| Thu 11 Nov 2010, 15:30 | | 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 September 30, 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 SEPTEMBER 30, 2010
Anooraq improves mining performance, long-term strategy on track
November 11, 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
September 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 are
presented in South African Rand (ZAR), Canadian dollars (C$) and United States
dollars (US$).
Highlights for the quarter:
- Tonnes produced up by 8% to 282,173, record square metres mined during
September
- Development metres up by 8%
- 4E oz remain constant quarter-on-quarter at 28,868 oz(1)
- Recoveries increased by 8%
- Concentrator automation completed
(1): 4E consists of platinum, palladium, rhodium and gold
The third quarter of the 2010 financial year was focused on maintaining the
production improvements achieved in the preceding quarters, with a noticeable
increase in production tonnes, development metres, as well as recovered grades.
The automation transition in the concentrator plant necessitated a plant
shutdown during the quarter and the automation changeover was completed post
quarter end, creating a stockpile of 32,000 tonnes (approximately 11% of total
production for the period) to be treated in the final quarter of the year.
Philip Kotze, President and Chief Executive Officer ("CEO") of Anooraq,
commented:
"The September quarter performance confirms our confidence in the orebody at
Bokoni and the team we have put in place to extract maximum benefit for our
stakeholders. Our mining performance continues to improve; we have increased
mining face length availability and mined a record 22,139 square metres (m2)
during the month of September. Our previous projections regarding vamping are
coming to fruition, and these additional tonnes are delivering quality, low-cost
ounces. This quarter gives us our first opportunity to measure our own
performance over a full year, since the quarter ended September 30, 2009 was our
first in management control at Bokoni, and we are satisfied with our progress.
Comparing Q3 2009 to Q3 2010, production is up, development completed has
improved significantly and costs are down. We continue to turn the Bokoni mine
operations around to achieve sustainable operational improvements and long-term
profitability.
The transition to a fully-automated system in the concentrator plant was
completed shortly after the quarter ended and the shutdown period necessary for
the changeover resulted in a stockpile of some 32,000 tonnes (containing
approximately 3,700 PGM ounces), which will be treated in the December quarter.
The improved recoveries at the concentrator, up 8% on the previous quarter,
vindicate our belief in the new system. We are confident that in the coming
quarters there will be improved mining performance and production efficiencies."
Review of operational and financial performance
Safety
The Bokoni lost time injury frequency rate increased from 0.77 to 1.33 (per
200,000 hours worked) quarter-on-quarter, which is in line with the industry
average. Seven shifts were lost at the operations as a result of Section 54
stoppages. The Company is working closely with the Department of Mineral
Resources and the unions to manage safety proactively and a team safety training
programme, called Matomo, has been introduced to raise individual awareness with
respect to safety. The Company regrets to advise that on 7 November 2010, post
quarter-end, an accident occurred at the Middelpunt Hill shaft in which an
employee was fatally injured. The accident is being investigated and remedial
measures will be introduced to prevent such accidents in the future.
Production
Tonnes produced increased 8% during the quarter to 282,173. In addition,
development metres improved by 8% and a 70% increase in vamping tonnes was
achieved. Although recoveries also improved by 8% during the quarter, to 3.67g/t
4E (recovered grade), metal production remained relatively flat quarter-on-
quarter ("q-on-q") at 28,868 4E ounces because 32,000 tonnes (approximately 11%
of total tonnes produced) remained on the stockpile at quarter-end. The
stockpile, which accumulated during the concentrator shutdown, translates into
approximately 3,700 4E ounces that are not reflected in this quarter`s
production numbers and accounts for the 11% decline to 252,862 tonnes milled for
the quarter.
Mining productivity continued to improve, and is up 5% to 4.6m2/Total Employee
Costed (TEC). Despite the increase, there remains much room for improved
operational efficiencies, as we seek to achieve our first productivity target -
improvement to 6m2/TEC - in the medium term.
A summary of metal produced at Bokoni for the quarter is as follows:-.
Metal Q2 2010 Q3 2010 Variance
production production
Platinum (oz) 16,091 15,742 (2%)
Palladium 11,044 10,411 (6%)
(oz)
Rhodium (oz) 1,769 1,685 (5%)
Gold (oz) 1,022 1,030 1%
Nickel (t) 232 219 (6%)
Copper (t) 137 131 (5%)
Costs
Despite the improvement in mining performance, lower milled volumes had a
predictable adverse effect on unit operating costs which increased 10% to
ZAR1,034 per tonne milled for the quarter. Higher winter electricity tariffs
were also a factor in cost increases. Price levels for supplied electricity will
return to normal summer rates in the December quarter. Yearly salary increases
were implemented during the quarter, leading to an 8% rise in labour costs to
the Company.
These cost increases and the lower ounces produced resulted in the 4E operating
costs rising 2% and 5% to ZAR9,057/PGM oz and US$1,236/PGM oz, respectively.
Revenue
Revenue declined by 10% from C$38.4 million to C$34.5 million q-o-q, as a result
of the lower basket price received and a lower number of ounces produced. The
average exchange rate achieved for the period strengthened 3% to ZAR7.33:US$1.00
(Q2: ZAR7.55:US$1.00). The rand strength translated into a 8% decrease in the
gross average rand basket price achieved to ZAR8,804/PGM 4E oz and a similar 5%
fall in the US$ prices to US$1,201/PGM 4E oz.
Profitability
The stockpile build up by quarter-end had a negative influence on revenues,
resulting in decreased profitability and the mine incurred an operating loss for
the quarter. The operating loss for the quarter was C$0.7 million (ZAR5.5
million) with the Company`s basic and diluted loss per share remaining constant
at C$0.04 cents per share for the quarter (Q2 2010: C$0.03 cents per share).
Capital expenditure
Capital expenditure for the quarter was ZAR48.5 million (C$7.1 million), in line
with the Company`s guidance on capital expenditure through to 2012. The pre-
feasibility study at Boikgantsho and optimisation study at Ga-Phasha are
progressing well and are due to be completed in 2011.
The Company`s drawdown on the Anglo Platinum(1) operating cashflow shortfall
facility ("OCSF") to September 30, 2010 was ZAR327.9 million (C$48.2 million),
leaving an available balance of ZAR422.1 million (C$62.1 million) for drawdown,
should this be required going forward.
(1)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 ZAR210.1 million
(C$30.9 million) and has access to medium-term debt facilities of approximately
ZAR422.1 million (C$62.1 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 September
30, 2010 at 10:00 Eastern Standard Time ("EST") (17:00 Central African Time
("CAT")) on Thursday, November 11, 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 (16:00
(CAT)) on Thursday, November 11, 2010.
Conference call
Johannesburg, 17:00 (local Toll 011 535
South Africa time) 3600
Toll- 0800 200
free 648
London, United 15:00 (local Toll- 0800 917
Kingdom time) free 7042
New York, United 10:00 (local Toll 1 412 858
States 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 2159# Toll 27 11 305
2030
United Kingdom Code 2159# Toll- 0808 234
free 6771
United States & Code 2159# Toll 1 412 317
Canada 0088
For and on behalf of the Board
Philip Kotze, President and De Wet Schutte, Chief
Chief Executive Officer 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
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/ Annerie Britz/ Yvette Labuschagne
Office: +27 11 583 2000
The TSX Venture Exchange does not accept responsibility for the adequacy or
accuracy of this release. The NYSE Amex has neither approved nor disapproved the
contents of this press release.
Johannesburg
11 November 2010
JSE Sponsor
Macquarie First South Advisers (Pty) Limited
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.
Date: 11/11/2010 15:30:01 Produced by the JSE SENS Department.
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