| Tue 8 Feb 2005, 11:05 | | Report For The Six Months Ended 31 December 2004 |
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AQUARIUS PLATINUM LIMITED - - HALF YEARLY RESULTS
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration number: EC26290
Share code on JSE: AQP ISIN: BMG0440M1029
Share code on ASX: AQP.AX ISIN: BMG0440M1029
Share code on LSE: AQP.L ISIN: BMG0440M1029
Share code on US Over the counter market: AQPTY ISIN: US03840M2089
(`Aquarius`)
HALF YEARLY RESULTS: 31 DECEMBER 2004
NET PROFIT OF $6 MILLION AND INTERIM DIVIDEND DECLARED AT 3 US CENTS PER SHARE
Highlights of the half year:
Operational
* Mine production improved 7.5% to 245,716 PGM ounces (Aquarius attributable
production declined to 145,714 PGM ounces due to the impact of the P&SA)
* Kroondal Mine record production at 139,009 PGM ounces (Aquarius attributable
69,504 PGM ounces)
* Kroondal P&SA makes substantial progress and ahead of schedule
* Marikana Mine performance inhibited by excessive overburden removal,
oxidised zones in orebody and poor reefing performance by mining contractor.
Production declined to 45,713 PGM ounces
* Mimosa Mine maintains consistent production levels at 60,994 PGM ounces
(Aquarius attributable 30,497 PGM ounces)
Financial
* Revenues increased 1% to $98.8 million, despite lower attributable
production but offset by 20% increase in PGM basket price and includes $4.1
million on disposal of 2% of AQPSA (Note : The impact of the P&SA makes
previous corresponding period comparisons difficult)
* Working costs rose in both South Africa and Zimbabwe due to inflation and
appreciating currencies impact on $ reporting
* Net profit after tax `cash basis` at $17.2 million
* Accounting profit (to IAS) at $6.0 million (7.25 cents per share) after
amortisation and depreciation of $11.2 million
* Profit from operations was $2.9 million and profit on sale of 2% of AQPSA
equity to Impala Platinum Holdings Ltd was $3.1 million (pursuant to BEE
transaction)
* Consolidated cash balances at $137 million. Cash/debt offset agreement
entered into with Investec/ABSA, with outstanding Investec / ABSA debt balance
reduced by R250 million to R112 million, term debt facility remains intact
* Interim dividend declared at a maintained 3 US cents per share
Strategic
* BEE entry into AQPSA completed, R860 million subscription paid during
October 2004
* Mine licence conversions in South Africa lodged with Department of Minerals
and Energy
* Aquarius first foreign company to secondary list on JSE under new foreign
exchange control dispensation
Projects
Pooling and Sharing Agreement
* Hot commissioning to start in March 2005, with first production in May,
ahead of schedule
* Underground tonnage build-up progressing ahead of plan
* A 600,000 ton ore stockpile anticipated to be built up ahead of new
concentrator start-up
* Construction of 4th decline shaft commenced in January 2005
Chromite Tailings Retreatment Project
* Construction completed in December with first concentrate shipped in January
2005
* Low cost innovative new ounces, while furthering sound environmental
practices
Everest
* Project commenced construction during October 2004 with anticipated
commissioning in December 2005
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said, `The
first six months of the financial year are characterised by the success of the
Kroondal operation, ongoing achievement at Mimosa, and a disappointing
performance at Marikana. Kroondal has lifted to a new level and the P&SA is
poised to deliver 3 months early. Mimosa has become a proven performer despite
the economic challenges faced by its management in Zimbabwe. The uncertainty
created by the foreign currency initiatives in Zimbabwe did damage sentiment
towards the company but mine management continues to engage the Zimbabwean
authorities and I am sure a satisfactory outcome will prevail in respect of
foreign currency management.
Undoubtedly, the highlight for the period has been the successful execution of
the BEE transaction with the Savannah Consortium. The transaction is proof
that great BEE deals can be done without damaging shareholder interests. The
cash raised is being put to good use to build the Everest Mine, which started
construction in October. Everest is, however, only one of our projects. The
P&SA at Kroondal is progressing very well with mine and plant some three
months ahead of schedule and hot commissioning anticipated in March 2005. The
Chromite Ore Tailings Retreatment operation completed construction in December
and delivered its first concentrate in January 2005.
While our production profile is entering a new phase and offers excellent
growth from a broader range of assets, the new projects also demonstrate our
innovative approach to common-sense deal making. It is in this manner, with
our BEE partners, that we will continue to look for opportunities to grow
Aquarius even further`.
Financial results 31 December 2004
Aquarius announces consolidated earnings for the half year to 31 December 2004
of $6.0 million (7.25 cents per share). Comparisons with the previous
corresponding period 2003 are not meaningful due to the impact of the P&SA.
Profit on a `cash basis` was $17.2 million.
The Directors have declared an interim dividend of 3 cents per share (2003: 3
cents per share) payable on 23 March 2005 to shareholders registered on 2
March 2005.
Revenue (PGM sales, interest, plus asset disposal) for the half year to
December 2004, was up 1% to $98.8 million.
Depreciation increased from $6.5 million to $8.6 million. This increase is due
to capital expenditure on the respective development and expansions at
Kroondal, Marikana and Mimosa plus accelerated write off of the life of mine
of the Marikana open pit. Amortisation arising from the fair value uplift
remained constant at $2.6 million. Net finance charges for the period were
$2.8 million, comprising $3.4 million in interest income and $6.2 million
interest expense.
Net profit for the period of $6 million, included a profit from operations of
$2.9 million and profit of $3.1 million on the sale of 2% of AQPSA equity
following the BEE transaction to Impala Platinum Holdings Limited.
The Group`s operating mines (with the exception of Marikana which operated at
a loss) performed well during the period under difficult economic conditions
which saw the Rand strengthening further against the $. The Mimosa result was
impacted by an exchange rate mechanism introduced by the Reserve Bank of
Zimbabwe that did not reflect the hyper-inflationary conditions in the
country. This caused operating costs to be affected adversely. Although
operating conditions in Zimbabwe remain challenging, the company continues to
operate successfully. In December 2004, the government of Zimbabwe announced a
welcomed reduction in the company tax rate to 15% from 20%.
Cash costs at Kroondal for the half year were R2,323 per PGM ounce. These
costs include additional costs that were attributable to the development of
the P&SA. On an adjusted basis (after allowing for the change in amortisation
policy announced a year ago, and P&SA developments costs) cash costs for the
half year ended December 2004 were R1,819 per PGM ounce, a credible 5%
increase compared to the 6 months ended December 2003.
The table below outlines reconciles these costs.
6 6 Variance
months months
Dec Dec
2004 2003
Cash costs R2,323 R1,727 (R596)
Impact of change in (R197) - R197
amortisation policy
P&SA decline development (R267) - R267
Grade dilution due to decline (R40) - (R40)
development
Cash costs after adjustments R1,819 R1,727 (R92)
Construction of the new 250,000 tons per month P&SA concentrator is on
schedule to hot commission by March 2005. On completion of the new
concentrator, Kroondal will produce approximately 505,000 PGM ounces per
annum, of which Aquarius` share will be 50%.
Marikana has underperformed during the half year and was impacted by the
incidence of internal waste diluting the head grade, the impact of more
oxidised ore on recoveries and a greater overburden strip than anticipated.
Poor contractor performance on extracting the reef tons attributable to the
overburden stripped has been a significant issue. Consequently, grades and
recoveries were adversely affected contributing to the lower than expected PGM
ounces produced during the half year of 45,713 PGM ounces and high cash costs
PGM ounce of R4,699. The result is disappointing and has eroded what was a
positive contribution from our other operations. An encouraging yet modest
cash break-even in December 2004 shows signs of a sustainable improvement at
Marikana, and a cash profit is envisaged to continue for the rest of the
financial year at current Rand: $ exchange rates and metal prices.
Production
Total mine production increased 7.5% to 245,716 PGM ounces. Attributable group
production for the half year was 145,714 PGM ounces. It is forecast that the
production profile will continue to increase, though at a higher rate, as new
production from the Kroondal P&SA, the Chromite Tailings Retreatment
operation, and improvements at the Marikana impact total production in the
coming months.
IncIuding the impact of the P&SA, the production for this half year was 16,881
PGM ounces ahead (245,716 PGM ounces to December 2004 compared to 228,835 PGM
ounces to December 2003).
Production by Mine and Production by Mine attributable to Aquarius
PGMs (4E) Production By Mine Production attributable
to Aquarius
Half Year Half Year Half Year Half Year
ended Dec ended Dec ended Dec ended Dec
2004 2003 2004 2003
Kroondal 139,009 117,764 69,504 100,200
Marikana 45,713 49,109 45,713 49,109
Mimosa 60,994 61,962 30,497 30,981
Total 245,716 228,835 145,714 180,290
Foreign Exchange
The Rand appreciated 10% against the US Dollar over the 6 months to December
2004 ending at R5.62 per $. Encouragingly the exchange rate has marginally
depreciated into 2005 with renewed dollar strength, concurrent with a
continued strengthening of the PGM basket price.
Platinum Group Metal Prices
The prices for our commodities showed healthy gains over the period, with
average PGM basket price (platinum, palladium, rhodium and gold) increasing
20% to $651 per PGM ounce compared to the half year to December 2003. The PGM
basket price has continued to strengthen further, as strong underlying demand
for platinum in both autocatalysts and jewellery suggests that the supply
deficit will continue as new operations fail to come on stream under a strong
Rand Dollar environment. PGMs unlike gold are influenced less by the $, and
behave more inline with underlying demand for which the outlook continues to
be robust.
At Mimosa operation, where palladium is a more significant component of the
basket, the basket price averaged $580 per PGM ounce, a 16% increase over the
half year to December 2003. The mine continued to benefit from increasing by-
product credit prices for nickel, copper and cobalt.
Financials
Aquarius Platinum Limited
Consolidated Income Statement
For the Half Year ended 31 December 2004
$`000
Audit reviewed
Half Year Ended Year
Ended
31/12/04 31/12/03 30/6/04
Note:
Revenue (i) 98,762 97,518 194,850
Foreign exchange loss on sales (ii) (1,694) (7,430) (2,975)
Cost of sales (iii) (83,088) (62,816) (125,420)
Gross profit 13,980 27,272 66,455
Amortisation of fair value uplift (iv) (2,599) (2,703) (4,951)
of mineral properties
Gross profit after amortisation 11,381 24,569 61,504
of fair value uplift
Admin & operating costs (v) (3,389) (3,410) (8,619)
Finance costs (vi) (6,185) (4,847) (10,661)
Foreign exchange gains/(losses) (vii) 2,395 3,250 (3,094)
Profit before tax 4,202 19,562 39,130
Income tax expense (viii) 1,113 (3,811) (5,674)
Profit after tax 5,315 15,751 33,456
Minority interest (ix) 687 (1,271) (4,752)
Net profit 6,002 14,480 28,704
Earnings per share (basic - 7.25 17.9 35.08
cents)
Notes on the Consolidated Income Statement
(i) Sales revenue in line with previous period, despite lower attributable
production, offset by 20% increase in PGM basket price and includes $4.1
million on disposal of 2% of AQPSA
(ii) Reflects effects of adjusting revenue recorded at time of production at
Kroondal and Marikana to cash received at the end of the four month
pipeline
(iii) Cost of sales are higher due to appreciating Rand, up 13% compared to
the previous corresponding period, December 2003, and increased costs
incurred at the Marikana mine and a static Zimbabwe dollar - despite
hyper inflationary conditions in Zimbabwe
(iv) Relates to amortisation of purchased goodwill associated with the
Kroondal, Marikana and Mimosa mines
(v) Relates to administration costs of the Aquarius Group
(vi) Finance costs were higher due to short term loans to fund Mimosa`s
working capital
(vii) Reflects foreign exchange movements on net monetary assets
(viii)Income tax expense for the period includes tax credit attributable to
reduction in tax rate in Zimbabwe from 20% to 15%
(ix) Minority interests reflect 49.5% outside equity interest of Impala
Platinum Holdings Limited (Implats) and the Savannah Consortium (SavCon)
in AQPSA
Aquarius Platinum Limited
Consolidated Cash Flow Statement
Half year ended 31 December 2004 $`000
Audit Reviewed
Half year ended Year ended
31/12/04 31/12/03 30/06/04
Note:
Net operating cash inflow (i) 9,878 31,827 54,365
Net investing cash outflow (ii) (36,847) (10,761) (10,380)
Net financing cash outflow (iii) 76,445 16,814 15,786
Net increase in cash held 49,476 37,880 59,771
Opening cash balance 77,942 16,996 16,996
Exchange rate movement on (iv) 9,132 182 1,175
cash
Closing cash balance 136,550 55,058 77,942
Notes on the December `04 Consolidated Cash Flow Statement
(i) Net operating cash flow includes $77.4 million inflow from operations
and $2.2 million net finance costs
(ii) Reflects payments for mine development and development costs $40.8
million less net proceeds on sale of investment to SavCon of $4.0
million
(iii) Reflects proceeds from issue of shares by AQPSA $33.52 million,
proceeds from SavCon shareholder loan 97.4 million, debt offset of
Investec/ABSA facility of $53.2 million, proceeds from repayment of
share plan loans $1.1 million and payment of dividends of $2.5 million
(iv) Reflects impact of a strengthening Rand against the US dollar for the
period
Aquarius Platinum Limited
Consolidated Balance Sheet
At 31 December 2004 $`000
Audit Reviewed
Half year ended Year ended
Note: 31/12/04 31/12/03 30/06/04
Assets
Cash assets 136,746 55,058 77,942
Current receivables (i) 34,162 29,765 23,262
Other current assets (ii) 20,192 10,371 10,736
Non-current receivables (iii) 3,728 4,691 4,627
Mining assets (iv) 409,619 327,267 356,641
Other non-current assets 512 21 18
Total assets 604,959 427,173 473,226
Liabilities
Current liabilities (v) 58,821 37,650 41,766
Non-current payables (vi) 176,697 56,224 59,600
Non-current interest-bearing (vii) 18,519 63,859 62,716
liabilities
Other non-current liabilities (viii) 82,584 55,623 74,947
Total Liabilities 336,621 213,356 239,029
Net assets/(liabilities) 268,338 213,817 234,197
Equity
Parent entity interest 233,907 208,494 224,975
Minority interest 34,431 5,323 9,222
Total Equity 268,338 213,817 234,197
Notes on the December 04 Consolidated Balance Sheet
(i) Increase relates to net movement in trade debtors and pipeline finance.
(ii) Relates to ore stockpiles, consumables and PGM concentrate inventory,
increase related to ore stockpile build-up prior to commissioning of new
PSA plant.
(iii) Reduction reflects Aquarius share plan loans repaid
(iv) Increase in mining assets relates to costs of new Kroondal PSA plant,
development costs of Everest and foreign exchanges variances on Rand
mining assets
(v) Includes current portion of Investec loan ($20.4 million), tax payable
($9.2 million) and creditors ($29.2 million). Balances include impact of
the R250 million debt offset against the Investec/ABSA facility.
(vi) Includes deferred sale amount on BEE transaction ($11.5 million) and
long-term non-interest bearing shareholder debt in AQPSA owing to SavCon
($73.9 million) and Impala (91.3 million)
(vii) Relates long term interest bearing shareholder loans in AQPSA of $18.0
million and other loans of $0.5 million.
(v111)Reflects deferred tax liabilities $57.5 million, provision for closure
costs $25.1 million
On Mine Financial Performance
Kroondal Marikana Mimosa 50%
PGM ounces (attributable) 69,504 45,713 30,497
Revenue (net of FX variance on 40,860 25,907 22,705
sales)
Cash costs (25,466) (32,754) (10,765)
Gross margin 15,394 (6,847) 11,940
Administration (1,503) (1,622) (2,359)
Foreign currency gain/(loss) (233) (445) 898
EBITDA 13,658 (8,914) 10,479
Amortisation (3,644) (6,435) (1,092)
Finance charges 278 (2,417) (2,328)
Profit/(loss) before tax 10,292 (17,766) 7,059
Tax Expense (1,355) 2,766 (297)
Profit/(loss) before tax 8,937 (15,000) 6,762
Operations
Kroondal Platinum Mine
Safety
The DIIR recorded a good improvement to 0.66 for the half year. Regrettably a
fatal accident occurred at the mine on 20 November 2004 when a LHD operator
sustained an injury to the head. The circumstances leading up to the accident
are unclear and the matter is under investigation by inspectors of the
Department of Minerals and Energy.
Processing
* 1,595,000 ROM tons hoisted from underground with a further 151,000 tons of
opencast
* 139,009 PGM ounces produced (Aquarius attributable 69,504 PGM ounces)
* Closing surface stockpile at quarter end (ahead of the Christmas and New
Year holidays) at 503,000 tons
Operations
PGM production improved by 18% to 139,009 PGM ounces for the half year to
December 2004.
The PGM basket price increased to $686 per PGM ounce, with this improvement in
$ price offset by a strengthening of the Rand : $ average exchange rate.
The increased face length derived as a result of being able to develop down
dip as part of the PSA project has had a marked positive effect on production.
1,746,000 ROM tons were processed at a slightly lower head grade of 3.09 g/t.
This achievement was commendable as the plant did not operate for a period in
order to undertake a rod mill reline and a replacement of a failed ball mill
bearing. Concentrator plant recoveries also improved to a record 80.35% in the
December month.
Cash costs at Kroondal for the half year were R2,323 per PGM ounce. These
costs include additional costs that were attributable to the development of
the P&SA, On an adjusted basis (after allowing for the change in amortisation
policy announced a year ago, and P&SA developments costs) cash costs for the
half year ended December 2004 were R1,819 per PGM ounce, a credible 5%
increase compared to the 6 months ended December 2003.
P&SA development at Kroondal
The P&SA expansion program is set to commission in the coming quarter. At
steady state production, the new concentrator is targeted to produce 250,000
PGM ounces per annum, effectively doubling the Kroondal Mine`s annual output
to 505,000 PGM ounces per annum. Expansion of the underground mine at the
Central, East and No 3 shafts progressed well through the period. A total of
1,020 meters of down-dip development has now been completed. The underground
mine is currently producing over 350,000 tons per month which places the build-
up approximately 5 months ahead of project plan.
Cold commissioning of the new concentrator will start in January 2005 with hot
commissioning planned from March 2005, 3 months ahead of schedule. A stockpile
of over 600,000 tons is anticipated to be available for plant commissioning.
First ounces from the new plant are expected during the final quarter (April
to June 2005) of this financial year.
The P&SA project`s capital expenditure commitments to 31 December 2004 were
R548 million with capital expenditure paid to date of R405 million. AQPSA`s
share of these commitments and expenditure is 50% of these amounts.
Marikana Platinum Mine
Safety
The DIIR for the half year was 0.75 for the period, ensuring that the mine
retained the coveted NOSA 4 Star Platinum status.
Mining
Improved stripping ratio during the quarter has had a positive impact on costs
Second contractor introduced to supplement shortfall in contribution from
Moolman Bros
Processing
* 764,000 tons processed during the period
* Concentrator plant recoveries at 50%
* 45,713 PGM ounces produced
Operations
PGM production improved towards the end of the half year, despite fewer tons
being processed. The improvements in the second quarter are the result of
improved recoveries as deeper more competent ore was accessed in certain parts
of the pit. Reflecting the access to competent ore, plant recoveries for the
period were 50%.
As a result of a lower stripping ratio and higher recovery levels cash costs
per PGM ounce also improved towards the end of the period, with the quarter to
December 2004 reporting a reduction of 18% to R4,248 compared to the previous
quarter. This improvement is encouraging and has resulted in the mine breaking
even in cash terms for the month of December. Further efficiencies will be
achieved through the continuing implementation of the revised mining plan,
whereby reduced tonnage at an improved head grade is anticipated in the final
half of the financial year.
The Marikana PGM basket price increased marginally to $688 per PGM ounce.
Outlook
While Aquarius is implementing the revised mining plan, discussions are being
held with owners of adjacent mineral rights with a view to cooperation `across
farm boundaries`.
Trial underground mining will commence in the current quarter. It is expected
that underground mining will lead to a reduction in unit cash costs and create
more flexibility for the exploitation of the ore body.
Contractor dispute with Moolman Brothers
The arbitration date for the dispute relating to the Rise and Fall (foreign
currency denominated) component of the mining contract has been set for April
2005.
Mimosa Mine (Aquarius 50%)
Safety
The mine recorded a significant improvement in safety performance. During the
half year the DIFR was 0.4. The financial year to date DIFR stands at 0.40 and
the rolling 12 months DIFR at 0.49.
Operations
Mining operating days were reduced by six in December as the monthly reporting
date was brought forward from 28 to 22 December to accord with AQPSA. In
addition, three operating days were lost to illegal industrial action called
by the trade union organisation. Despite the loss of nine days, PGM production
for the 6 months was stable at 60,994 PGM ounces, similar to the previous
corresponding half year, December 2003, production of 61,962 PGM ounces,
reflecting an improvement in productivity. Mining operations hoisted a total
of 656,000 ROM tons.
The Mimosa PGM basket price reported a steady increase to $588 per PGM ounce,
aided by buoyant base metals prices.
The Government of Zimbabwe announced a reduction in the rate of company tax
for mining companies from 20% to 15% backdated to January 2004. This
development is most welcome.
Operating Costs
Exchange rates achieved were at the Reserve Bank of Zimbabwe (RBZ) auction
floor rates which averaged Z$5,900 per $. This level of exchange rate has not
compensated for the inflation rate impact on operating costs at mine level.
Consequently unit cash costs per PGM ounce for the period increased to $319
(or $105 per PGM ounce after by-product credits). The 15% FOB incentive
granted by the RBZ was offset against operating costs as per normal practice.
The expansion project was completed at a capital cost of $41 million.
Industrial Relations
Three operating days were lost to illegal industrial action called by the
trade union to obtain concessions during national wage negotiations conducted
by the Chamber of Mines. The combined effects of a harsh socio-economic
environment and an approaching parliamentary election will make managing the
industrial relations environment in current quarter somewhat difficult.
PGM Sector Reforms
The Government of Zimbabwe, through the RBZ, has accorded the PGM sector a
special status in order to stimulate growth of the Zimbabwe platinum industry
and enhance Government`s understanding of the sector. Mimosa management has
been encouraged by its discussions with the RBZ to achieve a `win-win
situation` with respect to the management of foreign currency flows. A
successful outcome of these discussions will lead to an evaluation of further
growth opportunities on the mine.
Chromite Ore Tailings Retreatment Operation (ASACS 50%)
Safety
No accidents were reported during the period.
Project Development
Construction of the plant was completed in December 2004. Cold commissioning
commenced during the first week in December and hot commissioning commenced
17th December 2004. First concentrate was delivered to the smelter on 21st
January 2005.
Everest Project
Progress
Construction of Everest started in October 2004, following the receipt of
funds from the BEE transaction. The capital budget is R819 million including a
R33 million allowance for escalation. Everest will mine and process 3 million
tons per annum of UG2 ore to produce 225,000 ounces of PGMs per annum at
steady state. Commissioning is anticipated in December 2005, with full
production to be attained in 2006. Everest , with a UG2 reserve of 26.79
million tonnes at 3.36 g/t (4E) containing 2.8 million ounces of PGMs, is the
company`s third mining operation in South Africa.
Dowding Reynard and Associates (DRA), who managed the construction of the
Kroondal, Marikana, and P&SA concentrators, have been appointed to execute the
Everest project. Preparatory engineering work undertaken throughout 2004 has
allowed the project to be rapidly mobilised, with earthworks starting within
the week following funds receipt. Construction activities during the period
focused on the process plant platform, excavation of the portal for the
underground mining decline and general infrastructure. Engineering, design and
procurement activities are proceeding in parallel and project execution is on
track for hot commissioning during December 2005.
Both opencast and underground mining contractors were appointed during the
period. The opencast mining contractor, MCC, will start mining activities
during the first quarter of 2005. Shaft Sinkers, the underground contractor,
will start the development of the decline during the second quarter of 2005.
AQPSA mining personnel from the Kroondal Mine were seconded to Everest to
enable a transfer of knowledge and skills, and will be transferred to site
during the next reporting period to manage the mining operations.
The identification and implementation of Social Upliftment and Sustainable
Livelihood projects is ongoing. Contractor recruitment of local labour is
coordinated with the Department of Labour in Lydenburg, and has proved
effective with sixty local people employed during the period. The Adult Basic
Education and Training (ABET) facility, where community members attend twice-
weekly classes, is ongoing and a project to supply water to the local primary
school was initiated during the period. Projects which will be initiated
during the next period include a day care centre, the removal of alien plants,
a nutritional feeding scheme and a catering project.
The transfer of land title to the local Phetla community under a settlement
reached with the land restitution authorities continues. Under the terms of
the agreement land required for the mine to operate will be leased back to
AQPSA.
Corporate
Board of directors
Subsequent to the half year end, Mr Zwelakhe Sisulu was appointed to the Board
of the Company on 4th February 2005. Mr Sisulu brings considerable experience
with regard to the operating environment in Southern Africa.
Black Economic Empowerment (BEE)
The BEE transaction announced to shareholders on 26th July 2004 and approved
by shareholders in Special General Meeting on 11th October 2004 was formally
concluded with the receipt of R860 million in cash by the Aquarius Group on
the 29th October 2004.
The transaction has two key components, the first of which is now completed.
This saw the BEE consortium, led by Savannah Resources (Pty) Limited,
subscribe for a 29.5% shareholding in the enlarged share capital of AQPSA.
Concurrently Impala Platinum Holdings Limited (Impala) acquired an additional
holding in AQPSA from Aquarius to increase their shareholding to 20% in AQPSA
following the dilution resulting from the issue of the new shares in AQPSA to
the BEE consortium. At this time, the shareholdings in AQPSA are as follows:
* 50.5% interest by AQP;
* 29.5% by the Savannah consortium; and
* 20% held by Impala.
The consideration paid by Impala amounted to R71.5 million, which was settled
by the cession of R71.5 million of interest bearing loan account to Aquarius.
At the time of the BEE transaction, AQPSA had an interest bearing loan of over
R93 million (both principal and accumulated interest) to Impala. Following
cession of R71.5 million of the loan to Aquarius, AQPSA settled the
outstanding balance of the loan in cash.
The final component of the transaction will in time and subject to the
conditions detailed in the notice of meeting to shareholders of 17th September
2004, see the Savannah consortium`s 29.5% holding in AQPSA be exchanged for
24,599,542 new Aquarius shares. Following this exchange, Aquarius will hold
80% of AQPSA and Savannah consortium constituent members will hold
approximately 23% of the enlarged share capital of Aquarius.
JSE Securities Exchange South Africa
Under revised exchange control regulations announced by South African Finance
Minister, the Honourable Trevor Manuel in February 2004, Aquarius became the
first foreign company to list its shares on the JSE. Listing on 8 December
2004, to fulfil the company`s obligations to its empowerment partners, trade
has been light to date. Steps to improve liquidity are in progress.
Cash balances and Interest bearing debt facilities
Aquarius Group consolidated cash balances at 31 December 2004 were $137
million, after the reduction in debt at AQPSA by R250 million in terms of an
offset arrangement with Investec / ABSA.
In December, AQPSA signed an agreement with Investec / ABSA to create an
innovative cash balance management offset mechanism in respect of its existing
term debt facility. AQPSA is permitted to deposit its cash (up to the
outstanding balance of the debt facility) in order to reduce its interest
expense for the period that the cash is on deposit with the banks. An amount
of R250 million has been placed on deposit with the banks, thereby reducing
the Investec/ABSA debt balance to R112 million. Funds will be re-advanced by
the banks, without limitation at AQPSA`s request, up to the limits of the
original facility. These funds are anticipated to remain on deposit until the
end of the calendar year.
STATISTICAL INFORMATION:
Kroondal Marikana Mimosa
Unit 6 months 6 months 6 months 6 months 6 months 6 months
December December December December December December
2004 2003 2004 2003 2004 2003
Safety
DIIR Rate/20 0.66 1.52 0.75 0.69 0.40 0.45
0,000
man
hours
Revenue Million 521 412 165 182 40 34
Gross s
revenue
PGM basket $/oz 686 550 688 579 580 502
Price
Gross cash 38 50 (30) 2 62 70
margin
Nickel $/lb 6.37 4.94 6.36 4.94 6.11 5.31
Price
Copper USCents 1.35 0.86 1.35 0.86 1.08 0.80
Price (USD)/l
b
Ave R/$ 6.23 7.05 6.23 7.05 - -
rate
Cash Costs
Per ROM R/ton 185 133 281 230 - -
ton
$/ton 30 19 45 33 29 19
Per PGM R/oz 2,323 1,727 4,699 3,631 - -
ounce
$/oz 373 245 755 515 319 202
Per PGM R/oz 2,231 1,654 4,588 3,582 - -
ounce
after by-
product
credit
$/oz 357 235 737 508 105 20
Capital
expenditur
e
Current R 1,497 25,260 7,148 3,228 9,154 4,195
100% ``000s
$ ` 236 3,586 1,148 458 - -
000s
Expansion R 313,347 - - 15,826 6,56 3,212
100% ``000s
$ ` 50,593 - - 2,245 - -
000s
Mining
Processed
Undergroun ROM ton 1,595 1,379 - - 656 665
d ``000
Open Pit ROM ton 151 152 764 774 - -
``000
Total ROM ton 1,746 1,531 764 774 656 665
``000
Grade
Plant Head g/t 3.09 3.14 3.75 3.77 3.66 3.75
Recoveries % 80% 75% 50% 52% 76.9 76.0
PGM
Production
Platinum Ozs 83,048 71,402 29,745 32,233 31,284 32,123
Palladium Ozs 40,286 33,637 12,253 13,029 23,076 23,174
Rhodium Ozs 15,008 12,198 3,309 3,421 2,408 2,568
Gold Ozs 667 527 406 426 4,226 4,097
Total Ozs 139,009 117,764 45,713 49,109 60.994 61,962
Base
Metals
Production
Nickel Tons 130 98 49 50 891 883
Copper Tons 57 46 26 29 736 734
Chromite Tons 119 145 124 10 26 27
(000) (000)
Data reflects 100% of operations.
8 February 2005
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 (appointed 31 March 2004)
Edward Haslam Non-executive (appointed 1 May 2004)
Catherine Markus Non-executive
Sir William Purves Non-executive (appointed 10 February 2004)
Patrick Quirk Non-executive
Zwelakhe Sisulu Non-executive (appointed 4 February 2005)
Audit/Risk Committee
Sir William Purves (Chairman)
David Dix
Edward Haslam
Nicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)
Catherine Markus
Nicholas Sibley
Nomination Committee
The full Board comprises the Nomination Committee
Company Secretary
Willi Boehm
Issued Capital
At 31 December 2004, the Company had on issue:
82,753,892 fully paid common shares
4,027,979 unlisted options
Substantial Shareholders 31 No. of Percentage
December 2004 Shares
Impala Platinum Holdings Ltd 7,141,966 8.63 %
J P Morgan Nominees Australia 5,512,590 6.66 %
Limited
ANZ Nominees Limited 5,222,040 6.31 %
Chase Nominees Limited (FISL) 4,684,626 5.66 %
Broker (LSE)
Numis Securities
Cheapside House
138 Cheapside
London EC2V 6LH
Telephone: +44 20 7776 1500
Facsimile: +44 20 7776 1550
Broker (ASX)
Euroz Securities
Level 14, The Quadrant
1 William Street
Perth WA 6000
Telephone: +61 8 9488 1400
Fax: +61 9488 1478
Sponsor in South Africa (JSE)
Nedbank Capital
135 Rivonia Road
Sandown, Sandton 2196
Telephone: +27 11 294 3601
Aquarius Platinum (South Africa) (Proprietary) Ltd.
50.5% Owned
(Incorporated in the Republic of South Africa)
Registration Number 2000/000341/07
The Great Wall Group Building
Block A, 1st Floor
5 Skeen Boulevard
Bedfordview South Africa 2007
P O Box 1282
Bedfordview South Africa 2009
Telephone: +27 11 455 2050
Facsimile: +27 11 455 2095
Email: info@aquariussa.co.za
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 Western Australia 6151
Telephone: +61 (8) 9367 5211
Facsimile: +61 (8) 9367 5233
Email: info@aquariusplatinum.com
AQPSA Management
Stuart Murray Executive Chairman
Gert Ackerman Managing Director
Ayanda Khumalo Finance Director
Gordon Ramsay Projects Director
Neil Collett General Manager P&SA Project
Gabriel de Wet General Manager Engineering
Graham Ferreira General Manager Finance
Hugo Holl General Manager Everest
Robert Mallinson General Manager Marikana
Hulme Scholes General Manager Commercial
& Legal / Company Secretary
Dave Starley General Manager Kroondal
Mimosa Mine Management
Alex Mhembere Managing Director
Winston Chitando Finance Director
Herbert Mashanyare Technical Director
Peter Chimboza General Manager
Glossary
A$ Australian Dollar
Aquarius Aquarius Platinum Limited
ABET Adult Basic Education Training programme
APS Aquarius Platinum Corporate Services Pty Ltd
AQPSA Aquarius Platinum (South Africa) Pty Ltd
ASACS Aquarius Platinum (SA) (Corporate Services) (Pty) Limited
DIFR Disabling Injury Incidence Rate - being the number of lost 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
EMPR Environmental Management Programme Report
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 (1 g/t = 1 part per
million)
JORC code Australasian code for reporting of Mineral Resources and Ore
Reserves
JSE JSE Securities Exchange South Africa
Kroondal Kroondal Platinum Mine
LHD Load Haul Dump machine
Marikana Marikana Platinum Mine
Mimosa Mimosa Mining Company (Private) Limited
NOSA National Occupational Safety Association
PGE Platinum Group Elements. Six metallic elements
commonly found together which constitute the
platinoids. These are platinum (Pt), palladium
(Pd), rhodium (Rh), ruthenium (Ru), osmium (Os)
and iridium (Ir).
PGE(s) (6E) Platinum Group Elements. Six metallic elements
commonly found together which constitute the
platinoids. These are Pt (platinum), Pd
(palladium), Rh (rhodium), RU (ruthenium), Ir
(Iridium) and Os (osmium)
PGM(s) (4E) Platinum Group Metals. Aquarius reports the
composite grade comprising Pt+Pd+Rh+Au (gold),
the Pt, Pd and Rh being the most
economic platinoids in the UG2 Reef.
P&SA Pooling & Sharing Agreement between KPM and RPM
Ltd
R South African Rand
RK1 Consortium comprising Aquarius Platinum (SA)
(Corporate Services) (Pty) Limited (ASACS), GB
Mining and Exploration (SA) (Pty) Limited (GB)
and Sylvania South Africa (Pty) Ltd (SLVSA).
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.
RPM Rustenburg Platinum Mines Limited
TKO TKO Investment Holdings Limited
Ton 1 Metric tonne (1 000kg)
UG2 Reef A PGE bearing chromite layer within the Critical
Zone of the Bushveld Complex
$ United States Dollars
Z$ Zimbabwe Dollar
Further information please contact:
In Australia:
Willi Boehm
Aquarius Platinum Corporate Services Pty Ltd
+61 (0)8 9367 5211
In United Kingdom:
Nick Bias Alex Buck
Aquarius Platinum Limited Buckbias Limited
+ 44 (0)7887 920 530 +44 7392 740 452
In South Africa:
Stuart Murray Charmane Russell
Aquarius Platinum (South Russell & Associates
Platinum) (Pty) Ltd +27 11 880 3924
+27 (0)11 455 2050
or visit:
www.aquariusplatinum.com
Date: 08/02/2005 12:29:27 PM
Produced by the JSE SENS Department
