| Fri 10 Feb 2006, 12:11 | | Aquarius Platinum Limited - Half Year Results: 31 |
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AQP
AQP
Aquarius Platinum Limited - Half Year Results: 31 December 2005
Aquarius Platinum Limited
(Incorporated In Bermuda)
Registration number: EC26290
Share code on JSE: AQP
ISIN: BMG0440M1029
Share code on ASX: AQP. AXISIN: BMG0440M1029
10 February 2006
HALF YEAR RESULTS: 31 DECEMBER 2005
GROUP NET PROFIT UP 332% PERIOD-ON-PERIOD
NET PROFIT FROM OPERATIONS UP NEAR EIGHT-TIMES PERIOD-ON-PERIOD
INTERIM DIVIDEND DOUBLES TO 6 US CENTS PER SHARE
Highlights of the half year
* Net Profit $25.9 million, cash profit $38.7 million
* Profit achieved from operations up 793% to $25.9 million from $2.9 million
* Interim dividend doubles to 6 US cents per share
* Record half year production
Operational
* On-mine production up 47% to 362,418 PGM ounces (Aquarius attributable
production up 36% to 198,426 PGM ounces)
* P&SA1 at Kroondal expansion delivers a 67% increase in production to 232,537
PGM ounces (Aquarius attributable production 116,269 PGM ounces)
* P&SA2 at Marikana implemented with effect from second quarter start
* Everest Mine commissioned in November 2005, produces 7,111 PGM ounces in
December
* Mimosa Mine production up 18% at 71,762 PGM ounces (Aquarius attributable
production 35,881 PGM ounces)
Financial
* Revenues increased 62% to $159.7 million. Average basket prices increased to
$876 per PGM ounce in South Africa and $637 per PGM ounce in Zimbabwe
* Net profit after tax "cash-basis" up 125% at $38.7 million (48.7 US cents per
share)
* Accounting profit (to IFRS) at $25.9 million (31.5 cents per share) after
deducting amortisation, depreciation fair value uplift of $12.8 million
* All operations contributed to net profit for the half year
* Consolidated cash balances rose by $10 million during period to $85 million
* Debt refinancing facility completed on more favourable terms
Strategic
* `New order" mining rights applications at an advanced stage
* P&SA2 at Marikana implemented to unlock potential at the Marikana mine
* Mimosa expansion (Wedza Phase IV Upgrade) announced and on track to increase
mine production to 168,750 PGM ounces
* MCC appointed as primary open cast mining contractor at Marikana, commencing
operations in January 2006
* Aquarius accepted for inclusion in to the FTSE 250 in December
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said,
"Aquarius has delivered solid results for the half year. A more than threefold
increase in net earnings is a direct result of our unrivalled production growth
and a firm operational performance, at a time of good platinum group metal
prices. The outlook for the remainder of the year is positive, providing the
confidence to increase the interim dividend to 6 US cents per share."
Financial results: Half Year to 31 December 2005
Aquarius Platinum Limited announces consolidated earnings for the half year to
31 December 2005 of $25.9 million (31.5 cents per share). Profit on a "cash-
basis" is $38.7 million.
Revenues from ordinary activities for the period rose 62% to $159.7 million
(comprising sales revenue of $157.5 million and interest and other income of
$2.0 million) from $98.8 million (sales revenue $92.2 million and interest and
other income of $7.6 million).
Costs of production rose by 20% to $88.6 million with an increase in production
of 31% to 191,315 operating PGM ounces (total attributable production of 198,426
PGM ounces less Everest production of 7,111 PGM ounces).
Operating performances at Kroondal and Mimosa were good, resulting in the
majority of profits earned.
Marikana delivered a maiden net profit, despite difficult conditions and poor
contractor performance by Moolman Mining SA, largely on the back of improved
commodity prices and a reduced depreciation and amortisation charge as a result
of the implementation of the P&SA2. The CTRP, despite experiencing problematic
feed stock quality issues, delivered a modest net profit for the period.
Amortisation and depreciation were marginally higher at $9.1 million, up from
$8.6 million, despite a 31% increase in production from operations (excluding
Everest) and includes an additional $0.5 million in depreciation and
amortisation as a result of the adoption of IFRS. The implementation of the
P&SA2 which extended the life of mine at Marikana, resulted in a reduced
depreciation and amortisation charge to the income statement. This together
with rising platinum group metal prices resulted in a modest net profit at this
operation.
Aquarius incurred net finance charges for the period of $0.5 million, comprising
$1.8 million in interest income and $2.3 million interest expense. Interest
incurred as part of the BEE transaction of $1.0 million was capitalised as part
of the Everest construction costs.
Net profits from operations rose from $2.9 million (prior period of $6.0 million
included $3.1 million profit on sale of 2% of AQPSA per the BEE transaction) to
$25.9 million, a 793% increase, following good operating performances at
Kroondal and Mimosa, coupled with rising platinum group metal basket prices in
both South Africa and Zimbabwe.
The Directors have declared an interim dividend of 6 US cents per share (2005: 3
US cents per share) payable on 23 March 2006 to shareholders registered on 2
March 2006.
Aquarius" cash balances of $85 million at 31 December 2005 are expected to
increase progressively in the second half of the year as Group production
increases with additional production from the Everest Mine. This together with
the new RMB facility will provide Aquarius with the requisite funding for any
future growth opportunities and for balance sheet optimisation.
Group Financials by Operation
$ million Kroon Marik Mimos CTRP Evere Corpo Total
dal ana a 50% st* rate
PGM ounces 116,2 37,71 35,88 1,449 7,111 - 198,4
(attributable) 69 6 1 26
Revenue (net of FX 92.6 30.4 31.7 1.2 - 1.5 157.4
sales variance)
Cost of sales (48.7 (29.6 (19.4 (0.9) - - (98.6
) ) ) )
Gross profit 43.9 0.8 12.3 0.3 - 1.5 58.8
Amortisation of (3.2) (0.3) (0.3) - - - (3.8)
fair value
Gross profit after 40.7 0.5 12.0 0.3 - 1.5 55.0
FVU
Corporate admin and - - - - - (2.0) (2.0)
other costs
Foreign currency 0.3 0.9 0.5 - - (0.4) 1.3
gain/(loss)
Finance charges - - - - - (2.3) (2.3)
Profit/(loss) 41.0 1.4 12.5 0.3 - (3.2) 52.0
before tax
Tax Expense - - - - - (12.6 (12.6
) )
Profit/(loss) after 41.0 1.4 12.5 0.3 - (15.8 39.4
tax )
Minority interest - - - - - (13.5 (13.5
) )
Profit/(loss) after 41.0 1.4 12.5 0.3 - (29.3 25.9
minority interest )
*Everest costs were capitalised to 31 December 2005. The mine will be handed
over to operations on 1 January 2006.Mine Operations
On mine financial Kroond Marika Everes Mimosa CTRP
performances: al na t
PGM ounces 116,26 37,716 7,111 35,881 1,449
(attributable) 9
Revenue (net of FX 92.6 30.4 - 31.7 1.2
variance on sales)
($m)
Cash Costs (Rand per 2,459 4,642 3,136 - 3,187
PGM ounce)
Cash costs ($ per PGM 377 712 494 343 501
ounce)
Gross margin 53% 14% 28% 61% 44%
EBITDA ($m) 47.8 4.4 - 13.2 0.4
Production
Total on-mine production increased 47% to 362,418 PGM ounces. Attributable
group production for the half year was 198,426 PGM ounces (including 7.111 PGM
ounces from Everest), an increase of 36% over the previous corresponding period.
The Group"s production profile will continue to increase in the second half as
the Everest Mine continues to ramp-up. Following successful commissioning at
Everest in December 2005, the mine was handed to operations in January 2006.
Production by Mine and Production by Mine attributable to Aquarius
PGMs Production by Mine Production attributable
(3E+Au) to Aquarius
Half Year Half Year Half Year Half Year
ended Dec ended Dec ended Dec ended Dec
2004 2005 2004 2005
Kroondal 139,099 232,537 69,504 116,269
Marikana 45,713 48,111 45,713 37,716*
Mimosa 60,994 71,762 30,497 35,881
CTRP - 2,897 - 1,449
Everest - 7,111 - 7,111
Total 245,806 362,418 145,714 198,426
*P&SA2 at Marikana implemented with effect from second quarter, resulting
attributable production reducing by 10,395 PGM ounces for the period.
Foreign Exchange
The Rand depreciated 4.7% period on period, from an average of R6.23 per dollar
to R6.52 per dollar.
Platinum Group Metal Prices
The prices for platinum group metals showed healthy gains over the period, with
the PGM basket price (platinum, palladium, rhodium and gold) in South African
averaging $872 per PGM ounce across the operations and averaging $637 per PGM
ounce in Zimbabwe. The South African basket price increased 23% over the period
to $966 per PGM ounce at the end of December. The Zimbabwean basket price
increased 20% to $746 per PGM ounce at the end of December.
Financials
Aquarius Platinum Limited
Consolidated Income Statement
For the Half Year ended 31 December 2005
$"000
Audit reviewed
Half Year Ended Year Ended
31/12/ 31/12/04 30/6/05
05
Note
:
Revenue (i) 159,70 98,762 222,327
6
Foreign exchange loss on (ii) (2,297 (1,694) 2,797
sales )
Cost of sales (including (iii (98,55 (83,088) (174,936)
D&A) ) 0)
Gross profit 58,859 13,980 50,188
Amortisation of fair (iv) (3,725 (2,599) (6,745)
value uplift of mineral )
properties
Gross profit after 55,134 11,381 43,443
amortisation of fair
value uplift
Corporate Admin & other (v) (1,983 (3,389) (5,976)
operating costs )
Finance costs (vi) (2,324 (6,185) 484
)
Foreign exchange (vii 1,207 2,395 (9,889)
gains/(losses) )
Profit before tax 52,034 4,202 28,062
Income tax expense (vii (12,58 1,113 (3,446)
i) 1)
Profit after tax 39,453 5,315 24,616
Minority interest (ix) (13,53 687 (3,666)
8)
Net profit 25,915 6,002 20,950
Earnings per share (basic 31.50 7.32 25.32
- cents)
Notes on the Consolidated Income Statement
(i) Sales revenue increase reflects increased PGM production and higher PGM
basket price achieved
(ii) Reflects effects of adjusting revenue recorded at time of production at
Kroondal, Marikana and CTRP to actual receipts received at the end of the four
month pipeline
(iii) Cost of sales rose owing to increased production and increased
depreciation and amortisation
(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 lower owing to repayment of Investec debt and interest
cost (relating to BEE transaction) capitalised of $1.0 million against the
Everest construction
(vii) Reflects foreign exchange movements on net monetary assets
(viii) Income tax expense for the period for AQPSA and Mimosa
(ix) Minority interests reflect 49.5% outside equity interest of the Savannah
Consortium (SavCon) and Impala Platinum Holdings Limited (Implats) in AQPSA
Aquarius Platinum Limited
Consolidated Cash Flow Statement
Half year ended 31 December 2005
$"000
Audit Reviewed
Half year ended Year
ended
31/12/05 31/12/ 30/06/0
04 5
Note
:
Net operating (i) 58,701 9,878 31,458
cash inflow
Net investing (ii) (75,406) (36,84 (88,152
cash outflow 7) )
Net financing (iii 23,496 76,445 54,921
cash outflow )
Net increase in 6,791 49,476 (1,773)
cash held
Opening cash 75,251 77,942 77,942
balance
Exchange rate (iv) 2,912 9,132 (918)
movement on cash
Closing cash 84,954 136,55 75,251
balance 0
Notes on the December "05 Consolidated Cash Flow Statement
(i) Net operating cash flow includes $65 million inflow from operations, income
tax paid $6 million and $0.5 million net finance costs
(ii) Reflects payments for mine development and development costs
(iii) Reflects net proceeds from borrowings $27 million, proceeds of the issue
of shares $0.6 million and payment of dividends of $4.1 million
(iv) Reflects movement of Rand against the US dollar
Aquarius Platinum Limited
Consolidated Balance Sheet
At 31 December 2005
$"000
Audit Reviewed
Half year Year
ended ended
Note 31/12 31/12/0 30/06/
: /05 4 05
Assets
Cash assets 84,95 136,746 75,251
4
Current receivables (i) 46,09 34,162 44,695
8
Other current assets (ii) 22,79 20,192 16,312
8
Property, plant and (iii 145,3 155,289 137,81
equipment ) 35 9
Mining assets (iv) 333,6 254,330 271,05
75 0
Other non-current assets 460 512 437
Total assets 633,3 601,231 545,56
20 4
Liabilities
Current liabilities (v) 37,08 58,821 35,480
9
Non-current payables (vi) 158,1 176,697 150,73
90 5
Non-current interest- (vii 44,04 18,519 16,037
bearing liabilities ) 2
Other non-current (vii 85,81 82,584 78,315
liabilities i) 1
Total Liabilities 325,1 336,621 280,56
32 7
Net assets/(liabilities) 308,1 264,610 264,99
88 7
Equity
Parent entity interest 260,0 233,907 235,35
14 2
Minority interest 48,17 34,431 32,573
4
Total Equity 308,1 268,338 267,92
88 5
Notes on the December 05 Consolidated Balance Sheet
(i) Reflects debtors receivable on increased PGM concentrate sales
(ii) Reflects PGM concentrate inventory
(iii) Represents fixed assets within the Group
(iv) Increase in mining assets reflects Kroondal, Marikana, Mimosa and Everest
mining (mining rights)) assets
(v) Includes tax payable ($11 million) and creditors ($26 million)
(vi) Includes BEE deferred settlement proceeds ($10.5 million) and non interest
bearing portion of AQPSA shareholder loans (Implats $66 million and Savcon $81.5
million)
(vii) Includes interest bearing debt payable to RMB ($27 million), interest
bearing shareholder loan Savcon ($17 million)
(viii) Reflects deferred tax liabilities $59.9 million, provision for closure
costs $25.8 million
Operations
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 50.5%)
Kroondal Platinum Mine
Safety
The (12-month rolling average) DIIR deteriorated to 0.96 during the half year.
Action has been initiated to reduce the number of disabling injuries on the
mine.
Mining
* Underground operations hoisted a record 2.9 million tons from underground with
a further 285,000 tons from opencast for the half year
* The new No. 4 decline was established and was transferred as of 21st December
2005, as part of the boundary adjustments with the Marikana P&SA2 in exchange
for the RPM Townlands Block
Processing
* Plant feed increased to a record 3.2 million tons
* Plant head grade and recoveries fell marginally to 2.92g/t PGM and 78%
respectively
* Record production of 232,537 PGM ounces, a 67% increase period on period
Revenue
The PGM basket price for the half year increased 28% period on period to $879
per PGM ounce, resulting in mine revenue of R1.226 billion for the half year
(AQPSA share 50%). The on-mine cash margin for the half year to December 2005
rose to 53% compared to 38% for the first half to December 2005.
Operations
PGM production increased by 67% to a record 232,537 PGM ounces for the half year
(Aquarius attributable 116,269 PGM ounces). Plant head grade fell marginally to
2.92g/t PGM in the half year. The K1 and the new K2 plant both performed well,
processing a combined record of 3.2 million ROM tons, an 83% increase period on
period. 131,000 ROM tons remained on the surface stockpile at the end of the
half year.
An increase in the opencast blend from 8% to 10% at the end of the half year
marginally reduced recoveries to 78% for the half year. The blend ratio was
required to allow for a build up of an underground stockpile in preparation for
the Christmas and New Year holiday season. During the half year some process
upgrades were completed at the K1 Plant.
Cash costs per ROM ton decreased by 3.2% to R179 period on period. Cash costs
per PGM ounce increased 5.8% to R2,459 per PGM ounce period on period, a
credible performance over the 12 months. It should be noted that includes a
combination of costs for development and ledging operations as a result of
deepening the P&SA1 declines (R391 per PGM ounce), and higher costs associated
with the increase in open cast blend, notably from deeper open pit tons.
Kroondal Operating Costs Reconciliation
R per PGM ounce 6 months 6 months Variance
Dec 2005 Dec 2004
Cash costs 2,459 2,323 (136)
P&SA1 decline development (270) (267) 3
Grade dilution owing to (121) (R40) 81
decline development
Cash costs after adjustments 2,069 2,016 52
Development and equipping of additional underground mining areas continued at
the Central, East, No. 3 and No. 4 decline shafts. This will ensure steady
state production going forward, even though the No. 4 decline will now form part
of the Marikana P&SA2. A substantial total of 2,050 meters of development was
completed.
AQPSA"s commitments on the P&SA1 expansion project totalled R322 million at 31
December 2005 with R306 million paid. The expected final expansion capital cost
to AQPSA of the P&SA1 is estimated at R345 million (escalated) comparing
favourably to the cost of R370 million (unescalated) estimated at the time of
the P&SA1 announcement in June 2003. Future capital expenditure at P&SA1 will
be largely of a sustaining nature to maintain steady-state operations.
Marikana Platinum Mine
Safety
The 12 month rolling average DIIR for the half year improved to 0.76.
Mining
* The contract with Moolman Mining South Africa (MMSA) was rescinded on 19th
December 2005 on grounds of material misrepresentation by MMSA at time of tender
* MCC were appointed in MMSA"s stead, commencing operations in January 2006
* Stockpiles at the end of the half year totalled 54,000 ROM tons
* Trial underground mining extended 140 meters down dip of the portals
Processing
* 700,000 ROM tons were processed from the pits during the period
* Overall concentrator recoveries for the half year were 62%
* 48,111 PGM ounces were produced (Aquarius attributable 37,716 PGM ounces)
Revenue
The PGM basket price for the half year increased 25% period on period to $863
per PGM ounce. AQPSA"s Marikana revenues for the half year were R197 million,
greater than 50% of mine revenues for the period owing to:
(a) the P&SA2 becoming effective retrospectively to September 22nd 2005; and
(b) pipeline payment effects
Cash costs for the half year were negatively impacted as a result of near normal
stripping ratios coupled with under delivery of reef. A high strip ratio of
35:1 during the half year, coupled with the increased proportion of poor
recovery ores, resulted in a cash cost of R4,642 per PGM ounce, a reduction of
1.3% period on period.
AQPSA"s cash margin for the half year improved from -30% to 14% owing to higher
basket prices and a marginal improvement in cash costs to R4,642 per PGM ounce.
The margin figure was enhanced by pipeline effects owing to prices over the
period.
Operations
Mine reef tons fell to 736,000 tonnes. However, improvements in recoveries to
62% resulted in a 5% increase in production to 48,111 PGM ounces (Aquarius
attributable 37,716 PGM ounces).
A zone of large boulders was encountered in Pit A which resulted in low digging
rates in this area. The issue was resolved by revising the drilling pattern.
Extended depth of weathering in Pits A and SW affected PGM recoveries from these
ores thereby requiring blending with unoxidised ore and thus affecting overall
plant throughput. This resulted in a ROM stockpile of 54,000 tons of weathered
material containing an estimate recoverable 2,400 PGM ounces.
Marikana Pool & Share Agreement (P&SA2)
The P&SA2 between AQPSA and Anglo Platinum was retrospectively implemented in
September 22nd 2005. Production is anticipated in January 2006 from No. 4
shaft, transferred from Kroondal P&SA. The upgrading of the metallurgical plant
at Marikana to a capacity of 250,000 tons per month will commence shortly.
Currently down-dip developments on the No. 4 shaft declines as well as lateral
development to the West are on schedule.
Trial Underground Mining
The portals were successfully established and sinking has progressed to 140
meters down-dip. The dip of the Marikana ore body is flatter than initially
envisaged which will allow for more conventional bord and pillar mining and is
expected to positively impact on the production ramp-up rates of the P&SA2.
All lateral development for ventilation purposes was completed to the east of
the declines and underground development has progressed to the extent that
mechanical installations commenced in January 2006.
Moolman Mining Dispute
On 19 December 2005, Aquarius Platinum (South Africa) (Pty) Ltd, AQPSA,
rescinded the Marikana Mining contract with Moolman Mining ("Moolmans").
Moolmans was replaced by MCC Mining, an already established contractor at both
the Kroondal and Everest Mines. Production at Marikana has thus continued
without any untoward interruption.
Rescission of the Moolmans" contract was based on the recent discovery,
following an audit by KPMG, that Moolmans misrepresented material facts which
induced AQPSA into concluding that contract. The decision to resile from the
contract was taken after careful consideration of external forensic accounting
and legal advice. AQPSA should not continue in business with an essential
supplier who has proved unreliable.
AQPSA has instructed its attorneys vigorously and expeditiously to pursue legal
proceedings against Moolmans for recovery of all damages caused by Moolmans.
These are estimated to amount to approximately ZAR1 billion. Preparatory work
has already commenced and it is anticipated that formal High Court proceedings
will be launched not later than May 2006.
Moolmans has alleged the following counterclaims against AQPSA:
a) a claim for escalation ("rise and fall") of R218.5 million, excluding
interest;
b) a claim for a so-called `early termination penalty" of R70 million.
These claims alleged by Moolmans will be defended. There is, in AQPSA"s view,
no reasonable prospect of success for any of Moolmans" claims and no liability
has been recognised.
Everest Platinum Mine
Safety
The (12 month rolling average) DIIR for the first half was 1.18 for the half
year. Regrettably on 17th October 2005 an assistant pipe fitter suffered fatal
injuries when he fell from a steel structure 8 metres high. An investigation
has been completed by the Department of Minerals and Energy; however, the report
has not yet been issued. The preliminary indications are that the assistant
pipe fitter was issued and trained in the use of a safety harness; however, he
failed to secure himself. All employees working at height have been retrained.
Mining
* Opencast operations ahead of schedule with 279,000 tons produced during the
period
* Underground development continuing, producing 85,000 tons in the period
* Stockpiles at the end of the half year totalled 472,000 tons
Processing
* Concentrator plant hot commissioned ahead of schedule
* 128,757 tons were processed
* 7,111 PGM ounces produced
* In line with the commissioning period, concentrator plant recoveries were 55%
Revenue
The PGM basket price for the period was $886 per PGM ounce. Revenue for the
half year was R31 million which will be credited to the capital cost of the
project.
As a result of the more rapid ramp-up of operations and the prospect of
maintaining the mine in positive net profit territory from hereon, the mine will
convert to operational status from 1st January 2006.
Operations
Opencast mining remained ahead of programme, with a total of 279,000 tons
produced during the half year. The opencast mining area continues to perform
well in terms of production and costs, providing the bulk of the reef stockpile.
Underground mining progressed well during the period, with on-reef decline
development and the first stoping sections being established. Underground
production tonnages were as planned, with 85,000 tons of underground ROM tons
produced. Equipping of the underground mining is on track with conveyor
installations, ventilation and mining services completed on schedule. The
underground mining is ramping up as planned within budget, and no significant
geological or mining problems have been experienced. The combined opencast and
underground mining have yielded a cumulative stockpile of 472,000 ROM tons.
The Everest construction programme finished approximately a month ahead of
schedule with hot commissioning commencing at the end of November 2005. Hot
commissioning proceeded very well with 128,757 tons milled during the December
production month to produce 7,111 PGM ounces. The plant performed within
expectations for the commissioning period with a recovery of 55%. Plant feed
consisted predominantly of open cast ore at a head grade of 3.12 g/t PGM.
Process plant availability and throughput is encouraging and a steady ramp-up in
tonnage throughput is anticipated in the current quarter.
Project Capital Expenditure
The capital expenditure budget is R819 million including a R33 million allowance
for escalation. The project capital expenditure commitments were R622 million
at the end of the December 2005 with capital expenditure spent to date of R413
million. It is anticipated that the project will now incur capital expenditure
of approximately R707 million as a result of:
* Direct project savings identified of R23 million;
* Escalation allowance of R33 million not utilised; and
* Early project start savings at R56 million as a result of no longer
capitalising working costs for from January 2006.
Mimosa Mine (Aquarius 50%)
Safety
The mine recorded a significant improvement in safety performance. The (12 month
rolling average) DIIR for the half year was 0.12.
Mining
* Underground operations hoisted 862,000 tonnes, a 31% increase period on period
Processing
* Plant feed increased to a record 3.2 million tons
* Plant head grade and recoveries improved marginally to 3.74g/t PGM and 78%
respectively
* Production of 71,762 PGM ounces (Aquarius attributable 35,881 PGM ounces)
Revenue
The PGM basket price for the half year increased by 10% period on period to $637
per PGM ounce. Together with the contribution from base metals (approximately
29% of gross revenue), this generated sales revenue for the half year of $55.4
million, with a gross cash margin increase of 61%.
Operations
During the half year mining operations hoisted a total of 862,000 ROM tons
compared. The average plant head grade for the half year improved 2% period on
period to 3.74g/t PGM. Production for the half year improved 18% period on
period to a record 71,762 PGM ounces.
The plant optimisation programme continued during the half year, focusing on the
use of alternative grinding media and reagents. The objectives of the trials
were to improve metal recovery rates and identify a reliable supplier of
materials. Following the trials, appropriate and cost effective reagents and
grinding media have been selected.
Cash costs per PGM ounce rose for the period by 7.5% to US$343 per PGM ounce.
The cash cost net of by-product credits fell by 5% to US$100 per PGM ounce. The
second quarter saw a strong improvement in cash costs to $325 per PGM ounce ($94
per ounce after by-product credits) in part owing to a relaxation of controls on
foreign exchange management through the Tradeable Foreign Currency Balance
System (TFCBS).
Dividend receipts from Mimosa continue to be passed through to shareholders.
Wedza Phase IV Upgrade
Work on the Wedza Phase IV Upgrade project to take production from 120,000 tons
to 150,000 tons milled per month commenced during the half year following the
granting of all requisite approvals by government. The project is on track for
commissioning in May 2006, ramping to full production in July 2006.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%)
Safety
No accidents were reported during the period.
Processing
* 98,000 tons processed during the half year
* 2,897 PGM ounces produced
Operations
Throughput of current arisings from the Kroondal Chrome Mine and dump material
from the Bayer Chrome Mine rose to above planned levels during the half year.
The additional Bayer related feed rates had a negative impact on recoveries
which dropped as low as 20% at times. It has been determined that the dump
material requires further upgrading prior to being fed to the CTRP. The
quantity of dump material has since been restricted and will remain so until
further metallurgical work is completed. By December, recoveries on the current
arisings had improved to over 40%.
Test work at Mintek was commissioned to better understand the metallurgical
characteristics of the various feed sources. Preliminary results are providing
a strong basis for improved performance in the future but the challenges are
more complex than initially predicted. The project planning for the retrofit of
additional process equipment is underway and designs will be finalised following
the final results of the Mintek test work.
Cash operating costs per ton were R95 per ton treated, and R3,187 per PGM ounce.
A cash margin of 44% was achieved.
CORPORATE MATTERS
AQP Directorate
Subsequent to the end of the half year, Ms Cathie Markus tendered her
resignation from the Board of Directors of Aquarius Platinum Limited. The Board
wish to record its appreciation of Ms Markus" contribution towards the growth of
the Company during her tenure as director.
AQPSA Directorate
It is with great sadness that the Board of Directors of Aquarius Platinum South
Africa announces the death of Bruce Sutherland on 27 October 2005. Bruce was
involved with Aquarius since its inception, formerly as a Director of Kroondal
Platinum Mines Limited and subsequently as an AQPSA Director and mining
consultant. He was a force in guiding the management of this young company and
his contributions will be sorely missed.
AQPSA is pleased to announce the appointment of Peter Ledger as a Non-Executive
Director and mining consultant to the Board of Aquarius Platinum South Africa as
of January 2006. Peter was previously an Executive Director of Lonmin plc,
responsible for its South African mining operations, retiring from this position
in January 2005.
Conversion of South African mining and prospecting rights
a) Mining Rights
The applications for Kroondal and Marikana have been passed on by the regional
office of the Department of Minerals and Energy to its Head Office in Pretoria.
The Everest conversion is still with the regional office and it is anticipated
that this should be passed on to Head Office by the end of March 2006.
b) Prospecting Rights
Two new order applications have been granted: Hoogland and Chieftains Plain.
New debt facility
AQPSA has entered into a new debt facility with Rand Merchant Bank to refinance
its existing debt facilities on significantly improved terms. The new facility
of R700 million will provide AQPSA with the requisite funding for any future
growth opportunities and for balance sheet optimisation. It reflects the
substantially improved operational profile of AQPSA in comparison to that in
existence when the Investec facility was originally entered into in 2002.
The facility has been structured as a 6 year amortising senior loan and provides
AQPSA with a large degree of flexibility in managing its funding cost and
financial risk. The facility can be denominated in either Rands or US Dollars at
AQPSA"s election and AQPSA is entitled at any time during the facility term to
repay and or redraw principle amounts subject to the amortising facility limit
not being breached.
The margin payable on the new facility is 190 basis points above both JIBAR and
LIBOR.
Statistics Kroondal Marikana
P&SA1 P&SA2
Unit 6 6 6 6
month month month month
sDec sDec sDec sDec
2005 2004 2005 2004
Safety
DIIR Rate/200,000 0.96 0.66 0.76 0.75
man hours
Revenue
Gross revenue Millions 1,227 521 197 165
PGM basket $/oz 879 686 863 688
Price
Gross cash % 53 38 14 (30)
margin
Nickel Price $/lb 6.17 6.37 6.17 6.36
Copper Price $/lb 1.83 1.35 1.83 1.35
Ave R/$ rate 6.52 6.23 6.52 6.23
Cash Costs on-mine
Per ROM ton R/ton 179 185 303 281
$/ton 27 30 47 45
Per PGM R/oz 2,458 2,323 4,642 4,699
(3E+Au)
$/oz 377 373 712 755
Per PGE R/oz 2,025 - 3,857 -
(5E+Au)
$/oz 311 - 592 -
Capex
Current/Sustai R"000s 33,52 1,497 6,746 7,148
ning 100% 5
$"000s 5,145 236 1,035 1,148
Expansion 100% R"000s 57,93 313,3 8,147 -
6 47
$"000s 8,891 50,59 1,250 -
3
Mining Processed
Underground ROM ton 2,911 1,595 36 -
`000s
Open Pit ROM ton 285 151 700 764
`000s
Total ROM ton 3,195 1,746 736 764
`000s
Grade
Plant Head g/t PGM 2.92 3.09 3.25 3.75
Recoveries % 78 80% 62 50%
PGM Production
Platinum Ozs 138,9 83,04 30,13 29,74
59 8 1 5
Palladium Ozs 67,75 40,28 13,28 12,25
2 6 8 3
Rhodium Ozs 24,67 15,00 4,327 3,309
2 8
Gold Ozs 1,155 667 365 406
Total PGM Ozs 232,5 139,0 48,11 45,71
(3E+Au) 37 09 1 3
Total PGE Ozs 282,2 - 57,88 -
(5E+Au) 68 7
Base Metals Production
Nickel Tons 222 130 72 49
Copper Tons 98 57 41 26
Chromite (000) Tons `000s 258 119 104 124
*Data reflects 100% of operations
Statistics Everest Mimosa CTRP
Unit 6 6 6 6 6 6
month month month month month month
sDec sDec sDec sDec sDec sDec
2005 2004 2005 2004 2005 2004
Safety
DIIR Rate/200,000 1.18 - 0.12 0.40 0 -
man hours
Revenue
Gross revenue Millions 31 - 55.40 40 17 -
PGM basket $/oz 886 - 637 580 1,024 -
Price
Gross cash % 28 - 61 62 44 -
margin
Nickel Price $/lb 6.09 - 6.53 6.11 6.17 -
Copper Price $/lb 2.08 - 1.60 1.08 1.83 -
Ave R/$ rate 6.35 - - - 6.52 -
Cash Costs on-mine
Per ROM ton R/ton 168 - - - 95 -
$/ton 27 - 32 29 15 -
Per PGM (3E+Au) R/oz 3,136 - - - 3,268 -
$/oz 494 - 343 319 501 -
Per PGE (5E+Au) R/oz 2,695 - - - 2,318
$/oz 424 - - - 356 -
Capex
Current/Sustain R"000s - - - - - -
ing 100%
$"000s - - 4,327 9,154 - -
Expansion 100% R"000s 349,1 - - - 378 -
89
$"000s 55,02 - 3,581 656 58 -
6
Mining Processed
Underground ROM ton 39 - 862 656 - -
`000s
Open Pit ROM ton 89 - - - - -
`000s
Total ROM ton 129 - 862 656 98 -
`000s
Grade
Plant Head g/t PGM 3.12 - 3.74 3.66 2.95 -
Recoveries % 55 - 78 76.9 33 -
PGM Production
Platinum Ozs 4,161 - 36,50 31,28 1,801 -
9 4
Palladium Ozs 2,351 - 27,49 23,07 632 -
7 6
Rhodium Ozs 532 - 2,797 2,408 458 -
Gold Ozs 67 - 4,959 4,226 6 -
Total PGM Ozs 7,111 - 71,76 60.99 2,897 -
(3E+Au) 2 4
Total PGE Ozs 8,223 - - - 4,085 -
(5E+Au)
Base Metals Production
Nickel Tons 13 - 1,000 891 - -
Copper Tons 5 - 832 736 - -
Chromite (000) Tons `000s - - 30 26 - -
Aquarius Platinum Limited
Incorporated in Bermuda
Exempt company number 26290
Board of Directors
Nicholas Sibley Independent Non-executive Chairman
Stuart Murray Chief Executive Officer
David Dix Independent Non-executive
Edward Haslam Independent Non-executive
Sir William Purves Senior Independent Non-executive Director
Patrick Quirk Independent Non-executive
Zwelakhe Sisulu Non-executive
Catherine Markus Non-Executive Director (resigned 17th January 2006)
Audit/Risk Committee
Sir William Purves (Chairman)
David Dix
Edward Haslam
Nicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)
Nicholas Sibley
Nomination Committee
The full Board comprises the Nomination Committee
Company Secretary
Willi Boehm
Issued Capital
At 31 December 2005, the Company had on issue:
82,864,892 fully paid common shares
3,746,402 unlisted options
Substantial Shareholders 31 Number of Percentage
December 2005 Shares
Impala Platinum Holdings Ltd 7,141,966 8.6
National Nominees Limited 5,788,271 7.0
J P Morgan Nominees Australia 4,750,117 5.7
Limited
ANZ Nominees Limited 4,343,794 5.2
Broker (LSE)
Williams de Broe
6 Broadgate
London EC2M 2RP
Telephone: +44 (0)20 7588 7511
Facsimile: +44 (0)20 7588 8860
Broker (ASX)
Euroz Securities
Level 14, The Quadrant
1 William Street
Perth WA 6000
Telephone: +61 (0)8 9488 1400
Facsimile: +61 (0)8 9488 1478
Sponsor (JSE)
Investec Bank Limited
100 Grayston Drive
Sandown Sandton 2196
Telephone:+27 (0)11 286 7326
Facsimile:+27 (0)11 291 1066
Aquarius Platinum (South Africa) Aquarius Platinum Corporate
(Proprietary) Ltd Services Pty Ltd
50.5% Owned 100% Owned
(Incorporated in the Republic of (Incorporated in Australia)
South Africa) ACN 094 425 555
Registration Number 2000/000341/07
The Great Wall Group Building
Block A, 1st Floor Level 4, Suite 5
5 Skeen Boulevard South Shore Centre
Bedfordview South Africa 2007 85 The Esplanade
P O Box 1282 South Perth Western Australia 6151
Bedfordview South Africa 2009 Telephone: +61 (0)8 9367 5211
Telephone: +27 (0)11 455 2050 Facsimile: +61 (0)8 9367 5233
Facsimile: +27 (0)11 455 2095 Email:
Email: info@aquariusplatinum.com
info@aquariussa.co.za
AQPSA Management
Stuart Murray Executive Chairman
Gert Ackerman Managing Director
Ayanda Khumalo Finance Director
Neil Collett General Manager Business Development
Graham Ferreira General Manager Finance & Company Secretary
Hugo Holl General Manager Everest
Robert Mallinson General Manager Marikana
Gordon Ramsay General Manager Projects
Dave Starley General Manager Kroondal
Gabriel de Wet General Manager Engineering
Mimosa Mine Management
Alex Mhembere Managing Director
Winston Chitando Finance
Director
Herbert Mashanyare Technical
Director
Peter Chimboza Operations Director
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 PGM 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(s)
(6E) 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)
(5E+Au) Platinum Group Metals. Five metallic elements commonly found together
which constitute the payable platinoids plus gold. These are platinum
(Pt), palladium (Pd), rhodium (Rh), ruthenium (Ru), iridium (Ir) and
gold (Au)
PGM(s)
(3E+Au) Platinum Group Metals as reported by Aquarius Platinum. These are
platinum (Pt), palladium (Pd), rhodium (Rh) and gold (Au) constituting
the majority of payable metal in the UG2 Reef
P&SA1 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Kroondal
P&SA2 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Marikana
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
plantThis 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 (0)7392 740 452
In South Africa:
Stuart Murray Charmane Russell
Aquarius Platinum (South Russell & Associates
Platinum) (Pty) Ltd +27 (0)11 880 3924
+27 (0)11 455 2050
or visit:
www.aquariusplatinum.com
Appendix 4D
HALF YEAR REPORT
6 MONTHS ENDED 31 DECEMBER 2005
Details of the reporting period and the previous corresponding period
Name of entity
Aquarius Platinum Limited
ABN Reporting period Previous
corresponding period
087 577 893 Six months ended Six months ended
31/12/05 31/12/04
Results for announcement to the market
$US"000
Revenues from ordinary up 62 % t 159,706
activities o
Profit from ordinary
activities after tax up 332 % t 25,915
attributable to members o *
Dividends Amount per Franked
security amount per
security
Interim dividend 6 Cents - Cents
(USD) (USD)
Record date for determining 2 March
entitlements to the dividend 2006
Refer to the Half Yearly Results announcement released
in conjunction with this appendix 4D to the market on
10th February 2006.
* Consists of
Net profit before non cash up 125 % t 38,733
charges o
Amortisation and depreciation (9,093)
of mining assets
Amortisation of fair value (3,725)
uplift of mineral properties
Net profit after non cash Up 332 % t 25,915
charges o
Director"s Report
Your directors submit their report for the half-year ended 31 December 2005.
Directors
The names of the company"s directors in office during the half-year and until
the date of this report are as below. Directors were in office for this entire
period unless otherwise stated.
Nicholas T David Dix
Sibley
Stuart A Murray G Edward Haslam
Patrick D Quirk Zwelakhe Sisulu
Sir William Catherine E Markus (resigned 17
Purves January 2006)
Review and Results of Operations
Aquarius Platinum Limited (Aquarius) recorded an operating profit after tax for
the six month period of US$25.9M, an increase of 332% over the previous
corresponding period ("pcp") result of US$6.0M, which period included a profit
of $3.1 million on the sale of 2% of AQPSA to Implats. The operating results
reflect the growth of Aquarius which has seen operating PGM production
attributable to Aquarius increase by 31%. The Group"s production is expected to
show further growth in the second half of this financial year as the Everest
mine commences contributing to operating production.
The Directors have declared an interim dividend of 6 cents per share (2005: 3
cents per share) payable on 23 March 2006 to shareholders registered on 2 March
2006.
During the year the Group built on the foundation from which it will deliver the
growth that has been referred to in previous reports. The Everest mine has now
commenced production and has been transferred to operations effective 1 January
2006. Everest produced 7,111 PGM ounces in ramp up mode in December 2005 and is
expected to contribute significantly to PGM production in the second half of
this financial year. Revenue from Everest"s December production has been
credited to capital expenditure.
Operating Contribution 31/12/ 31/12/0 %+/-
05 4
PGM Ounces
Attributable production 198,42 145,714 36%
6
(includes attributable 191,31 145,714 31%
production from ordinary 5
operations)
Profit US$"000
Kroondal 40,982 10,293 298%
Marikana 1,388 (17,765) -
Mimosa 12,299 7,059 74%
CTRP 336 - -
Other/Corporate (2,971 4,616* -
)
Net Profit before tax 52,034 4,203 1,138
%
Tax (expense)/credit (12,58 1,113 -
1)
Net profit after tax 39,453 5,316 642%
Outside equity interest (13,53 686 -
8)
Net profit attributable to 25,915 6,002* 332%
members
*(Includes $3.1 million profit on sale of 2% of
AQPSA to Implats)
The profit was achieved on a 62% increase in revenue from US$98.8 million to
US$159.7M. All mining operations returned a profit for the six month period.
Amortisation and depreciation were marginally higher at $9 million from $8.6
million despite a 31% increase in production from normal operations. The impact
of the Pooling & Sharing Agreement 2 (P&SA2) at Marikana which extended the life
of mine at Marikana has reduced the pro-rata amount of amortisation attributable
to the P&SA2. Net finance charges for the period were $0.5 million, comprising
$1.8 million in interest income and $2.3 million interest expense. Interest of
$1.0 million was capitalised as part of the Everest construction costs.
The prices for platinum group metals showed healthy gains over the period, with
the PGM basket price (platinum, palladium, rhodium and gold) in South African
averaging $872 per PGM ounce across the operations and averaging $637 per PGM
ounce in Zimbabwe. The South African basket price increased 23% over the period
to $966 per PGM ounce at the end of December. The Zimbabwean basket price
increased 20% to $746 per PGM ounce at the end of December.
Aquarius" cash balances of $85 million at 31 December 2005 are expected to
increase in the second half of the year as Group production increases. This
together with the new RMB facility will provide Aquarius with the requisite
funding for any future growth opportunities and for balance sheet optimisation.
Refer to the Half Yearly Results announcement released in conjunction with this
Appendix 4D to the market on 10th February 2006 for further information.
The amounts contained in this report and in the half-year financial report have
been rounded to the nearest $1,000 (where rounding is applicable).
Signed in accordance with a resolution of the Directors.
Nicholas T Sibley
Chairman
Date: 10th February 2006
Condensed consolidated income statement
(Half year ended 31 December 2005)
31/12/05 31/12/04
$US"000 $US"000
Revenue 159,706 98,762
Foreign exchange loss (2,297) (1,694)
157,409 97,068
Cost of sales (98,550) (83,088)
Gross profit 58,859 13,980
Amortisation of fair value (3,725) (2,599)
uplift of mineral properties
Gross profit after 55,134 11,381
amortisation of fair value
uplift of mineral properties
Administrative and other costs (1,983) (3,389)
Foreign exchange gain 1,207 2,395
Finance costs (2,324) (6,185)
Profit before income tax 52,034 4,202
Income tax on ordinary (12,581) 1,113
activities
Net profit from ordinary 39,453 5,315
activities
Net (profit)/loss attributable (13,538) 687
to outside equity interests
Net profit for the period 25,915 6,002
attributable to members of
Aquarius Platinum Limited
Earnings per security (EPS)
Basic EPS 31.50 cents 7.32 cents
Diluted EPS 30.90 cents 7.32 cents
Condensed consolidated statement of recognised gains and losses
(Half year ended 31 December 2005)
Foreign currency translation 31/12/05 31/12/04
adjustments recognised directly $US"000 $US"000
in equity
4,658 5,413
Net profit for the period 25,912 6,002
Total recognised gains and 30,570 11,415
losses
Condensed consolidated balance sheet
(Half year ended 31 December 2005)
As at As at As at
31/12/05 30/06/05 31/12/04
$US"000 $US"000 $US"000
Non-current assets
Investments 460 437 512
Property, plant and 145,335 137,819 155,289
equipment
Mining assets 333,675 271,050 254,330
Total non-current assets 479,470 409,306 410,131
Current assets
Cash and cash equivalents 84,954 75,251 136,746
Trade and other receivables 46,098 44,695 34,162
Investments 3 3 4
Inventories 22,416 16,308 19,855
Other 379 1 333
Total current assets 153,850 136,258 191,100
Total assets 633,320 545,564 601,231
Non-current liabilities
Payables 158,190 150,735 176,697
Interest bearing 44,042 16,037 18,519
liabilities
Deferred tax liabilities 59,994 53,789 57,491
Provisions 25,817 24,526 25,093
Total non-current 288,043 245,087 277,800
liabilities
Current liabilities
Trade and other payables 25,674 25,538 28,836
Interest bearing - - 20,408
liabilities
Current tax liabilities 11,154 9,612 9,255
Provisions 261 330 322
Total current liabilities 37,089 35,480 58,821
Total liabilities 325,132 280,567 336,621
NET ASSETS 308,188 264,997 264,610
Shareholders equity
Issued capital 12,433 12,413 12,413
Shares held for employee (2,351) (2,928) (3,728)
share plan
Share premium reserve 137,234 136,669 136,668
Foreign currency 12,127 7,469 18,491
translation reserve
Retained earnings 100,571 78,801 66,335
Equity attributable to 260,014 232,424 230,179
members of Aquarius
Platinum Limited
Minority interests 48,174 32,573 34,431
TOTAL EQUITY & MINORITY 308,188 264,997 264,610
INTEREST
Condensed consolidated statement of cash flows
(Half year ended 31 December 2005)
31/12/05 31/12/04
$US"000 $US"000
Cash flows related to operating
activities
Receipts from customers 153,832 77,390
Payments to suppliers and employees (88,674) (65,308)
Interest and other items of similar 1,870 3,400
nature received
Interest and other costs of finance (2,324) (5,604)
paid
Income taxes paid (6,003) -
Net operating cash flows 58,701 9,878
Cash flows related to investing
activities
Payments for mining assets and - (40,798)
development costs
Payment for purchases of property, (75,406) -
plant and equipment
Proceeds from sale of property, - -
plant and equipment
Payment for purchases of equity - (494)
investments
Proceeds from disposal of - 4,445
investments
Net investing cash flows (75,406) (36,847)
Cash flows related to financing
activities
Proceeds from issues of shares 585 38,193
Payments for share issue and - (4,671)
listing expenses
Proceeds from borrowings 53,591 97,439
Repayment of share-plan loans 411 1,145
Repayment of borrowings (26,966) (53,199)
Payment of principal potion of hire (8) 1
purchase liability
Dividends paid (4,117) (2,463)
Net financing cash flows 23,496 76,445
Net increase (decrease) in cash 6,791 49,476
held
Cash at beginning of period 75,251 77,942
Exchange rate adjustments to 2,912 9,132
opening cash
Cash at end of period 84,954 136,550
BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT
The half-year financial report does not include all notes of the type normally
included within the annual financial report and therefore cannot be expected to
provide as full an understanding of the financial performance, financial
position and financing and investing activities of the consolidated entity as
the full financial report.
The half-year financial report should be read in conjunction with the Annual
Financial Report as at 30 June 2005. It is also recommended that the half-year
financial report be considered together with any public announcements made by
the company and its controlled entities during the half-year ended 31 December
2005 in accordance with the group"s continuous disclosure obligations.
a) Basis of Accounting
The half-year financial report is a general-purpose financial report, which
has been prepared in accordance with International Accounting Standard 34
("IAS 34").
For the purpose of preparing the half-year financial report, the half-year
has been treated as a discrete reporting period.
The consolidated financial statements have been prepared under the
historical cost accounting convention.
The consolidated financial information has been rounded to the nearest
thousand of US dollars unless otherwise stated.
b) Changes in Accounting Policies
Unless disclosed below, the accounting policies, estimation methods and
measurement bases used in this report are the same as those used in the
last annual report.
Adoption of new and revised International Financial Reporting Standards
In the current year, the Group has adopted all of the new and revised Standards
and Interpretations issued by the International Accounting Standards Board (the
IASB) and the International Financial Reporting Interpretations Committee
(IFRIC) of the IASB that are relevant to its operations and effective for
accounting periods beginning on 1 July 2005. The adoption of these new and
revised Standards and Interpretations has resulted in changes to the Group"s
accounting policies in the following areas that have affected the amounts
reported for the current or prior years:
Share-based payments (IFRS 2)
IFRS 2 Share-based Payment requires the recognition of equity-settled share-
based payments at fair value at the date of grant and the recognition of
liabilities for cash-settled share-based payments at the current fair value at
each balance sheet date. Prior to the adoption of IFRS 2, the Group did not
recognise the financial effect of share-based payments until such payments were
settled.
In accordance with the transitional provisions of IFRS 2, the Standard has been
applied retrospectively to all grants of equity instruments after 7 November
2002 that were unvested as of 1 July 2005, and to liabilities for share-based
transactions existing at 1 July 2005.
The Group currently has a Share Plan and an Option Plan for directors and
employees. Loans made under the Share plan are treated as share based
compensation under IFRS 2. Under this approach the principal amount of the
interest free limited recourse loans provided to acquire shares are reclassified
from receivables to a separate class of shareholders" equity ("Shares held for
Employee Share Plan"). Dividends paid on shares issued under the share plan, to
the extent they are withheld to repay the loans, are offset against that
separate class of shareholders" equity. For the half year ending 31 December
2005, the change in accounting policy has resulted in a net decrease in profit
for the year of US$52,962. There was no impact on profits in prior years and no
material impact on earnings per share.
Early Adoption of Accounting Standards
The group has elected to apply IFRS 6 Exploration and Evaluation of Mineral
Resources effective 1 July 2005 even though the standard is not required to be
applied until subsequent reporting periods
Future Accounting Standards
At the date of authorization of these financial statements, the following
Standards and Interpretations were in issue but not yet effective:
IFRS 7 "Financial Instruments: Disclosures"
IFRIC 4 "Determining whether an Arrangement contains a Lease"
IFRIC 5 "Right to Interests Arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds"
The directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the financial
statements of the Group.
Notes to the condensed consolidated income statement
31/12/05 31/12/04
$US"000 $US"000
Revenue from ordinary activities
Sales revenue 157,713 91,166
Interest revenue 1,870 3,400
Other revenue 123 4,196
Total revenue 159,706 98,762
Cost of sales
Amortisation and depreciation 9,093 8,593
Cost of production 88,595 73,769
Royalties 862 726
Total cost of sales 98,550 83,088
Details of individual and total dividends and dividend payments
Date the interim dividend is 23 March 2006
payable
Record date to determine 2 March 2006
entitlements to the dividend
Has the dividend been declared? Yes
Interim dividends on all securities
Total Amount per Franked
amount share amount per
paid or US$ share
payable
US$"000
4,972 6 Cents - Cents
Interim dividend: (USD) (USD)
Current period
2,483 3 Cents - Cents
Previous (USD) (USD)
period
Other disclosures in relation to dividends
The proposed interim dividend for the current period of 6
cents per share has not been provided for in the Condensed
Balance Sheet in accordance with International Financial
Reporting Standards.
The company does not have a dividend reinvestment plan.
Earnings per security (EPS)
Details of basic and diluted EPS reported separately in
accordance with IAS 33: Earnings Per Share are as follows.
31/12/05 31/12/04
$US"000 $US"000
Net Profit: 39,453 5,315
Adjustments:
Net profit attributable to (13,538) 687
outside equity interest
Earnings used in calculating 25,915 6,002
basic and diluted earnings per
share
Current Previous
period corresponding
Number of period
Shares Number of
Shares
Weighted average number of 82,206,742 81,998,892
ordinary shares used in
calculating basic earnings per
share
Effect of dilutive securities:
Share options 1,607,210 -
Adjusted weighted average 83,813,952 81,998,892
number of ordinary shares used
in calculating diluted
earnings per share
Details of entities over which control has been gained or lost during the period
Name of entity Contribution to net Profit (loss) for the
(or group of profit (loss) previous corresponding
entities) and period
date of the
gain or loss
of control
Current Previous Current Previous
period correspond period correspond
$US"000 ing period $US"000 ing period
- $US"000 - $US"000
- - - -
- - - -
Total
Details of associates and joint venture entities
The economic entity has an interest (that is material to it) in the following
entities:
Percentage of
ownership interest
Name of entity held at end of Contribution to net
period or date of profit (loss)
disposal
31/12/05 31/12/04
31/12/0 31/12/04 $US"000 $US"000
5
Mimosa 50% 50% 11,390 6,727
Investments
Limited
11,390 6,727
Total
31/12/05 31/12/04
Group"s share of associates" $US"000 $US"000
and joint venture entities":
Profit from ordinary 12,333 7,024
activities before tax
Income tax on ordinary (943) (297)
activities
Profit from ordinary 11,390 6,727
activities after tax
Adjustments - -
11,390 6,727
Share of net profit of
associates and joint venture
entities
Subsequent events
There have been no subsequent events for noting.
Contingency : Moolman Mining Dispute
On 19 December 2005, Aquarius Platinum (South Africa) (Pty) Ltd, AQPSA,
rescinded the Marikana Mining contract with Moolman Mining ("Moolmans").
Moolmans was replaced by MCC Mining, an already established contractor at both
the Kroondal and Everest Mines. Production at Marikana has thus continued
without any untoward interruption.
Rescission of the Moolmans" contract was based on the recent discovery,
following an audit by KPMG, that Moolmans misrepresented material facts which
induced AQPSA into concluding that contract. The decision to resile from the
contract was taken after careful consideration of external forensic accounting
and legal advice. AQPSA should not continue in business with an essential
supplier who has proved unreliable.
AQPSA has instructed its attorneys vigorously and expeditiously to pursue legal
proceedings against Moolmans for recovery of all damages caused by Moolmans.
These are estimated to amount to approximately ZAR1 billion. Preparatory work
has already commenced and it is anticipated that formal High Court proceedings
will be launched not later than May 2006.
Moolmans has alleged the following counterclaims against AQPSA:
a) a claim for escalation ("rise and fall") of R218.5 million, excluding
interest. ;
b) a claim for a so-called `early termination penalty" of R70m.
These claims alleged by Moolmans will be defended. There is, in AQPSA"s view,
no reasonable prospect of success for any of Moolmans" claims; no liability has
been recognised.
Segment reporting
The economic entity operates in the mining industry through the
ownership and operation of platinum group metals mining projects.
The group operates in four geographical segments - South Africa,
Zimbabwe, Bermuda and Australia.
Geographical
segments
Bermud South Austra Zimbabw Eliminat Consolida
31 December 2005 a Afric lia e ions ted
US$"000 a
External sales - 126,3 31,340 157,713
73
External other 21 1,052 544 376 1,993
revenues
Intersegment 838 - 223 - (1,061) -
revenues
Segment revenue 859 127,4 767 31,716 (1,061) 159,706
25
Segment result (766) 40,00 (888) 12,333 1,350 52,034
5
Income tax (12,581)
expense
Profit after tax 39,453
Minority interest (13,538)
Net profit 25,915
Bermud South Austra Zimbabw Eliminat Consolida
31 December 2004 a Afric lia e ions ted
US$"000 a
External sales - 68,46 - 22,705 - 91,166
1
External other 4,204 2,870 504 16 2 7,596
revenues
Intersegment 3,263 - 214 - (3,477) -
revenues
Segment revenue 7,467 71,33 718 22,721 (3,475) 98,762
1
Segment result 2,802 (8,53 1,873 7,024 1,033 4,202
0)
Income tax 1,113
expense
Profit after tax 5,315
Minority interest 687
Net profit 6,002
Issued and quoted securities at end of current period
Issue Amount
Category of securities Total Number price paid
number quoted per up per
securi securi
ty ty
(cents (cents
) )
Ordinary securities 82,884,89 82,864,8
2 92
Changes during
current period:
Increases through - - - -
issues
Increases through 131,000 - - -
option conversions
Decreases through - - - -
returns of
capital, buybacks,
redemptions
Options (description and Exerci Expiry
conversion factor) se date
Unlisted employee Price (if
options each any)
convertible for one
ordinary share
1,484,000 GBP2.5 23/10/
380,000 - 0 11
1,093,967 - GBP3.3 21/11/
209,865 - 2 13
479,605 - GBP2.5 11/06/
78,965 - 4 11
GBP2.5 11/06/
4 11
GBP2.9 02/11/
2 11
GBP3.3 02/08/
2 12
Changes during
current period:
Issued during 78,965
current period GBP3.3 02/08/
- Employee 2 12
options
Exercised during 131,000 - - -
current period
Expired during 16,189 - - -
current period
DIRECTORS" DECLARATION
In accordance with a resolution of the Directors of Aquarius Platinum Limited I
state that:
In the opinion of the Directors:
a) the financial statements and notes of the consolidated entity:
i) give a true and fair view of the financial position as at 31 December
and the performance of the consolidated entity for the half-year ended
on that
date; and
ii) comply with International Accounting Standard IAS 34; and
b) there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable.
On behalf of the Board
Nicholas Sibley
Chairman
Date: 10th February 2006
Date: 10/02/2006 12:12:43 PM Produced by the JSE SENS Department
