| Thu 29 Apr 2010, 10:19 | | AQP - Aquarius Platinum Limited - Third quarter 2010 - financial and |
|
AQP
AQP
AQP - Aquarius Platinum Limited - Third quarter 2010 - financial and
production results to 31 March 2010
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1284
THIRD QUARTER 2010 - FINANCIAL AND PRODUCTION RESULTS TO 31 MARCH 2010
Highlights
- Net profit for the quarter was $23.2 million, up 257% from $6.5 million
in the same quarter last year
- Mine EBITDA increased by 110% to $46 million
- Attributable production flat compared to Q3 2009 - increased if Blue
Ridge included
- Average PGM Dollar prices improved - platinum up 12%, rhodium up 17% and
palladium up 27%
- Everest Mine restart on schedule and within budget - mining commenced
with reef already being stockpiled ahead of concentrator start up
- New tailings dams secured as feed material for CTRP
- Blue Ridge Mine workforce moved to MRC managed contract model as used at
Kroondal and Marikana, ramp-up continues
Q3 Operating Results Summary
Kroon Marikana Everest Blue Mimosa CTRP Platinum
dal Ridge Mile
4E PGM
Production
Total (100% 103,0 35,147 - 15,339 49,008 1,268 2,737
basis) 71
Attributable 51,53 17,574 - 7,669 24,504 634 1,369
6
4E Basket
Price
R/oz 9,987 - 9,867 n/a 10,94 9,810
9,984 5
$/oz 1,328 1,328 - 1,313 1,074 1,456 1,308
Cash Costs
(4E basis)
R/oz 5,905 7,142 - 8,302 n/a 4,478 8,236
$/oz 785 950 - 1,105 663 596 1,098
Cash Margin 38% 27% - 15% 49% 55% 32%
Stay-in-
Business
Capex
R/oz 416 607 - n/a n/a - 486
$/oz 55 81 - n/a 100 - 65
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said:
"The third quarter of the 2010 financial year was characterised by improving
markets, rising Dollar PGM prices and a relatively stable Rand, which together
contributed to improving cash margins at our operations. Production levels
were down on the previous quarter, as is typical for most companies with
mining operations in South Africa in the first calendar quarter of the year.
The traditional effect of the Christmas and New Year holiday period resulted
in fewer shifts in the quarter under review at all operations, and the
commensurately lower production was exacerbated to some degree by teething
problems at Blue Ridge and reduced availability of feed material at our
tailings retreatment operations. Both of these issues are being resolved.
The continuing slow recovery in the developed world automotive industry is
expected to continue, underpinning PGM prices in the final quarter of the
financial year, a period which is likely to see operational and production
metrics in line with the second quarter."
Production by mine
PGMs (4E) Quarter ended
Jun 2009 Sep 2009 Dec 2009 March
2010
Kroondal 105,720 88,808 108,254 103,071
Marikana 37,753 31,223 37,160 35,147
Mimosa 46,874 50,828 50,079 49,008
CTRP 1,689 1,740 2,087 1,268
Platinum Mile 4,479 5,932 8,539 2,737
Blue Ridge - 14,469 18,598 15,338
Total 196,515 193,001 224,717 206,586
Production by mine attributable to Aquarius
PGMs (4E) Quarter ended
Jun 2009 Sep 2009 Dec 2009 March
2010
Kroondal 52,860 44,404 54,127 51,536
Marikana 18,877 15,611 18,580 17,574
Mimosa 23,437 25,414 25,039 24,504
CTRP 845 870 1,044 634
Platinum Mile 2,240 2,966 4,270 1,369
Blue Ridge - 7,235 9,299 7,669
Total 98,259 96,500 112,359 103,286
Aquarius Group attributable production (PGM ounces) - 12 months to 31 March
2010
(Please refer to www.aquariusplatinum.com for the graph)
Metals prices
The US Dollar prices for platinum and palladium strengthened materially in
January 2010 in response to investor interest in the new Exchange Traded Funds
(ETFs) physically backed by those metals which were listed in early January in
the US and Switzerland. ETF volumes rose sharply during the first part of the
quarter, helping to drive prices, before levelling off for the remainder of
the period.
Towards the end of the quarter investment demand was replaced to some degree
by increasing fundamental demand from industry. Auto companies have begun re-
stocking in response to slowly improving consumer sentiment in the US, EU and
Japan and increased demand for imported luxury vehicles in China. This has
driven the prices of not only platinum and palladium, but also notably that of
rhodium, a key indicator of auto manufacturing activity.
Platinum jewellery demand from China remained robust in the face of increasing
US Dollar prices, with platinum volumes on the Shanghai Gold Exchange
increasing in March following a seasonally weaker February and Chinese New
Year. PGM prices continue to reflect improving fundamental market demand, with
prices rising across all PGM metals during the third quarter and into April
2010.
Palladium and rhodium recorded the largest average price increases, at 27% and
17% respectively. Platinum also performed strongly, rising 12%. The average
platinum price for the quarter was $1,561 per ounce, reaching a high of $1,645
on the last day of the period. Palladium averaged $441 per ounce for the
quarter and also ended the period on a high of $479. Rhodium rose to a
quarterly average of $2,565 per ounce, finishing the quarter at $2,600.
PGM prices by individual metal - 12 months to 31 March 2010
(Please refer to www.aquariusplatinum.com for the graph)
Rand-Dollar exchange rate
There was little material movement in the Rand-Dollar exchange rate during the
third quarter. The Rand remained strong, weakening only briefly during
February before firming against the weak US Dollar once again. The Rand
averaged R7.52 to the US Dollar during the quarter, a depreciation of 1%
compared to the average in the prior period. The Rand ended the quarter under
review at R7.34 to the US Dollar, broadly the same level as that in December.
PGM basket prices strengthened at all operations in both currencies. The US
Dollar weighted average group basket price increased by 16% to $1,267 per 4E
PGM ounce compared to the previous quarter, while the weighted average basket
price at the South African operations was $1,327 per PGM ounce. The South
African basket price is equivalent to R9,981 per PGM ounce at the average
exchange rate for the period, a 16% increase over the second quarter.
Rand-Dollar exchange rate - 12 months to 31 March 2010
(Please refer to www.aquariusplatinum.com for the graph)
Average PGM basket prices achieved at Aquarius operations: US$ per 4E PGM
ounce
Basket prices (Quarter ended)
Jun 2009 Sep 2009 Dec 2009 March
2010
Kroondal 915 972 1,163 1,328
Marikana 928 999 1,173 1,328
Mimosa 751 805 910 1,074
CTRP 993 1,074 1,266 1,456
Platinum Mile 930 1,004 1,192 1,308
Blue Ridge - 967 1,138 1,313
Aquarius Group 879 931 1,094 1,267
average
PGM basket prices (Dollar and Rand per 4E PGM ounce) - 12 months to 31 March
2010
(Please refer to www.aquariusplatinum.com for the graph)
Financials
Aquarius has recorded a significant financial improvement on the previous
corresponding period (pcp), increasing its profit after tax to $23.3 million,
(up from a $6.5 million profit) for the quarter ended 31 March 2010 (the
"Result").
This improvement was evident in the 110% increase in mine EBITDA to $46
million. The improved result was despite comparatively flat production and
reflects improved and less volatile PGM prices.
Revenue for the quarter (PGM sales and interest income) was up 64% from $78.5
million in the pcp to $128.8 million. Measured on a PGM ounce basis, this
represents an increase from $808 per PGM ounce in the pcp to $1,347 per PGM
ounce. The stability and recovery in PGM prices has seen an end to the
abnormally high sales adjustments experienced in the 2009 financial year.
Table A: Aquarius attributable production and net profit summary by quarter
Quart Quart Quart Quart Quar
er er er er ter
ended ended ended ended ende
Mar June` Sep Dec d
`09 09 `09 `09 Mar
`10
4PGE production (oz) from 97,21 98,25 89,26 103,0 95,6
operating mines 2 9 5 60 12
Blue Ridge (4PGE oz) - - 7,235 9,299 7,66
9
Total 4PGE production 97,21 98,25 96,50 112,3 103,
2 9 0 59 286
Revenue $66.7 $80.6 $77.6 $106. $116
m m m 9m .5m
PGM sales adjustments - $11.8 $12.3 $8.2m $13.4 $12.
realised & Unrealised m m m 3m
Total revenue $78.5 $92.9 $85.8 $120. $128
m m m 3m .8m
Net profit/loss before tax $5.5m $26.4 $17.9 $24.2 $26.
and exceptionals m m m 2m
Fair value movement in - $3.8m ($3.4 -
derivative liability m)
Early redemption of Rand ($20. -
convertible notes 8m)
"One - off" costs relating - - ($3.2 - -
to the Ridge acquisition m)
Income tax $1.0m ($12. ($1.8 ($15. ($3.
4m) m) 6m) 0m)
Net Profit/(Loss) after tax $6.5m $17.8 $9.5m ($5.7 $23.
& outside equity Interests m m) 2m
Production for the quarter was a credible 103,286 PGM ounces (including 7,669
PGM ounces from the Blue Ridge mine that was acquired from Ridge Mining in
July 2009), given the lower number of shifts worked in the quarter due to the
Christmas holiday break.
Unit costs increased during the quarter in line with inflationary pressures,
increased electricity charges and lower production. Higher PGM prices (up 16%)
were able to mitigate these cost increases with gross margins at Kroondal,
Marikana and Mimosa all higher for the quarter.
Platinum Mile unit costs have been revised to include the plant feed supplier
compensation fee, previously accounted for as a corporate fee. Platinum Mile`s
unit costs increased 65% due to a 68% decrease in production as a result of
lower volumes processed and lower grade feedstock. Platinum Mile`s cost
structure is essentially fixed in nature and therefore reacts materially to
production.
CTRP`s unit costs increased 56% as a result of a 39% drop in production in the
quarter. Lower production was due to a lower head grade and also lower
recoveries from material that was more coarse-grained and oxidised. Costs are
expected to normalise once production improves.
Unit costs at Mimosa increased by 16% as a result of several equipment
failures involving conveyors and ventilation which have since been rectified,
together with some areas of bad ground which had to be mined around. 1.4
kilometres of conveyor belt was replaced and expensed during the quarter.
Lower mining volumes and the use of stockpiled ore also had a negative effect
on costs.
Operating costs at Blue Ridge will continue to be capitalised during the ramp-
up phase.
Administration costs of $2.9 million included $0.6 million of costs associated
with M&A activity.
Finance charges of $8.4 million for the quarter were lower as a result of the
repayment of the bridge facility of $177 million in May 2009. Included in
finance charges was interest expense of $4.3 million on group debt, and a non-
cash component comprising interest accretion on the convertible note of $2.3
million and unwinding of the rehabilitation provision of $1.3 million.
Depreciation and amortisation were in line at $10.5 million.
Cash
Group cash balances decreased by $83.2 million since December 2009 following
the repayment of $101 million in January 2010 to holders of Rand convertible
notes.
Net operating cash flow for the quarter comprised $118.4 million from sales,
$79.6 million paid to suppliers and net finance expenses of $0.4 million.
Material cash flow items (other than mine operations) that affected cash
balances during the quarter included capital expenditure of $14 million AQPSA
operations, Mimosa operations and the Blue Ridge mine.
Group cash at 31 March 2010 was held as follows:
AQP $294 million
AQPSA $ 48 million
ACS(SA) $ 4 million
Mimosa $ 11 million
Platmile $ 2 million
Ridge Mining $ 22 million
Total $381 million
Aquarius Platinum Limited
Consolidated Income Statement
Quarter ended 31 March 2010
$`000
Note Quarter Nine Financial
Ended Months Year Ended
Ended
31/03/10* 31/03/10* 30/06/09
Aquarius PGM 103,286** 208,859 455,675
Production
(attributable ounces)
Revenue (i) 128,792 334,881 310,556
Cost of sales (ii) (89,589) (251,969) (334,327)
(including D&A)
Gross profit/(loss) 39,203 82,912 (23,771)
Other income 122 632 1,815
Admin & other (iii) (2,859) (11,127) (9,919)
operating costs
Foreign exchange (iv) (2,104) 13,982 (20,328)
gain/(loss)
Finance costs (v) (8,403) (19,047) (35,968)
Loss on early - (20,836) -
redemption of
convertible note
Fair value movement in - - 3,829
derivative liability
Impairment 279 785 (13,050)
reversals/(losses)
Transaction and - 246 -
acquisition costs
associated with Ridge
Mining
Profit/(loss) before 26,238 47,547 (97,392)
tax
Income tax (3,004) (20,442) 15,808
benefit/(expense)
Profit/(loss) after 23,234 27,105 (81,584)
tax
Minority interest - - (35,842)
Net profit/(loss) 23,234 27,105 (45,742)
EPS (basic - cents per 5.02 5.86 (13.30)
share)
*Unaudited
** PGM production of 103,286 includes 7,669 PGM ounces from Blue Ridge -
operating costs and revenue currently capitalised.
Notes on the March 2010 Consolidated Income Statement
(i) Revenue for the quarter was higher despite lower production due to higher
PGM prices, up 16% in both Dollar and Rand terms.
(ii) Cost of sales per PGM ounce increased as a result of inflationary
pressures and lower production.
(iii)Administration and other costs of $2.8 million included $0.6 million
of costs associated with M&A activity.
(iv) Foreign exchange losses largely attributable to positive revaluation
adjustments on intergroup debt
(v) Finance costs included interest expensed of $4.3 million on group debt,
non-cash interest accretion on the convertible note of $2.3 million and
unwinding of the rehabilitation provision of $1.3 million.
Aquarius Platinum Limited
Consolidated Cash flow Statement
Quarter ended 31 March 2010
$`000
Quarter Nine Financial
Ended Months Year
Ended Ended
Note 31/03/10* 31/03/10* 30/06/09
:
Net operating cash (i) 39,265 56,920 13,219
inflow
Net investing cash (ii) (14,269) (44,150) (74,593)
outflow
Net financing cash (iii (105,776) 207,096 38,754
inflow/(outflow) )
Net increase (80,780) 219,866 (22,620)
(decrease) in cash
held
Opening cash 464,576 153,600 170,956
balance
Exchange rate (2,467) 7,863 5,264
movement on cash
Closing cash 381,329 381,329 153,600
balance
* Unaudited
Notes on the March 2010 Consolidated Cash flow Statement
(i) Net operating cash flow for the March quarter includes $118.4 million
inflow from sales, $79.6 million paid to suppliers and net finance income
of $0.3 million.
(ii) Includes development and plant and equipment expenditure on AQPSA, Mimosa
and capex and opex capitalised on Blue Ridge.
(iii)Includes repayment of RMB convertible note of $101m.
Aquarius Platinum Limited
Consolidated Balance Sheet
At 31 March 2010
$`000
Quarter Financial
Ended Year
31/03/10 Ended
30/06/09
Note: $`000 $`000
Assets
Cash assets 381,329 153,600
Current receivables (i) 165,551 119,866
Other current assets (ii) 44,438 43,652
Property, plant and equipment (iii) 274,238 230,057
Mining assets (iv) 425,321 270,374
Intangibles (v) 76,318 74,167
Other non-current assets (vi) 27,703 25,287
Total assets 1,394,898 917,003
Liabilities
Current liabilities (vii) 75,372 81,514
Non-current payables (viii) 10,831 1,555
Non-current interest-bearing (ix) 257,846 70,034
liabilities
Other non-current liabilities (x) 196,524 155,730
Total liabilities 540,573 308,833
Net assets 854,325 608,170
Equity
Parent entity interest 854,325 608,170
Total equity 854,325 608,170
* Unaudited
Notes on the March 2010 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, Everest and Ridge
mining (mining rights)
(v) Platinum Mile Resources acquisition
(vi) Includes recoverable portion of rehabilitation provision from P&SA
partner ($12.2 million), investment in rehabilitation trust ($12.6
million) and investments in unlisted entities ($2.8 million)
(vii)Includes trade creditor and other payables
(viii)Includes rehabilitation obligations on P&SA1 and P&SA2
structures
(ix) Includes convertible note liability ($234.1 million) and
Ridge group loans ($23.5 million)
(x) Reflects deferred tax liabilities $123.9 million, provision for closure
costs $72.6 million
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 100%)
P&SA 1 at Kroondal
Safety
- The 12-month rolling average disabling injury incidence rate (DIIR per
200,000 hours) improved to 0.54 from 0.63 in the previous quarter
- During the quarter, Kroondal achieved 15 months without a fatal accident
Mining
- Production tonnes for the quarter decreased by 16% to 1,475,750 tonnes
- Head grade deteriorated slightly from 2.57 g/t to 2.56 g/t
Processing
- Tonnes processed decreased by 6% to 1,580,045 tonnes
- Recoveries increased by 1% to 79%
- PGM production decreased by 5% to 103,071 4E PGM ounces (51,536 4E PGM
ounces attributable)
P&SA1 at Kroondal PGM production and Rand cash costs per PGM ounce (100%)
(Please refer to www.aquariusplatinum.com for the graph)
Revenue
Revenue for the quarter increased by 8% to R979 million (R490 million
attributable) due to a higher Rand basket price and positive PGM sales
adjustments (PGM sales are accounted for in the month of delivery to the
refineries and adjusted for actual prices at the conclusion of the three-month
refining pipeline).
The Kroondal US Dollar-denominated basket price improved by 14% compared to
the previous quarter to an average of $1,328 per PGM ounce. The slight
depreciation of the Rand on average resulted in Kroondal`s Rand-denominated
basket improving by 15% compared to the previous quarter Pricing stability
contributed to positive PGM sales adjustments, which decreased to R93 million
in Q3 2010 from R116 million in Q2 2010.
Operations
Mining operations had a typically slow start-up after the Christmas break. As
a result there were only 65 mining shifts in Q3 versus 75 in Q2, but despite
this the on-reef stoping square metres mined increased by 0.4% and primary
development (currently at 3,203 metres) increased by 34% during the quarter.
Overall tonnes hoisted decreased by 16% to 1,475,750 tonnes for the quarter.
Lower mining volumes were partially offset by the use of ore from the
stockpile. Overall volumes processed decreased by 6% to 1,580,045 tonnes with
stockpiles at the end of the quarter totalling 25,426 tonnes.
Off-reef mining decreased from 5.3% of the on-reef square meters mined to 1.1%
as fewer unforeseen geological structures were encountered. Recoveries
marginally increased from 78% to 79% as a result of a more stable
metallurgical operating regime.
PGM production decreased by 5% to 103,071 4E PGM ounces (51,535 4E PGM ounces
attributable).
Kroondal: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs Attributable
ended to Aquarius
Mar 2010 60,580 30,729 11,228 534 103,07 51,535
1
Dec 2009 63,772 32,153 11,808 521 108,25 54,127
4
Sep 2009 52,287 26,366 9,708 447 88,808 44,404
Jun 2009 62,535 31,158 11,492 535 105,72 52,860
0
Operating cash costs
Cash costs increased by 12% to R386 per tonne, whilst costs per PGM ounce
increased by 11% to R5,905. Despite absolute operating costs reducing from
R604 million to R580 million for the quarter, unit costs nonetheless increased
as a result of lower volumes and the consumption of 105,000 tons from the
stockpile at a cost of R29 million. The increased PGM basket price improved
Kroondal`s cash margin for the period slightly from 37% to 38%, despite these
cost pressures.
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 5,905 4,825 4,700
Capital expenditure
Capital expenditure for the quarter was R43 million (R416 per PGM ounce). This
was all stay-in-business capital, primarily related to the establishment of
underground infrastructure. All critical capital expenditure is up to date.
P&SA2 at Marikana
Safety
- The 12-month rolling average DIIR for the quarter improved to 0.74 per
200,000 hours worked from 1.08 in the previous quarter
- Marikana has achieved 14 months without a fatal accident
Mining
- Production tonnes decreased by 16% to 527,817 tonnes, comprising 393,934
tonnes from underground and 133,883 tonnes from open-pit operations
- Head grade decreased by 6% to 2.57 g/t
Processing
- Tonnes processed decreased by 6% to 561,740 tonnes
- Recoveries increased by 7% to 76%
- PGM production decreased by 5% to 35,147 4E PGM ounces (17,574 4E PGM
ounces attributable)
P&SA2 at Marikana PGM production and Rand cash costs per PGM ounce (100%)
(Please refer to www.aquariusplatinum.com for the graph)
Revenue
Revenue at Marikana increased by 6% to R344 million (R172 million
attributable) largely due to a stronger basket price.
The Marikana US Dollar-denominated basket price averaged $1,328 per PGM ounce,
13% higher than the previous quarter. The slight depreciation of the Rand
resulted in the Marikana Rand-denominated basket improving by 14% over the
same period. Pricing stability also continued to contribute to positive PGM
sales adjustments, which decreased to R38 million in Q3 2010 from R42 million
in Q2 2010.
Operations
The Marikana Mine was also negatively affected by the Christmas break and as a
result had only 64 production shifts in this quarter, 8% fewer than the 69
shifts in Q2. Because of this, underground production decreased by 10%
compared to the previous quarter, to 393,934 tonnes. The ratio of mining from
underground to opencast increased from 68% to 73%, as the production build-up
at 4 Shaft continues and the opencast mine approaches the end of its life.
The M5 decline has intercepted reef and all further sinking will now be done
on reef, but the development to 4 Shaft is currently off reef as it negotiates
a fault. Opencast production was negatively affected by a three-week strike
suffered by MCC, the open pit contractor at Marikana, while the National Union
of Mineworkers were negotiating for access rights at several mines across the
Bushveldt.
Processed tonnes mirrored the mining tonnes with total volumes processed at
561,740 tonnes, 6% lower than in the previous quarter.
The head grade decreased by 6% to 2.57g/t, as development activities at 5
Shaft contributed to an increase in off-reef mining.
Recoveries were 7% higher at 76%, benefitting from the change in mining mix
and a focus on operating regime stability.
PGM production for the quarter decreased by 5% to 35,147 4E PGM ounces (17,574
4E PGM ounces attributable).
Marikana: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs Attribu
ended table
to
Aquariu
s
Mar 2010 21,007 10,236 3,698 206 35,147 17,574
Dec 2009 22,838 10,470 3,642 209 37,160 18,580
Sep 2009 19,515 8,407 3,100 200 31,222 15,611
Jun 2009 23,155 10,368 4,010 220 37,753 18,877
Operating cash costs
Cash costs increased by 4% to R448 per tonne, while costs per PGM ounce
increased by 3% to R7,142 as a result of lower ounce production.
Gross revenue increased by 6% to R344 million as a result of the stronger
basket price, resulting in a cash margin of 27%.
Marikana: Operating cash costs per ounce
4E 6E 6E net of by-
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) products
(Ni&Cu)
Marikana 7,142 5,876 5,723
Capital expenditure
Stay-in-business capital expenditure totalled R21 million (R607 per PGM
ounce), an increase of 17%. This is expected to be a temporary increase
occasioned by lower production volumes and the move from opencast to
underground mining, and consisted primarily of underground infrastructure
establishment. All critical capital expenditure is up to date.
Contractor dispute with Moolman Mining
As disclosed in the previous Aquarius Platinum quarterly update, this dispute
has been referred to the courts and provisional dates in September 2010 have
been allocated for the trial.
Everest Mine
Safety
The safety performance at Everest remains positive, although the first lost
time injury (LTI) since November 2008 was recorded during the quarter. The 12
month rolling DIIR for the period was 0.28.
Operations
Phase 2 of the re-establishment project is progressing well. It includes the
establishment of permanent underground services, the reclamation of
infrastructure, the equipping of declines and strike sections and the re-
establishment of stoping sections. The majority of the permanent
infrastructure is now more than 60% complete.
All decline shafts in the North and South were completed during this quarter
except for the chairlift decline, which will be completed in the fourth
quarter. The conveyor belt system has been commissioned up to the 3rd strike
section underground. Construction of permanent surface infrastructure such as
mine services, roads and overland conveyors is in progress and proceeding as
per plan.
Mining commenced during the quarter with reef being stockpiled ahead of the
concentration plant start-up. The progress of project execution remains on
track for Everest to be in a position to resume milling operations in the
first quarter of the 2011 financial year.
Construction of the chromite spiral plant commenced at the beginning of the
quarter, with the project now more than 70% complete. The majority of the
civil and mechanical installations are complete, with commissioning of the
spiral plant planned to coincide with the start of milling operations at
Everest.
(Please refer to www.aquariusplatinum.com for the pictures)
Capital Expenditure
As previously announced, the total re-establishment project capital (both
Phase 1 and Phase 2) to put Everest in a position to resume operations amounts
to R259 million. Project expenditure for the quarter is well within budget at
R57 million, bringing the total project expenditure to date to R109 million.
MIMOSA INVESTMENTS (Aquarius Platinum - 50%)
Mimosa Platinum Mine
Safety
- The 12-month rolling average DIIR for the period improved to 0.09 from
0.14 in the previous quarter
- Zero lost-time injury was recorded during the quarter under review
Mining
- Underground production decreased by 8% to 486,804 tonnes
- Head grade increased marginally to 3.60g/t
Processing
- Concentrator plant recoveries increased to 76.1% from 75.5%
- Total mine production was reduced to 49,008 4E PGM ounces (24,504 4E PGM
ounces attributable)
- The surface stockpile decreased to a total of 75,985 tonnes at the end of
the quarter
Mimosa Mine PGM production and Dollar cash cost per PGM ounce (100%)
(Please refer to www.aquariusplatinum.com for the graph)
Revenue
The average achieved PGM basket price for the quarter increased by 18% to
$1,074 per PGM ounce, while the average achieved nickel price decreased by 2%
to $8.07 per pound. Revenue for the quarter increased to $70 million, with
base metals accounting for approximately 23% of revenue. An $8 million
positive price adjustment is included in revenue for the quarter.
The cash margin increased to 49% from 45% in the previous quarter, mainly due
to the firming of metal prices and positive price adjustments.
Operations
Mimosa mining operations hoisted 486,804 tonnes of ore in the current period
compared to 528,687 tonnes in the previous quarter, as a result of a since
resolved equipment breakdown and some areas of bad ground. Volumes milled and
processed totalled 556,870 tonnes, with 70,066 tonnes being taken from the
stockpile. As a result the surface stockpile totalled 75,985 tonnes at the
quarter end.
The average plant head grade increased slightly to 3.60g/t, and recoveries
increased to 76.1% from 75.5% in the previous quarter.
As a result of these factors, PGM production decreased by 2% to 49,008 4E PGM
ounces (24,504 4E PGM ounces attributable) during the quarter, with base
metals production declining by a similar margin.
Mimosa: PGMs in concentrate produced (ounces)
Quarter Pt Pd Rh Au PGMs Attributable
ended to Aquarius
Mar 2010 24,898 18,744 1,972 3,394 49,008 24,504
Dec 2009 25,388 19,237 2,012 3.442 50,079 25,039
Sep 2009 25,691 19,569 2,096 3,473 50,829 25,414
Jun 2009 23,910 17,979 1,851 3,135 46,875 23,437
Mimosa: Base metals in concentrate produced (tons)
Mine production Attributable to Aquarius
Quarter Ni Cu Co Ni Cu Co
ended
Mar 2010 685 561 19 343 281 10
Dec 2009 695 574 19 348 287 10
Sep 2009 705 572 19 353 286 10
Jun 2009 667 534 18 334 267 9
Operating cash costs
During the quarter, cash costs increased by 16% to $58 per ROM tonne, and
costs per PGM ounce increased by 15% to $663. This was largely as a result of
several equipment failures involving conveyors and ventilation which have
since been rectified, together with some areas of bad ground which had to be
mined around. Lower mining volumes and the use of stockpiled ore also had a
negative effect on costs.
The gross cash margin increased to 49% from 45% in the previous quarter mainly
due to rising PGM basket prices. Net of by-products, cash costs were $333 per
PGM ounce, compared with $261 per PGM ounce in the previous quarter, primarily
due to the increase in operating cash costs.
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 663 629 333
Update on foreign currency regime in Zimbabwe
Since the introduction of the use of multi currencies in the economy in
January 2009, there has not been any significant change in the foreign
currency environment. The US Dollar and the South African Rand remain the most
widely used currencies in the economy. The 2010 Fiscal Budget announced in
December 2009 did not make any changes to the foreign currency environment,
but as of 1 January 2010 the corporate tax rate was increased from 15% to 25%,
and royalties on precious metals were increased from 3% to 3.5% of revenue.
Update on the Indigenisation Bill
Following the signing into law of the Indigenisation Bill, companies were
required to submit to the Zimbabwean Ministry of Youth Development,
Indigenisation and Economic Empowerment their indigenisation plans and
proposals by 15 April 2010. Mimosa has complied with this requirement.
RIDGE MINING PLC (Aquarius Platinum - 50%)
Blue Ridge Platinum Mine
Safety
- The 12-month rolling average DIIR for the quarter deteriorated to 1.43
from 1.09 in Q2
- 9 LTIs were reported, a reduction compared to the 18 reported for the
previous quarter
- The improvement in reported LTIs is attributable to increased training
and awareness following the fatality in December together with
intensified supervision and a zero tolerance approach towards safety,
driven from the top down
Mining
- Production from underground operations fell by 39% to 135,621 tonnes
- Head grade deteriorated to 2.24 g/t
- Stockpiles at the end of the quarter totalled approximately 11,000 tonnes
Processing
- Tonnes processed decreased by 11% to 297,826 tonnes
- Recoveries fell from 74% to 72%
- PGM production decreased by 18% to 15,338 4E PGM ounces (7,669 4E PGM
ounces attributable)
Revenue
Revenue for the quarter decreased by 7% to R150 million (R75 million
attributable) due principally to the 18% decrease in PGM production. The mine
basket price achieved at Blue Ridge for the quarter improved by 15% to an
average of $1,313 per PGM ounce.
Operations
Continued improvements were made on the underground mining processes and the
concentrator plant process at the Blue Ridge mine.
During the quarter it was decided that the same "Managed Contract Model" using
Murray and Roberts Cementation (MRC) employed at the Kroondal and Marikana
Mines would be adopted at Blue Ridge. A work stoppage occurred during this
transition period as a disagreement emerged between employees and the unions
in relation to leave payments. Accumulated leave was subsequently paid to all
employees. All employees were transferred to MRC on the 1st of April
according to the process set out in section 197 of the Labour Relations Act.
Several factors negatively influenced the development and underground
production performance during the quarter, in addition to this unprotected
industrial action on 17 March 2010. The most significant of these was the slow
return of mine workers following the Christmas and New Year holiday break,
with excessively high absenteeism among drill rig operators and rock drill
operators. In addition to this, six days were lost when the DMR issued a
Section 54 notice following a systems audit.
As a result, both development and underground mining deteriorated compared to
the previous quarter. 1,513m of primary development was achieved for the
quarter compared to 2,502m achieved in the previous quarter, while underground
mining for the quarter fell from the 220,716 tonnes achieved in the previous
quarter to 135,621 tonnes.
The concentrator plant availability decreased quarter on quarter, mainly due
to liner failure in the primary mill. The liners in the primary mill were
installed in December 2009, and the first liner failure was detected after
only two weeks of operation. The risk was managed until the end of the
quarter, at which point the manufacturer of the liners was able to complete
the manufacture of a full set of replacement liners and install them under
guarantee.
Processed volumes of 297,826 tonnes were lower than those in the previous
quarter. Process instability in the float section of the plant together with
low grade material from the stockpiles resulted in lower than planned
recoveries. DRA (a metallurgical consultancy) has been contracted to conduct
a de-bottlenecking exercise and a project to optimise the plant and to upgrade
the SCADA and PLC controls to an automated system. The project will be
completed in the fourth quarter. Stability and process control resulted in
recoveries that remained at 72%.
The head grade averaged 2.24g/t for the quarter, a deterioration against the
previous quarter.
Total PGM production was 15,338 4E PGM ounces (7,669 4E PGM ounces
attributable to Aquarius).
Blue Ridge: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs Attribut
(4E) able to
Aquarius
Mar 2010 9,237 4,49 1,45 150 15,338 7,669
9 2
Dec 2009 11,20 5,45 1,76 181 18,598 9,299
1 4 2
01111
1
Sep 2009 8,598 4,38 1,34 141 14,469 7,235
3 7
Jun 2009 - - - - - -
Operating cash costs
Total operating expenditure during the quarter amounted to R127 million, a 20%
decrease on the previous quarter. Operating expenditure continued to be
capitalised during the ramp-up phase but a modest on-mine operating cash
margin (before finance costs) of R23 million was achieved. The resultant
capitalisation of cost and revenue to the project (including finance costs)
amounted to R8 million for the quarter.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD
Chromite Tailings Retreatment Plant (CTRP) (ACS(SA) - 50%)
Safety
- The DIIR remained at zero for the quarter
Resource development
- During the quarter Aquarius was able to finalise the right to process
significant additional chrome tailings dams
Processing
- Material processed increased by 4% to 75,873 tonnes
- Grade decreased by 12% to 2.06g/t
- Recoveries decreased by 33% to 25%
- Production decreased by 39% to 1,268 4E PGM ounces (634 4E PGM ounces
attributable)
CTRP PGM production and Rand cash costs per PGM ounce (100%)
(Please refer to www.aquariusplatinum.com for the graph)
Revenue
The achieved mine basket price for the quarter averaged $1,456 per PGM ounce,
15% higher than the previous period.
Operations
Material processed increased to 75,873 tonnes for the quarter, at a lower head
grade of 2.06g/t. Recoveries also decreased to 25% from 33% in the last
quarter. The lower grades and recoveries where driven by the treatment of the
last remaining areas of the Kroondal Chrome Mine Tailings dam. This material
is coarse grained and more oxidised, which resulted in the lower recoveries.
The net result was a 39% drop in the production of 4E ounces to 1,268 PGM
ounces (634 PGM ounces attributable). The recently secured alternative sources
of feed material to the CTRP plant are expected to greatly improve plant
stability in feed rates, recoveries and production of 4E ounces (see below).
Resource development
- During the quarter Aquarius was able to finalise the rights to process
additional chrome tailings dams in the following areas:
- Rustenburg Chrome Mining Holdings - 3 tailings dams (the Bayer Dumps)
- Xstrata South Arica (Pty) Ltd - 2 tailings dams, (the Purity and Cashan
dumps, in the Kroondal area)
These 5 tailings dams will secure feed to the CTRP plant for an estimated 5 to
7 years, and provide redundancy and flexibility in material supply.
CTRP: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs Attribut
(4E) ableto
Aquarius
Mar 2010 777 279 210 3 1,268 634
Dec 2009 1,26 464 353 4 2,087 1,044
7
Sep 2009 1,04 381 308 3 1,740 870
8
Jun 2009 1,02 369 292 4 1,689 845
4
Operating costs
Cash costs increased by 56% to R4,478 per PGM ounce primarily as a result of
the 39% drop in ounces produced.
The cash margin for the period was 55%, a decrease from 66% 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 4,478 3,094 3,016
Platinum Mile Resources (ACS (SA) - 50%)
Safety
- The DIIR was zero for the quarter
Processing
- Tailings processed totalled 1,849 million tonnes.
- PGM grade was 0.51g/t, a decrease of 9% on the previous quarter
- Production was 2,737 4E PGM ounces (1,369 4E PGM ounces attributable)
Platinum Mile PGM production and Rand cash costs per PGM ounce (100%)
(Please refer to www.aquariusplatinum.com for the graph)
Revenue
Revenue decreased to R33 million (R17 million attributable), despite the
achieved mine basket price for the quarter averaging $1,308 per PGM ounce, 10%
higher than the previous quarter.
Operations
Production levels decreased by 68% during the quarter as a result of lower
volumes processed, falling head grade and significantly reduced recoveries. 6%
less tonnes were treated, while the head grade of the tailings processed
decreasing to 0.51g/t from 0.56g/t in the previous quarter. Recoveries are
highly sensitive to grade and volume, and as a result decreased to 9% compared
to 24% in the previous quarter.
As a result, production fell to 2,737 4E PGM ounces (1,369 4E PGM ounces).
Options to improve metal output from Platinum Mile are being explored with the
feed supplier.
Platinum Mile: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs Attributable to
ended (4E) Aquarius
Mar 2010 1,60 835 243 58 2,737 1,369
1
Dec 2009 4,95 2,64 769 170 8,539 4,269
3 7
Sep 2009 3,44 1,83 534 119 5,932 2,966
0 9
Jun 2009 2,59 1,38 403 90 4,479 2,239
8 8
Operating costs
Platinum Mile unit costs have been revised to include the supplier
compensation fee which is payable out of the profits generated by Platinum
Mile and which was previously accounted for as a corporate fee. Platinum
Mile`s unit costs increased 65% due to a 68% decrease in production as a
result of lower grades and volumes processed. Platinum Mile`s cost structure
is essentially fixed in nature and therefore reacts materially to production.
Cash costs were R8,236 per PGM ounce under the new calculation methodology
(see Statistics sheet at the end of this document).
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 8,236 7,099 nm
Mile
Capital expenditure
Capital expenditure to sustain operations amounted to R1.3 million.
CORPORATE MATTERS
Resignation of Managing Director: Aquarius Platinum (South Africa)
(Proprietary) Limited
The Company regrets to announce the resignation of Mr Hugo Holl as Managing
Director of Aquarius Platinum (South Africa) (Proprietary) Limited. Mr Holl
has decided to leave Aquarius for personal reasons, and the Company wishes to
thank him for his significant contribution to the Aquarius group over the past
8 years and wish him well in his future endeavours.
Mr Holl will remain in his current position until the end of the current
financial year in order to effect an orderly handover of his responsibilities.
A search for his successor has commenced both internally and externally and a
further announcement in this regard will be made in due course.
More information on all corporate matters can be found at
www.aquariusplatinum.com
Statistical Information:
(Please refer to www.aquariusplatinum.com for the statistical information)
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
Tim Freshwater Non-executive
Edward Haslam Non-executive
Sir William Purves Non-executive (Senior Independent Director)
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)
David Dix
Zwelakhe Mankazana
Nicholas Sibley
Nomination Committee
The full Board comprises the Nomination Committee
Company Secretary
Willi Boehm
Investor Relations
Gavin Mackay Business Development & Communications
Executive
AQPSA Management
Stuart Murray Executive Chairman
Hugo Holl Managing Director
Helene 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
Abraham van Ghent General Manager: Kroondal
Wessel Phumo General Manager: Marikana
Gabriel de Wet General Manager: Engineering
Augustine Simbanegavi General Manager: Everest
Anthony Joubert General Manager: Blue Ridge
ACS (SA) Management
Paul Smith Director: New Business
Mimosa Mine Management
Winston Chitando Managing Director
Herbert Mashanyare Technical Director
Peter Chimboza Resident Director
Fungai Makoni General Manager Finance & Company
Secretary
Platinum Mile Management
Richard Atkinson Managing Director
Paul Swart Financial Director
Issued Capital
At 31 March 2010, the Company had in issue: 462,755,572 fully paid common
shares and 1,017,930 unlisted options.
Substantial Shareholders 31 Number of Percentage
March 2010 Shares
Savannah Consortium 68,658,728 14.84
HSBC Custody Nominees 34,394,034 7.43
(Australia) Limited
JP Morgan Nominees Australia 31,803,201 6.87
Limited
Trading Information
ISIN number BMG0440M1284
ADR ISIN number US03840M2089
Convertible Bond ISIN number XS0470482067
Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE)
Liberum Capital Euroz Securities Rand Merchant Bank
Limited Level 14, The (A division of
City Point, 1 Quadrant FirstRand Bank
Ropemaker Street, 1 William Street, Limited)
London, EC2Y 9HT Perth WA 6000 1 Merchant Place
Telephone: +44 (0) Telephone: +61 Cnr of Rivonia Rd
20 3100 2000 (0) 8 9488 1400 and Fredman Drive,
Bank of America Sandton 2146
Merrill Lynch Johannesburg South
2 King Edward St Africa
London, EC1A 1HQ
Telephone: +44 (0)20
7628 1000
Aquarius Platinum (South Africa) (Proprietary) Ltd
100% Owned
(Incorporated in the Republic of South Africa)
Registration Number 2000/000341/07
1st Floor, Building 5, Harrowdene Office Park, Western Service Road, Woodmead
2191, South Africa
Postal Address: PO Box 76575, Wendywood, 2144, South Africa.
Telephone: +27 (0)11 656 1140
Facsimile: +27 (0)11 802 0990
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 www.aquariusplatinum.com or contact:
In Australia
Willi Boehm
+61 (0) 8 9367 5211
In the United Kingdom and South Africa
Gavin Mackay
gavin.mackay@aquariusplatinum.com
+ 44 7909 547 042
Glossary
A$ Australian Dollar
Aquarius Aquarius Platinum Limited
APS Aquarius Platinum Corporate Services Pty Ltd
AQPSA Aquarius Platinum (South Africa) (Pty) Ltd
ACS(SA) Aquarius Platinum (SA) Corporate Services
(Pty) Ltd
BEE Black Economic Empowerment
BRPM Blue Ridge Platinum Mine
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 frequency rate - being the number of
ost-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 formerly South African Government Department
of Minerals and Energy Affairs
DMR South African Government Department of Mineral
Resources and Energy, formerly the DME
Dollar or $ United States Dollar
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 Limited
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
nm Not measured
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.
Tonne 1 Metric tonne (1,000kg)
UG2 Reef A PGE-bearing chromite layer within the Critical
Zone of the Bushveld Complex
Z$ Zimbabwe Dollar
Sponsor in South Africa
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Date: 29/04/2010 10:19:02 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
