| Wed 12 May 2010, 14:01 | | ARQ - Anooraq announces results for the period ended March 31 2010 |
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ARQ
ARQ
ARQ - Anooraq announces results for the period ended March 31, 2010
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 MARCH 31, 2010
BOKONI COMPLETES LABOUR RESTRUCTURING AND LAYS THE FOUNDATION FOR FUTURE
PRODUCTION GROWTH
Anooraq announces its production and financial results for the three months
ended March 31, 2010. 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:
- Completion of labour restructuring
- Foundation laid for production growth from April 2010
- Absolute operating costs continue to decrease
- Cash operating margin increases by 33%
- 1.5 million fatality free shifts achieved
The first quarter of the 2010 financial year was primarily focused on the
completion of a significant labour restructuring at Bokoni Platinum Mines
("Bokoni"). The restructuring programme was successfully concluded by March 31,
2010, some three months after labour restructuring agreements were reached with
the Bokoni trade unions in December 2009.
Philip Kotze, President and Chief Executive Officer ("CEO") of Anooraq,
commented:
"Implementation of the labour restructuring was a cornerstone for our turnaround
strategy at Bokoni, which we identified when assuming operational control at
Bokoni. Now that the labour restructuring is behind us we can start to focus on
production volume growth, while at the same time maintaining our track record on
absolute cost reductions, thereby improving margins moving forward."
"I am very pleased with the efficiency and speed with which the restructuring
was implemented. Some 840 people, representing a quarter of our own employee
workforce, were affected through the restructuring process. Despite certain
disruptions at the operations and lost shifts arising from the restructuring,
the platform has now been laid to grow the Bokoni production base and our second
quarter results should begin to demonstrate improved production volumes at the
operations."
REVIEW OF OPERATIONAL AND FINANCIAL PERFORMANCE
The results for the quarter ended March 31, 2010 reflect the performance at
Bokoni for the third operational quarter under Anooraq management.
Safety
The increase in the Bokoni lost time injury frequency rate ("LTIFR") from 1.04
to 1.2 (per 200,000 hours worked) quarter-on-quarter remains a focus area for
the management team and a number of on-mine initiatives are being implemented to
improve safety performance. The Company is pleased to report that Bokoni
achieved 1.5 million fatality free shifts during the quarter.
Labour restructuring
A significant labour restructuring at Bokoni commenced in January 2010 and was
completed by March 31, 2010. The labour restructuring included:
- 840 persons moved between positions;
- 374 persons moved from services into production;
- 153 retrenchments;
- 103 dismissals resulting from unprotected industrial action; and
- 6 production shifts lost as a result of labour unrest.
With the labour restructuring complete, Bokoni will now start increasing the
number of stoping teams on site and it is anticipated that by year-end stoping
teams will have increased by 40%, from 70 teams currently to 98 teams in total.
Production
Tonnes milled decreased 8% during the quarter to 229,344, whilst metal output
decreased 13% to 26,677 4E Platinum Group Metals ("PGM (4E)") ounces. Although
the delivered grade remained constant at 4.39g/t PGM (4E), the built up head
grade dropped to 4.05 g/t PGM (4E), mainly as a result of a number of unplanned
concentrator plant stoppages and issues associated with irregular concentrate
dispatch during the quarter. The issues associated with unplanned plant
stoppages have now been rectified.
Metal Q4 2009 production Q1 2010 production Variance
Platinum (oz) 16,132 14,270 (12%)
Palladium (oz) 11,498 9,867 (14%)
Rhodium (oz) 1,816 1,622 (11%)
Gold (oz) 1,065 917 (14%)
Nickel (t) 241 189 (22%)
Copper (t) 143 115 (20%)
Development
Total development metres remained constant at 3,140 metres for the quarter.
Development remains a key focus area at the operations as production volume is
scaled up from April 2010 and onward. Immediately available ore reserves
increased to 15 months during the quarter.
Costs
Although unit costs deteriorated as a result of lower production volumes to
ZAR987/ton (C$137/ton) and ZAR8,516/PGM oz (C$1,180/PGM oz), absolute costs
continued to decrease by 9% quarter-on-quarter from C$32,702 to C$29,606.
The unit cost trend should improve during the second quarter of 2010, as
production volumes increase. The Company remains committed to achieving its
first cost reduction target of ZAR905/ton (C$125/ton) and ZAR6,700/PGM oz
(C$928/PGM oz) by June 2010.
Revenue
Revenue for the quarter decreased by 8% from C$34.823 million for the quarter to
December 2009, to C$32.206 million as a result of reduced production volumes.
Metal prices continued to improve through the quarter with the average gross PGM
(4E) basket price at Bokoni rising 14% to US$1,200/oz and ZAR9,019/oz,
respectively. The average exchange rate achieved for the period was
ZAR7.52:US$1.00 (Q4: ZAR7.49:US$1.00), representing a 1% weakening quarter-on-
quarter.
Profitability
As a result of continuing absolute cost reductions and improving metal prices,
operating margins improved at Bokoni. Cash operating margins increased by 33%
and Bokoni produced an operating profit of C$2.6 million for the quarter,
representing a 23% improvement quarter-on-quarter.
The Company`s basic and diluted loss per share narrowed to C$0.02 cents per
share for the quarter (Q4 2009: C$ 0.03 cents per share).
Capital expenditure
Capital expenditure for the quarter was ZAR43.2 million (C$6.0 million), in line
with the Company`s guidance on capital expenditure through to 2012.
As a consequence of improved profitability margins and containing capital spend
at the operations, the Company`s drawdown on the Anglo Platinum operating
cashflow shortfall facility ("OCSF") was reduced by 73% when compared with the
previous quarter. Anooraq has managed to achieve reduced drawdowns on its OCSF
facility for a third consecutive quarter as follows:-
Quarter Drawdown for quarter (ZAR m) Total drawdown (ZAR m)
Q3 2009 114 114
Q4 2009 80 194
Q1 2010 28 222
Cash and facilities
The Company held cash-on-hand at the end of the period of C$28 million (ZAR202
million) and has access to medium-term debt facilities of approximately C$73
million (ZAR527 million) in order to finance its share of the three-year high
growth plan at Bokoni.
RESULTS PRESENTATION: CONFERENCE CALL DETAILS
Philip Kotze, President and CEO of Anooraq Resources, will host a conference
call to discuss the Company`s operational and financial results for the quarter
ended March 31, 2010 at 10:00 Eastern Standard Time ("EST") (16:00 Central
African Time ("CAT")) on Wednesday, May 12, 2010. The dial-in details for the
conference call are listed below. . A playback will be available for three days
after the call on the Company`s website at www.anooraqresources.com. The
presentation to be used during the call will be available for downloading at
09:00 EST (15:00 (CAT)) on Wednesday, May 12, 2010.
CONFERENCE CALL
Johannesburg, South Africa 16:00 (local time) Toll 011 535 3600
Toll-free 0800 200 648
London, United Kingdom 15:00 (local time) Toll-free 0800 917 7042
New York, United States 10:00 (local time) Toll 1 412 858 4600
Toll-free 1 800 860 2442
Toronto, Canada 10:00 (local time) Toll-free 866 605 3852
PLAYBACK FACILITY
South Africa and Other Code 2159# Toll +27 11 305 2030
United Kingdom Code 2159# Toll-free 0808 234 6771
United States and Canada Code 2159# Toll +1 412 317 0088
FOR AND ON BEHALF OF THE BOARD
Philip Kotze De Wet Schutte
President and Chief Executive Officer 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 on +27 11 883 0831 or in North America on +1 800 667 2114.
ANOORAQ RESOURCES CORPORATION
Philip Kotze
President and Chief Executive Officer
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
Office: +27 11 583 2000
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: 12/05/2010 14:01:03 Produced by the JSE SENS Department.
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