| Thu 5 Aug 2010, 14:01 | | ARQ - Anooraq Resources Corporation - Anooraq announces results for the period |
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ARQ
ARQ
ARQ - Anooraq Resources Corporation - Anooraq announces results for the period
ended June 30, 2010
Anooraq Resources Corporation
(Incorporated in British Columbia, Canada)
(Registration number 10022-2033)
TSXV/JSE share code: ARQ)
NYSE Amex share code: ANO
ISIN: CA03633E1088
("Anooraq" or the "Company")
ANOORAQ ANNOUNCES RESULTS FOR THE PERIOD ENDED JUNE 30, 2010
ANOORAQ CONSOLIDATES 12-MONTH OPERATIONAL TURNAROUND AT BOKONI
August 5, 2010. Anooraq Resources Corporation ("Anooraq" or the "Company")
(TSXV: ARQ; NYSE Amex: ANO; JSE: ARQ) announces production from the Bokoni
Platinum Mines ("Bokoni") and its financial results for the three months ended
June 30, 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. Currency values presented
in South African Rand (ZAR), Canadian dollars (C$) and United States dollars
(US$).
HIGHLIGHTS FOR THE QUARTER:
- Good safety improvement; lost time injury frequency rate ("LTIFR") improved
by 35%
- 4E oz produced up by 12% to 29,926 oz(1)
- Tonnes milled up by 24%
- Unit costs in ZAR/t milled for June on target at ZAR903/t
- Brakfontein production build-up on track
- Capital projects on time and within budget
1. 4E consists of platinum, palladium, rhodium and gold
The second quarter of the 2010 financial year was primarily focused on
reinforcing the effects of the labour restructuring, which was completed in the
previous quarter, with the anticipated improvement in mining performance being
evident in tonnes mined and ounces produced.
Philip Kotze, President and Chief Executive Officer ("CEO") of Anooraq,
commented:
"The June quarter represents a significant milestone for Anooraq. We now have a
full year of management control at the Bokoni operations under our belt and I
believe that we have used our year`s experience to full effect by implementing
the key changes required to begin bringing the best out of this world-class PGM
asset base. We are confident that we have now addressed the key focus areas at
the operations to create a platform to achieve our phase 1 expansion growth
objectives and double our 2009 production base by 2014.
Our mining approach continues to focus on improving efficiencies across the
operation and the completed labour restructuring has both attacked the cost line
and improved our mining performance. The quarter has not been without its
challenges, key of which has been the decrease in our concentrator recoveries.
This was possibly to be expected during the commissioning of the concentrator
upgrade. We have addressed these concentrator recovery issues, particularly
within the UG2 circuit, and recoveries have normalised over the past two months.
The focus on productivity improvement within our mining operations and more
efficient concentrator performance in the coming months is a key objective to
ensure stability and volume growth going forward, and I am confident that we
will achieve this goal in the second half of 2010."
REVIEW OF OPERATIONAL AND FINANCIAL PERFORMANCE
The results for the quarter ended June 30, 2010 reflect the performance at
Bokoni for the fourth operational quarter under Anooraq management and
completion of the first full year of our operational control.
Safety
The Bokoni LTIFR decreased from 1.2 to 0.77 (per 200,000 hours worked) quarter-
on-quarter, a welcome improvement. The Company is pleased to report that Bokoni
achieved two million fatality free shifts during the quarter and congratulates
its employees, unions and management on working together to achieve this
significant milestone.
Production
Tonnes milled increased 24% during the quarter to 283,637, whilst metal output
increased 12% to 29,926 4E ounces. The increase in production volumes reflects
certain efficiency improvements resulting from the labour restructuring; however
the disappointing performance at the concentrator plant, resulting in decreased
recoveries during the upgrade commissioning, negatively affected metal output.
Although delivered grade remained steady at 4.1g/t; built-up head grade declined
by 6% to 3.8g/t for the quarter. The upgrade and subsequent commissioning of the
concentrator during the quarter necessitated the implementation of new automated
control systems, which resulted in the plant requiring an adjustment period to
adapt to its new systems, controls and associated infrastructure. These
challenges translated into reduced recoveries during April, but these challenges
have now been addressed and both the May and June months demonstrated
improvements in recoveries going forward.
Metal Q1 2010 Q2 2010 Variance
production production
Platinum (oz) 14,270 16,091 13%
Palladium 9,867 11,044 12%
(oz)
Rhodium (oz) 1,622 1,769 9%
Gold (oz) 917 1,022 11%
Nickel (t) 189 232 23%
Copper (t) 115 137 19%
Development
Total development metres improved by 7% to 2,791 metres for the quarter, in line
with the operational focus to create greater long-term mining flexibility to
accommodate the incremental on-mine build-up of production teams. This resulted
in an increase in immediately available ore reserves to 15 months.
Costs
The increase in volumes mined led to a 5% reduction in unit operating costs, to
ZAR842/tonne and ZAR942/tonne for cash operating costs and total on mine costs
(including treatment charges), respectively. However, the recovery challenges
faced during the quarter, as detailed above, led to a rise in ZAR/4E unit costs
to ZAR8,916/PGM oz (US$1 181/PGM oz).
Anooraq remains committed to its previously published cost reduction objectives
and is pleased to have achieved its first unit cost reduction target of
ZAR905/tonne (US$125/tonne) by June 2010.
Revenue
Revenue increased by 19% from C$32.2 million to C$38.4 million, as a result of
the improved basket price and rising production volumes.
Metal prices also continued to improve during the quarter with the average gross
PGM (4E) basket price at Bokoni rising 6% to US$1,269/oz (ZAR9,587/oz). The
average exchange rate achieved for the period remained steady at ZAR7.55:US$1.00
(Q1: ZAR7.52:US$1.00).
Profitability
Operational efficiency improvements were further evidenced through the 14%
quarter-on-quarter increase in the operating margin and the resulting 36% rise
in operating profit to ZAR26.4 million (C$3.5 million).
The Company`s basic and diluted loss per share remained steady at C$0.03 cents
per share for the quarter (Q1 2010: C$0.02 cents per share).
Projects and capital expenditure
The Company`s flagship Brakfontein Merensky expansion project continues to show
steady improvement, both in volume growth and production efficiencies.
Brakfontein shaft remains on track to produce 25,000 tonnes per month by
December 2010, moving towards its steady state operational target of 120,000
tonnes per month by 2014.
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.
The Company`s drawdown on the Anglo Platinum(2) operating cashflow shortfall
facility ("OCSF") to June 30, 2010 was ZAR272.7 million (C$37.9million),
leaving an available balance of ZAR477.3 million (C$66.3 million) available for
drawdown, should this be required going forward.
2. See news release dated November 16, 2009 for further details
Cash and facilities
The Company held cash-on-hand at the end of the period of ZAR221 million (C$30.7
million) and has access to medium-term debt facilities of approximately ZAR477
million (C$66.3 million) in order to finance its share of the three-year high
growth plan at Bokoni.
RESULTS PRESENTATION: CONFERENCE CALL DETAILS
Philip Kotze, President & CEO of Anooraq, will host a conference call to discuss
the Company`s operational and financial results for the quarter ended June 30,
2010 at 10:00 Eastern Standard Time ("EST") (16:00 Central African Time ("CAT"))
on Thursday, August 5, 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
Thursday, August 5, 2010.
Conference call
Johannesburg, South 16:00 (local Toll 011 535
Africa time) 3600
Toll- 0800 200
free 648
London, United Kingdom 15:00 (local Toll- 0800 917
time) free 7042
New York, United States 10:00 (local Toll 1 412 858
time) 4600
Toll- 1 800 860
free 2442
Toronto, Canada 10:00 (local Toll- 1 866 605
time) free 3852
Playback facility
SA & Other Code Toll 27 11 305
2159# 2030
United Kingdom Code Toll- 0808 234
2159# free 6771
United States & Code Toll 1 412 317
Canada 2159# 0088
For and on behalf of the Board
Philip Kotze, De Wet Schutte: Chief
President and Chief Financial Officer
Executive 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
Charmane Russell / Nicola Taylor
Office: +27 11 880 3924
Mobile: +27 82 372 5816 / +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: 05/08/2010 14:01:02 Produced by the JSE SENS Department.
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