| Thu 24 Mar 2011, 15:02 | | 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 December 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 DECEMBER 31, 2010
Anooraq maintains production levels through challenging quarter, returns mine to
operating profit
Anooraq Resources Corporation, today 24 March 2011, announces production from
the Bokoni Platinum Mines ("Bokoni") and its financial results for the three and
twelve months ended December 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. Currency values are
presented in South African Rand (ZAR), Canadian dollars (C$) and United States
dollars (US$).
Key features for the quarter and financial year:
- 4E oz produced up by 7% quarter-on-quarter to 30,776 oz, year-on-year
production remained steady at 116,164 oz
- Tonnes milled up by 10% quarter-on-quarter to 278,242 tonnes, 11% year-on-year
increase to 1,044,084 tonnes
- Operational stability achieved at concentrator, stockpile depleted
- recovered grade improved 4% in quarter to 4.17 g/t 4E
- Improved revenues reflect improving PGM market conditions
- Fatality suffered at Middelpunt Hill shaft
The final quarter of the 2010 financial year maintained the year`s focus on
production, in line with the Company`s Phase 1 growth plan.
Philip Kotze, President and Chief Executive Officer ("CEO") of Anooraq,
commented: "The 2010 year has been one of mixed performance for Anooraq and
Bokoni. Many of the managerial and operational changes implemented at Bokoni
post the takeover in July 2009 have been successful, and the improved mining
performance is testament to the validity of our on-mine strategy. We continue to
focus on operational performance, with improved mining flexibility key to our
ability to deliver results. The concentrator upgrade took longer than we
anticipated but we are starting to see results with higher and more consistent
yields. Importantly, we have made enormous strides in transforming our operating
culture and in embedding many basic good practices in terms of mining and
development, efficiencies, planning and cost control, into the running of the
Company."
Review of operational and financial performance
Safety
The Bokoni lost-time injury frequency rate("LTIFR") decreased from 2.46 to 2.32
hours per 200,000 hours worked quarter-on-quarter, a pleasing downward trend.
Previous LTIFR statistics have been restated to include serious accidents. We
regret to report that there was one fatal accident during the quarter, on 7
November 2010 at Middelpunt Hill shaft. Seven shifts were lost as a result of
stoppages in terms of section 54 of the South African Mine Health and Safety Act
(Act 29 of 1996) ("Section 54 stoppages"). As a result, Anooraq is focusing on
managing safety proactively through an internal safety audit programme and the
execution of the Rethusanang training programme.
Production
Mining activities delivered a mixed performance with tonnes produced decreasing
by 9% quarter-on-quarter to 258,033 tonnes, mainly as a result of Section 54
stoppages. Development rates dropped by 22% as a result of infrastructural
development around the main stations and the impact of Section 54 stoppages.
However, tonnes milled increased by 10% during the quarter to 278,242 tonnes,
with head grade and recovered grade rising by 6% to 4.41g/t 4E and 4% to 4.17g/t
4E respectively. Metal production during the quarter increased by 7% to 30,776
4E ounces (Q3 2010: 28,868 4E ounces).The steady production rate across the
quarter reflects the operational stability achieved at the concentrator post the
automation transition in September 2010. An adjustment was made to the ore
stockpile assessment during the quarter, resulting in a write down of CAD$3.8
million (ZAR26 million), which had a negative impact on operating costs and
operating profit during the fourth quarter.
A summary of the metal produced at Bokoni for the quarter is as follows:
Metal Q3 2010 Q4 2010 Variance
production production
Platinum (oz) 15,742 17,050 8%
Palladium (oz) 10,411 10,905 5%
Rhodium (oz) 1,685 1,679 -
Gold (oz) 1,030 1,142 11%
Nickel (t) 219 264 21%
Copper (t) 131 164 25%
The year-on-year comparison is as follows:
Metal FY 2009 FY 2010 Variance
production production
Platinum (oz) 61,807 63,141 2%
Palladium (oz) 43,713 42,180 (4%)
Rhodium (oz) 7,169 6,752 (6%)
Gold (oz) 3,897 4,091 5%
Nickel (t) 838 898 7%
Copper (t) 499 543 9%
Production has remained steady across the financial year, with an 11% increase
in tonnes milled to 1,044,085 tonnes (2009: 943,403 tonnes). This was tempered
by a 4% decrease in recovered grades as a result of the concentrator automation
transition completed during the year and accompanying processing downtime which
had a negative impact on recoveries.
FY2009 FY2010 Variance
Tonnes milled tonnes 943,403 1,044,084 11%
Head grade (grade g/t, 4E* 4.26 4.18 (2%)
delivered)
Recovered grade g/t 4.31 4.12 (4%)
milled,
4E*
4E oz produced** oz 116,586 116,164 -%
The Company`s primary development focus remains to create mining flexibility, as
evidenced through the deployment of dedicated re- and sub-development, and
equipping crews. The mine`s improved mining layouts are mostly complete and the
new TM3 equipment is now on site which will improve vehicle availability and
efficiencies at our trackless operations. This dedicated development focus at
the operations, employed during the past year, should yield better operational
results for Bokoni moving into the second half of 2011, once the effects of such
development efforts to generate additional immediately mineable stopes (IMS)
take full effect.
Costs
Total on mine operating costs quarter-on-quarter (including treatment charges)
rose 2% to ZAR1,058/tonne, however stripping out the stockpile associated cost
writeback provides a closer-to-target ZAR964/tonne operating cost figure. The
per ounce operating costs rose 6% and 12% respectively to ZAR9,566/4E oz
(US$1,386/4E oz), reinforcing ZAR strength through the quarter.
Revenue
Revenue increased by 25% quarter-on-quarter to C$43,244 (22% in ZAR terms to
ZAR296,177) in Q4, reflecting the higher basket price despite a stronger rand.
The US$/PGM 4E ounce price increased by 13% during the quarter to US$1,357,
while the ZAR/US$ exchange rate strengthened by 6%.
Revenue for the 2010 financial year rose to C$148,287, reflecting the 43%
increase in the US$/PGM 4E ounce basket price over the period to US$1,257. The
ZAR strengthened some 13% against the US dollar over the period, therefore
limiting the impact of the rising ZAR basket price.
Profitability
Bokoni mines returned an operating profit in the quarter, however the loss after
tax on a consolidated level increased by 15% to C$32,401 (ZAR223,733).The higher
loss after tax is due to an increase in interest expenses as a result of
additional facility draw downs to fund Bokoni`s capital expansion programme and
a prior year deferred tax adjustment on mineral rights.
Capital expenditure, cash and facilities
Bokoni remains in a high capital growth expansion phase through to 2014 with
project expansions continuing at the Brakfontein Merensky and Middelpunt Hill
UG2 shaft operations. Capital expenditure for the quarter was C$11 million
(ZAR74.5 million), with drawn facilities amounting to C$57.2 million (ZAR378.5
million) and available facilities as at December 31 of C$56.1 million (ZAR371.5
million).
Results presentation: conference call details
Philip Kotze, President and CEO of Anooraq, will host a conference call to
discuss the Company`s operational and financial results for the quarter ended
December 31, 2010 at 10:00 Eastern Standard Time ("EST") (16:00 Central African
Time ("CAT")) on Thursday, March 24, 2010. The dial-in details for the
conference call are listed below. A playback will be available for three days
after the call on this website. The presentation to be used during the call will
be available for downloading on the Company`s website at 09:45 EST (15:45 CAT)
on Thursday, March 24, 2010.
Conference call
Johannesburg, 16:00 (local Toll +27 11 535 3600
South Africa time)
Toll-free +27 800 200 648
London, United 14:00 (local Toll-free +44 800 917
Kingdom time) 7042
New York, United 10:00 (local Toll +1 412 858 4600
States time)
Toll-free +1 800 860 2442
Toronto, Canada 10:00 (local Toll-free +1 866 605 3852
time)
Playback facility
SA and other Code 2159# Toll +27 11 305 2030
United Kingdom Code 2159# Toll-free +44 808 234
6771
United States & Code 2159# Toll +1 412 317 0088
Canada
For and on behalf of the Board
Philip Kotze, President and Chief Executive Officer
De Wet Schutte: Chief Financial Officer
For further information on Anooraq and its South African properties, please
visit our website or call investor services in South Africa on +27 11 883 0831
or in North America on +1 800 667 2114.
Johannesburg
24 March 2011
MACQUARIE FIRST SOUTH ADVISERS (PTY) LIMITED
JSE Sponsor
Anooraq Resources Corporation
Philip Kotze
President and Chief Executive Officer
Office: +27 11 779 6800
Mobile: +27 83 453 0544
Joel Kesler
Executive: Corporate 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
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 40-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: 24/03/2011 15:02:01 Produced by the JSE SENS Department.
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