)
Platinum (oz) 16,668 16,132 (3%)
Palladium (oz) 11,249 11,498 2%
Rhodium (oz) 1,877 1,816 (3%)
Gold (oz) 1,040 1,065 2%
Nickel (t) 214 241 13%
Copper (t) 126 143 13%
The increase in base metal recoveries reflects the shift in mining from UG2
to Merensky as part of the production profile strategy to increase total
output to approximately 270,000 PGM ounces by 2013. This shift is
particularly evident at the new Brakfontein shaft.
Total development for the quarter was 3,178 metres, an increase of 4% on the
previous quarter and largely as a result of in-stope mining flexibility
receiving greater emphasis. On-reef development was 1,104 metres and
immediately available ore reserves remained constant at 14 months.
COSTS
Continued efforts to reduce mining costs have been successful. Total
operating costs decreased by 10% to CAN$32.7 million when compared to the
third quarter, largely attributable to the initial effects of the labour
restructuring programme and a 21% decrease in spend on central services and
sundries at Bokoni. The 8% reduction in operating unit costs to CAN$130
(ZAR924)/tonne and the significant decrease in PGM (4E) unit costs for the
quarter to US$1,006 (ZAR7,537) per PGM (4E) ounce reflect the success of the
cost-reduction initiatives employed over the first six months of operational
control at Bokoni. The Company will continue to drive down on mine operating
costs and the medium term unit cost target guidelines to 2011 remain in
place.
The labour restructuring agreements were completed in December 2009, with a
total of 374 employees being shifted from services to production and 153
retrenchments confirmed by January 2010. This programme will continue into
the first quarter of 2010 and has been completed by the end of March 2010.
Once the labour restructuring has been implemented, Bokoni will be well
positioned to ramp up production volume from April 2010 onwards.
Power tariff increases in South Africa have been confirmed by the National
Energy Regulator of South Africa for the coming three years as follows: 24.8%
in 2010/2011, 25.1% in 2011/2012 and 25.9% in 2012/2013. Anooraq anticipates
that these increases will lead to a 5% to 8% (seasonally adjusted) rise in
operating costs at Bokoni over the next three years. Continued focus on power
usage reduction aligned with the shallow mining depths at Bokoni will assist
in minimising the impact of these increases.
REVENUE
Metal prices through the quarter reflected the recoveries witnessed in global
commodity markets with the gross US$ PGM (4E) basket price rising 17% to
US$1,055 per ounce and, despite the strengthening South African currency, the
ZAR PGM (4E) basket price rose 13% to R7,899 per ounce. The average exchange
rate for the period was ZAR7.49:US$1.00 (Q3: ZAR7.78:US$1.00), representing a
4% strengthening quarter on quarter.
Revenues from precious metals were CAN$30.7 million for the quarter. Base
metal revenues (Nickel and Copper) contributed CAN$4.1 million, bringing
total metal revenues for the quarter to CAN$34.8 million.
CAPITAL EXPENDITURE
Capital expenditure for the quarter was CAN$14.4 million, consisting of 18%
sustaining capital and 82% project capital. As per the previous quarter, the
major project capital expenditures for the period relate directly to the
Brakfontein mine build-up. The infrastructure upgrade at Vertical Shaft
continues and plans to improve the infrastructure at Middelpunt Hill to
sustain the UG2 mining operations are also underway. The Company`s guidance
on capital expenditure to 2012 remains as previously announced.
PROFITABILITY
Bokoni achieved a cash operating profit for the quarter of CAN$2.1 million, a
131% improvement on the previous quarter and indicative of the success of the
cost-saving initiatives implemented over the past six months. The operating
margin continued to improve to 6.1% for the quarter. Anooraq`s loss after tax
for the quarter decreased by 1% to CAN$18.5 million.
The basic and diluted loss per share improved by 25% quarter on quarter to
CAN$0.03 cents per share for the quarter (3Q: CAN$0.04 cents per share).
CASH AND FACILITIES
The Company held cash on hand at the end of the period of CAN$30.9 million
(ZAR217.9 million) and has access to medium-term debt facilities of
approximately CAN$83.9 million (ZAR592 million) in order to finance its share
of the three-year high growth plan at Bokoni. Anooraq has access to a
CAN$106.4 million (ZAR750 million) operating cashflow shortfall facility
("OCSF") from Anglo Platinum Limited, to fund its 51% pro rata share of any
operating expenditure and capital expenditure shortfall funding required at
Bokoni. The draw down on the OCSF for the quarter was CAN$10.4 million (ZAR74
million), a 34% decrease on the previous quarter as the mine moved into a
cash-generative position. The Company has no need for further funding in the
short to medium term.
RESULTS PRESENTATION: AUDIOLINK AND WEBCAST DETAILS
Philip Kotze, President & CEO of Anooraq, will host a presentation to discuss
the company`s operational and financial results for the quarter ended
December 31, 2009 at 10:00 Eastern Standard Time ("EST") (16:00 Central
African Time ("CAT")) on Wednesday, March 31, 2010. The dial-in details for
the audiolink are listed below. A webcast of the call will be available on
the Company`s website at www.anooraqresources.com. A playback will be
available for three days after the call. The presentation to be used during
the call will be available for downloading from the Company`s website at
www.anooraqresources.com at 09:00 EST (15:00 CAT) on Wednesday, March 31,
2010.
CONFERENCE CALL
Johannesburg, South Africa 16:00 (local Toll 011 535 3600
time)
Toll-free 0800 200 648
London, United Kingdom 15:00 (local Toll-free 0800 917 7042
time)
New York, United States 10:00 (local Toll 1 412 858 4600
time)
Toll-free 1 800 860 2442
Toronto, Canada 10:00 (local Toll-free 1 866 605 3852
time)
PLAYBACK FACILITY
South Africa & Other Code 2159# Toll +27 11 305 2030
United Kingdom Code 2159# Toll-free 0808 234 6771
United States & Canada Code 2159# Toll +1 412 317 0088
For and on behalf of the Board:
Philip Kotze De Wet Schutte
President and CEO Acting Chief Financial Officer
For further information on Anooraq and its South African properties, please
visit our website www.anooraqresources.com or call investor services in South
Africa at +27 11 883 0831 or in North America at 1 800 667 2114.
Anooraq Resources Corporation
Philip Kotze
President and CEO
Office: +27 11 779 6800
Mobile: +27 83 453 0544
Joel Kesler
Executive: Corporate and Business Development
Office: +27 11 779 6800
Mobile: +27 82 454 5556
Russell and Associates
Nicola Taylor
Office: +27 11 880 3924
Mobile: +27 82 927 8957
Macquarie First South Advisers
Melanie de Nysschen / Thembeka Mgoduso
Office: +27 11 583 2000
Mobile: +27 82 465 8969 / +27 83 295 1204
Johannesburg
31 March 2010
Sponsor
Macquarie First South Advisers (Pty) Limited
The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release. The American Stock Exchange has neither approved
nor disapproved the contents of this press release.
Cautionary and Forward Looking Information
This document contains "forward-looking statements" that were based on
Anooraq`s expectations, estimates and projections as of the dates as of which
those statements were made. Generally, these forward-looking statements can
be identified by the use of forward-looking terminology such as "outlook",
"anticipate", "project", "target", "believe", "estimate", "expect", "intend",
"should" and similar expressions.
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause the Company`s actual results,
level of activity, performance or achievements to be materially different
from those expressed or implied by such forward-looking statements. These
include but are not limited to:
- uncertainties and costs related to the Company`s exploration and
development activities, such as those associated with determining
whether mineral resources or reserves exist on a property;
- uncertainties related to feasibility studies that provide estimates of
expected or anticipated costs, expenditures and economic returns from a
mining project; uncertainties related to expected production rates,
timing of production and the cash and total costs of production and
milling;
- uncertainties related to the ability to obtain necessary licenses,
permits, electricity, surface rights and title for development projects;
- operating and technical difficulties in connection with mining
development activities;
- uncertainties related to the accuracy of our mineral reserve and mineral
resource estimates and our estimates of future production and future
cash and total costs of production, and the geotechnical or
hydrogeological nature of ore deposits, and diminishing quantities or
grades of mineral reserves;
- uncertainties related to unexpected judicial or regulatory proceedings;
- changes in, and the effects of, the laws, regulations and government
policies affecting our mining operations, particularly laws, regulations
and policies relating to
- mine expansions, environmental protection and associated compliance
costs arising from exploration, mine development, mine operations
and mine closures;
- expected effective future tax rates in jurisdictions in which our
operations are located;
- the protection of the health and safety of mine workers; and
mineral rights ownership in countries where our mineral deposits
are located, including the effect of the Mineral and Petroleum
Resources Development Act (South Africa);
- changes in general economic conditions, the financial markets and in the
demand and market price for gold, copper and other minerals and
commodities, such as diesel fuel, coal, petroleum coke, steel, concrete,
electricity and other forms of energy, mining equipment, and
fluctuations in exchange rates, particularly with respect to the value
of the U.S. dollar, Canadian dollar and South African rand;
- unusual or unexpected formation, cave-ins, flooding, pressures, and
precious metals losses (and the risk of inadequate insurance or
inability to obtain insurance to cover these risks);
- changes in accounting policies and methods we use to report our
financial condition, including uncertainties associated with critical
accounting assumptions and estimates;
- environmental issues and liabilities associated with mining including
processing and stock piling ore;
- geopolitical uncertainty and political and economic instability in
countries which we operate; and
- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which we operate
mines, or environmental hazards, industrial accidents or other events or
occurrences, including third party interference that interrupt the
production of minerals in our mines.
For further information on Anooraq, investors should review the Company`s
annual Form 20-F filing with the United States Securities and Exchange
Commission www.sec.com and home jurisdiction filings that are available at
www.sedar.com
Date: 31/03/2010 14:38:01 Produced by the JSE SENS Department.
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