| Thu 10 Aug 2006, 10:50 | | Aquarius Platinum Limited - Annual Results: 30 Jun |
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AQP
AQP
Aquarius Platinum Limited - Annual Results: 30 June 2006
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP & ISIN Code: BMG0440M1029
("Aquarius Platinum")
2006 FULL YEAR RESULTS: 30 June 2006
Record production and strong prices deliver a four-fold increase in net profit
to $85.6 million
Highlights of the year:
- Record group production of 447,693 PGM ounces
- Net profit up 309% to $85.6 million (US 101 cents per share)
- Cash profit up 141% to $114.4 million (US135 cents per share)
- Full Year dividend increases three-fold to US 24 cents per share
Operational
- Group attributable production up 37% to 447,693 PGM ounces (2005: 327,669
PGM ounces)
- Kroondal production record as expansion ramped up
- Significant improvements at year end show promise at Marikana
- Everest mine delivers production ahead of schedule
- Mimosa expansion completed to deliver more production in new-year
- Chrome tailings project increased production
Financial
- Revenue increased 92% to $426.6 million
- Net profit after tax "cash basis" up 141% to $114.4 million, equal to US
135 cents per share
- Net profit increases 309% to $85.6 million, equal to US 101 cents per
share
- Cash balances rose to $162.4 million
- US 18 cents per share final dividend declared, payable on 6 October 2005,
(2005: US 5 cents). Total 2006 dividend (interim and final) up three-fold
to US 24 cents (2005: US 8 cents)
Strategic
- Everest Mine construction completed with production ahead of schedule,
continuing ramp up into 2007
- Marikana Pool & Share Agreement completed, showing promise at year end
- Mimosa Wedza IV expansion completed, ramping up into 2007
Commenting on the full year results, Stuart Murray, CEO of Aquarius Platinum
said, "The 2006 financial year stands out for great commodity prices, and I am
delighted that once again Aquarius has taken full advantage by benefiting from
significant growth in production.
Our financials are in a strong position: a fourfold increase in net profit has
resulted in the Board declaring a significant increase in the dividend to US 24
cents. Looking to the operations the highlight this year is undoubtedly the
Everest Mine. We have successfully completed ahead of time and below budget
new low cost platinum mine in South Africa. The implementation of the Marikana
P&SA2 was also a major milestone.
Looking to the future, 2007 will see further increases in production as
operation ramp-ups complete. I also believe that at our Kroondal and Marikana
operations there is scope for improvements in our operational performance.
But we are not content to sit back and enjoy the fruits of our labours. It is
not my plan to watch Aquarius become an ex-growth story. Aquarius is about
innovation and we will continue through 2007 to work hard on corporate and
strategic fronts to deliver new growth opportunities."
Aquarius announces consolidated earnings for the year to 30 June 2006 of $85.6
million equal to US 101 cents per share. This represents a 309% increase in
net profit over the previous year. The increase is attributed to a 37%
increase in production to 447,693 PGM ounces and an increase in the average 4E
PGM basket price (Platinum, palladium, rhodium and gold) for the group to
US$932 per ounce in 2006 compared to US$641 per ounce in 2005.
Cash earnings (before depreciation and amortisation) were $114.4 million or
US135 cents per share representing an increase of 141% for cash earnings over
the previous year.
The Directors have declared a final dividend of 18 cents (2005: 5 cents) per
share payable on 6 October 2005 to shareholders registered on 15 September
2006. This brings the total dividend payable for the year ended 30 June 2006
to US 24 cents, an increase of 200% over last year.
Net Profit and Production comparison by half year and full year, Financial
Years 2005 and 2006
1H 2006 2H 2006 FY 2006 FY2005 Change
Net Profit after tax $25.9m $59.7m $85.6m $20.9m 309%
and minorities
PGM Production (4E) 198,426 249,267 447,693 327,669 37%
(ounces)
As outlined in the table above, this year"s performance has shown a stronger
second half of the year as the Group"s expansion program delivered more
production as PGM basket prices increased. The increased production is largely
attributable to the new Everest mine which was commissioned in December 2005.
The Group"s existing operations expect to produce in excess of 600,000 PGM
ounces in FY2007.
Revenues from ordinary activities for the period rose 92% to $426.6 million
(comprising sales revenue of $417.4 million and interest and other income of
$9.2 million) from $223.1 million (sales revenue $210.1 million and interest
and other income of $12.2 million). The increased revenue was due to a 37%
increase in PGM production and a 45% increase in the average PGM basket price
over the year.
Cost of production for the year at $223.1 million was lower at $498 per PGM
ounce from $534 per PGM ounce in FY 2005.
Operating performances at all mines was good with Kroondal, the new Everest
mine and Mimosa contributing the majority of the profits. The performance of
Everest was particularly pleasing with an on mine cash margin of 61%.
Marikana continued its turn around and returned a net profit despite being in
the midst of a transition from an opencast to an underground operation and also
a change of contractor.
The CTRP, despite experiencing problematic feed stock quality issues, delivered
a modest net profit for the period.
Amortisation and depreciation was marginally higher compared to FY 2005 at $29
million from $26 million despite a 37% increase in production. This was due to
lower amortisation and depreciation at Marikana arising from the implementation
of the P&SA2 and reduced production during the start-up phase of the new
contractor. Amortisation and depreciation at Marikana decreased by $9.6m to
$4.7m for the year. Going forward, as the emphasis at Marikana shift to
underground mining a decision has been taken to rehabilitate the portion of the
waste dump that is directly attributable to the open pit operations over a
shorter period consistent with the open pit mining plan. This will reduce the
rehabilitation business risk to the Company, however, this decision will see an
additional R25 million per year charged to the amortisation line of future
income statements of the next four years.
Aquarius incurred net finance charges for the period of $2.1 million,
comprising $8.3 million in interest income and $10.4 million interest expense,
which included a non-cash component of $1.7 million relating to the movement in
the net present value of the Marikana and Kroondal rehabilitation provisions.
Interest expense includes interest paid on pipeline finance advanced from the
smelters.
Aquarius" cash balances of $162 million at 30 June 2006 are expected to
increase progressively (subject to any corporate activity) in line with the
Group"s increased production profile for FY2007 of +600,000 PGM ounces. This
together with the current RMB facility will provide Aquarius with the requisite
funding for any future growth opportunities and for balance sheet optimisation
and for the continued progressive dividends.
Group Financials by Operation
Kroondal Marikana Mimosa CTRP Everest Corporate Total
(1) 50% (2)
PGM ounces 219,722 56,617 71,204 3,119 97,031 - 447,693
(attribu-
table)
Revenue (net 214.3 53.4 70.4 3.3 91.5 6.9 439.8
of FX sales
variance)
Cost of
sales:
On mine cash (87.7) (43.8) (34.3) (1.5) (34.1) - (201.4)
costs
Amortisation (8.2) (4.3) (2.9) (0.3) (5.9) - (21.6)
and
depreciation
Gross profit 118.4 5.3 33.2 1.5 51.5 6.9 216.8
Amortisation (6.3) (0.4) (0.5) - - - (7.2)
of fair
value
Gross profit 112.1 4.9 32.7 1.5 51.5 6.9 209.6
after FVU
Corporate - - - - - (8.0) (8.0)
admin and
other costs
Foreign 0.6 2.0 1.1 - (0.1) (2.7) 0.9
currency
gain/(loss)
Finance - - (1.1) - - (9.3) (10.4)
charges
Profit/ 112.7 6.9 32.7 1.5 51.4 (13.1) 192.1
(loss)
before tax
Tax Expense - - (5.3) - - (45.8) (51.1)
Profit/ 112.7 6.9 27.4 1.5 51.4 (58.9) 141.0
(loss) after
tax
Minority - - - - - (55.4) (55.4)
interest
Profit/ 112.7 6.9 27.4 1.5 51.4 (114.3) 85.6
(loss) after
minority
interest
(1) Marikana results are not comparable to previous periods due to
implementation of the Marikana P&SA in September 2005
(2)Everest mine was transferred to operations on 1st January 2006.
Cash balances
Aquarius Group cash balances increased by $87 million since 30 June 2005 to
$162.4 million at 30 June 2006.
Cash holdings in the group comprise Aquarius Platinum Limited $43 million.
Major factors (other than mine operations) that impacted on the movement in
cash included:
Investec facility AQPSA ($26
million)
RMB facility drawdown AQPSA $27 million
Income tax paid AQPSA/Mimosa ($32
million)
Dividends paid AQP ($9 million)
Interest received Group $8 million
Interest paid Group ($10
million)
Share loan repayments/options AQP $10 million
exercised
Capital expenditure Group ($113
million)
Dividends Received AQP 11.5 million
Group Debt
In October 2005, AQPSA concluded a re-finance of its borrowing facilities which
resulted in a new Corporate facility being established with RMB. The RMB
facility comprises:
- R450 million loan facility (main facility)
- R200 million standby facility
- R50 million guarantee facility
Interest bearing debt:
- In summary, Group interest bearing debt at 30 June 2006 was $41 million
comprising the RMB facility: $27 million and the SavCon long-term debt:
$14 million. The previous facility with Investec and ABSA was repaid in
October 2005.
Financial Year 2006 Rand: US Dollar Exchange Rate
The US Dollar was 10% weaker against the Rand during the year at an average
exchange rate of R6.42 to the US Dollar for the year. This continued to place
the South African operations, particularly Marikana, under pressure. During
the last quarter of the financial year, the US dollar strengthened against the
Rand to close at R7.15to the US Dollar. This shift is positive for earnings.
Cash Costs
Cash costs at Kroondal were R2,565 per PGM ounce inclusive of costs that were
attributable to the development of the P&SA decline development. On an adjusted
basis (as indicated in the table below) cash costs for the year were R2,226 per
PGM ounce, a credible result being 7% higher than costs achieved in the
previous year.
Cash costs per PGM ounce: explanation
FY2006 FY2005 Variance
Cash costs 2,565 2,310 255
P&SA decline development (235) (211) (24)
Grade dilution due to decline (104) (24) (80)
development
Cash costs after adjustments 2,226 2,075 151
Marikana"s performance was characterised by a difficult third quarter which saw
production curtailed by a change of contractor and also unusually high rainfall
during January and February. As a result the cash costs increased in the
second half year from R4,501 per PGM ounce to R4,980 per PGM ounce for the full
year. The present cost profile is not expected to continue as the mine
implements the P&SA2.
The Everest mine continued its ramp up phase during the year with a credible
cost performance of R2,390 per PGM ounce. These costs are expected to improve
further once the mine reaches steady state production.
Operating costs at the Mimosa Mine decreased by 6% to $336 per PGM ounce ($100
per PGM ounce after by-product credits.) The decrease in cash costs is largely
due to above budget production year.
Costs at the CTRP averaged R2,507 per PGM ounce for the year. Operating costs
have trended down during the year averaging R1,721 per PGM ounce in the last
quarter of the year.
Cash Costs at Operations
Rand (4E) per Rand (6E) per Rand 6E per
ounce ounce ounce
Kroondal 2,565 2,111 2,020
(P&SA1)
Marikana 4,980 4,125 3,975
(P&SA2)
Everest 2,390 2,057 1,955
Mimosa US$336 US$310 US$100
CTRP 1,721 1,217 1,176
Platinum Group Metal Prices ($ per ounce)
PGM prices in US Dollar terms continued to perform well during the year.
Platinum, palladium, rhodium and gold all closed the year higher.
Continued long-term supply concerns coupled with short-term supply constraints
out of South Africa saw platinum average $1,017 per ounce over the year,
closing 39% higher at $1,226 per ounce. Palladium, despite greater supply than
platinum, benefited from improved supply transparency and a new market as an
alternative white jewellery metal, averaged $264 per ounce over the year, and
closed 75% higher for the year at $316 per ounce. Rhodium supply was tight due
to limited production. Strong demand from the autocatalyst market (due to
rhodium"s ability to limit nitrogen oxide emissions) put pressure on the price.
Rhodium started the year at $1,920 per ounce and closed 150% higher at $4,800
per ounce. Rhodium reached in excess of $6,000 per ounce in May, averaging a
high $3,373 per ounce for the year. This boosted the PGM basket during the
second half.
2006 Financial Year Platinum, Palladium, Rhodium and Gold Prices ($ per ounce)
The South African PGM basket price averaged 45% higher for the year at US$1,030
per 4PGE ounce driven by a strong rhodium price. In Zimbabwe (where the ratio
of metals is lower in rhodium and higher in palladium), the basket price for
the year averaged 26% higher for the year at US$741 per 4PGE ounce.
2006 Financial Year PGM Basket Prices (4PGE) ($ per ounce)
The PGM (4E) basket (platinum, palladium, rhodium and gold) comprises the
principal revenue driving commodities produced; in addition, economic
quantities of ruthenium, iridium, copper, nickel, cobalt and chromite are also
produced, with revenues used to offset costs. These metals also enjoyed
healthy gains over the year demonstrated in the PGE (6E) basket after by-
product costs detailed in the table above.
FINANCIALS
Aquarius Platinum Limited
Consolidated Income Statement
Year ended 30 June 2006
$"000
Note: Half year ended Year ended
30/06/06 31/12/05 30/6/06 30/6/05
Aquarius PGM 249,267 198,426 447,693 327,669
Production
(attributable
ounces)
Revenue (i) 266,863 159,706 426,569 222,327
Foreign exchange (ii) 15,525 (2,297) 13,228 2,797
gain/(loss)
Cost of Sales (iii) (124,514) (98,550) (223,064) (174,936)
Gross Profit 157,874 58,859 216,733 50,188
Amortisation of fair (iv) (3,437) (3,725) (7,162) (6,745)
value uplift of
mineral properties
Gross profit after 154,437 55,134 209,571 43,443
amortisation of fair
value uplift
Admin & other (v) (6,044) (1,983) (8,027) (5,976)
operating costs
Other FX movements (vi) (294) 1,207 913 484
Finance costs (vii) (8,059) (2,324) (10,383) (9,889)
Profit before tax 140,040 52,034 192,074 28,062
Income tax expense (38,490) (12,581) (51,071) (3,446)
Profit after tax 101,550 39,453 141,003 24,616
Minority interest (viii) (41,835) (13,538) (55,373) (3,666)
Net profit 59,715 25,915 85,630 20,950
EPS (basic - cents) 69.37 31.50 100.87 25.32
Notes on the June 2006 Consolidated Income Statement
- Sales revenue was higher due to increased PGM ounces (120,024 ounces) and
higher PGM basket prices.
- Foreign exchange variances caused by the difference between revenue
recorded at time of production to cash received at the end of the four
month pipeline
- Cost of sales reflects 37% increase in production over previous year
- Amortisation of fair value of mineral properties at Kroondal, Marikana and
Mimosa
- Administration and other costs are higher due to increased corporate
activity, BEE management and finance renegotiation
- Reflects foreign exchange movements on net monetary assets
- Finance costs were higher on SavCon interest expensed following
commissioning of the Everest mine and interest on pipeline finance on
increased production
- Reflects profit of AQPSA attributable to minority interests SavCon
((29.5%) and Implats (20%), totalling 49.5%)
Aquarius Platinum Limited
Consolidated Cash flow Statement
Year ended 30 June 2006
$"000
Half year ended Financial year ended
Note: 30/06/06 31/12/05 30/06/06 30/06/05
Net operating cash (i) 116,830 58,701 175,531 31,458
inflow
Net investing cash (ii) (37,474) (75,406) (112,880) (88,152)
outflow
Net financing cash (iii) 3,666 23,495 27,161 54,921
outflow
Net increase 83,022 6,790 89,812 (1,773)
(decrease) in cash
held
Opening cash balance 84,954 75,251 75,251 77,942
Exchange rate (iv) (5,551) 2,913 (2,638) (918)
movement on cash
Closing cash balance 162,425 84,954 162,425 75,251
Notes on the June 2006 Consolidated Cash flow Statement
- Net operating cash flow includes inflow from operations ($209 million),
tax paid ($32 million) and net finance costs ($2 million).
- Reflects payments for mine development and development costs ($111
million), mine-site rehabilitation ($1.8 million)
- Reflects net proceeds from issue of shares ($7.2 million), net proceeds
from RMB loan and repayment of Investec loan ($27 million), proceeds from
repayment of share plan loans ($2.5 million) and payment of dividends
($9.1 million)
- Reflects movement of Rand against the US Dollar
Aquarius Platinum Limited
Consolidated Balance Sheet
At 30 June 2006
$"000
Financial year ended
Note: 30/06/06 30/06/05
Assets
Cash assets 162,425 75,251
Current receivables (i) 66,721 44,695
Other current assets (ii) 19,828 16,312
Property, plant and equipment (iii) 144,449 137,819
Mining assets (iv) 308,517 271,050
Other non-current assets 6,994 3,365
Total assets 708,934 548,492
Liabilities
Current liabilities (v) 35,463 35,480
Non-current payables (vi) 143,933 150,735
Non-current interest-bearing (vii) 40,846 16,037
liabilities
Other non-current liabilities (viii) 105,419 78,315
Total Liabilities 325,661 280,567
Net assets 383,273 267,925
Equity
Parent entity interest 304,995 235,352
Minority interest 78,278 32,573
Total Equity 383,273 267,925
Notes on the June 2006 Consolidated Balance Sheet
- Reflects debtors receivable on PGM concentrate sales. Increase reflects
debtors from new Kroondal concentrator and Everest mine
- Reflects PGM concentrate inventory
- Reflects Mimosa plant, Marikana plant, Kroondal expansion and Everest
expansion
- Mining assets reflects mine development expenditure on Kroondal, Mimosa,
Marikana and Everest
- Includes tax payable ($2.2 million), creditors ($33.2 million)
- Includes BEE deferred settlement proceeds ($10.5 million) and non interest
bearing portion of AQPSA shareholder debt (Implats $57.6 million) and
SavCon ($71.2 million), lease liability ($4.5 million)
- Includes interest bearing debt payable to RMB ($27 million), SavCon ($14
million)
- Reflects deferred tax liabilities ($73.3 million), provision for closure
costs ($32.1 million)
CORPORATE
Board
Mr Timothy Freshwater has joined the Board of Aquarius Platinum Limited
effective 9th August 2006. Mr Freshwater is a solicitor in the UK and Hong
Kong and has been involved in Asian markets for over 30 years. Mr Freshwater,
Vice Chairman of Goldman Sachs Asia, is also a Director of a number of
companies, including Liu Chong Hing Bank Limited, Pacific Century Insurance
Holdings Limited and Cosco Pacific Limited. He is a member of the board of
directors of the Community Chest of Hong Kong.
Marikana Pool & Share Agreement (P&SA2)
The P&SA2 between AQPSA and Anglo Platinum was retrospectively implemented on
September 22nd 2005. Production from No. 4 shaft, transferred from Kroondal
P&SA came on stream in the second half of the financial year as anticipated.
Contractor dispute with Moolman Mining
AQPSA resiled from the mining contract with Moolman Mining during December 2005
on the basis of a misrepresentation on the part of Moolman Mining when the
mining contract was originally concluded. This misrepresentation became
apparent to AQPSA after the audit, conducted by KPMG during October 2005, into
the rise and fall formula applied in the mining contract.
In the notice of recission, AQPSA advised Moolman Mining that AQPSA would
institute a damages claim in an amount of R963,775,098. A notice was served on
Grinaker LTA on 18 April 2006. Moolman Mining has indicated their intent to
defend the action by serving the applicable notice in law.
Arbitration was initiated by Moolman Mining before AQPSA resiled from the
mining contract. AQPSA launched an application to stay these proceedings.
This application was served on Moolman Mining on 15 May 2006 with them having
in return, served notice of their intention to oppose same.
OPERATIONS
Production
The chart below illustrates the increases in annual production, and the
positive impact enjoyed from the new Everest Mine in 2006.
Aquarius Group Attributable Annual Production (4E PGM ounces)
*From September 2005, AQPSA accounted for the full impact of the P&SA2 at
Marikana.
Production of PGMs attributable to shareholders of Aquarius increased 37% to
447,693 PGM ounces from 327,669 ounces. All mines enjoyed increased
production, with the exception of Marikana where Aquarius" attributable
production was shared following the P&SA2 in September 2005. The P&SA2 is due
to double production and add 10 years additional mine life. The tables below
detail production by operation and then attributable to Aquarius at each
operation, over the four quarters and with annual production compared year on
year.
Production by mine
PGMs Quarter Ended Full Year Ended
Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY 2006 FY 2005 % +/-
Kroondal 115,362 117,175 107,501 99,406 439,444 324,730 35%
Marikana 27,322 20,789 5,810 31,992 85,912 99,161 (9%)
Everest - 7,111 46,081 43,838 97,031 - -
Mimosa 36,368 35,394 33,252 37,395 142,407 130,167 9%
CTRP 1,363 1,533 1,484 1,856 6,234 2,117 194%
Total 180,415 182,002 194,128 214,487 771,028 556,175 39%
Production by mine Attributable to Aquarius
PGMs Quarter Ended Full Year Ended
Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY 2006 FY 2005 % +/-
Kroondal 57,681 58,588 53,751 49,703 219,722 162,365 35%
Marikana 27,322 10,394 2,905 15,996 56,617* 99,161 (43%)
Everest - 7,111 46,081 43,838 97,031* - -
*
Mimosa 18,184 17,697 16,626 18,697 71,204 65,084 9%
CTRP 682 767 742 928 3,119 1,059 194%
Total 103,869 94,557 120,105 129,162 447,693 327,669 37%
* Year on year figures are not comparable due to implementation of the
Marikana P&SA (P&SA2) in Sept 2005
** Everest mine as commissioned in December 2005
Aquarius remains on track to produce its strategic target of 600,000 ounces
attributable to Aquarius. Indeed, the current production profile suggests the
potential to produce up to 700,000 ounces, therefore providing considerable
upside from this year"s production of 447,693 PGM ounces.
In South Africa, the Kroondal P&SA is complete with the project on schedule to
produce 505,000 PGM ounces (50% attributable to Aquarius) per annum, with a
significant life-of-mine extension to 2017.
The Marikana Pool & Share Agreement (P&SA2) was completed in September 2005,
with construction of underground activities progressing well. As Marikana
transforms into an underground focussed operation, the mine is targeting
production of 250,000 PGM ounces a year (50% attributable to Aquarius), with a
significant life-of-mine extension to 2024.
In December 2005, the Everest Mine completed construction and was transferred
to operational status as of 1 January 2006. Production is currently split
between open pit and underground operations. In the 2007 financial year the
operation will move exclusively underground and complete its ramp-up and to
produce an annual average of 225,000 PGM ounces over the project"s 10 year life-
of-mine.
The Chrome Tailing Retreatment Project (CTRP) continues to ramp up production
with improvements towards the year-end suggesting a more positive outlook.
In Zimbabwe, the Mimosa Mine completed the Wedza IV Upgrade expansion,
increasing production capacity to 168,750 PGM ounces from 135,000 PGM ounce
capacity (Aquarius attributable 50%).
Mine production FY2006 and targeted mine and attributable production
PGM (4E) Production Production FY Production Production
ounces FY 2006 2006 Targeted Targeted
(Attributable) (Attributable)
Kroondal 439,444 219,722 505,000 252,500
Marikana 85,912 56,617* 250,000 125,000
Everest 97,031 97,030 225,000 225,000
Mimosa 142,407 71,204 168,750 84,375
CTRP 6,234 3,119 18,000 9,000
Total 771,028 447,693 1,166,750 695,875
* Reflects Marikana P&SA2, effective Q2 2006
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 50.5%)
P&SA1 at Kroondal
Safety
The 12-month rolling average DIIR for the quarter deteriorated to 0.96 from
0.75 in the previous year. By the end of the year Kroondal achieved 1,000,000
fatality-free shifts.
Production
Kroondal achieved record production of 439,444 PGM ounces for the year, an
increase of 35% on the previous year. The P&SA1 expansion was completed and
the mine is capable of production of 505,000 PGM ounces annually.
Kroondal: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
to Aquarius
2006 262,263 128,318 46,663 2,201 439,444 219,722
2005 194,290 93,984 34,916 1,540 324,730 162,365*
2004 143,408 68,223 24,913 1,081 237,625 160,190**
2003 128,811 58,179 21,175 895 209,061 209,061
* Reflects full impact of P&SA (12 months production at 50%)
** Reflects P&SA effective November 2003 (4 months production at 100% & 8
months production at 50%)
Production resulted from 6,041,000 ROM tons: 5,639,000 from underground
operations and 403,000 ROM tons from open pit operations. The head-grade over
the period averaged 5% lower compared to previous year at 2.89g/t.
Improvements in head grade as a result of development are anticipated by the
end of the calendar year. Recoveries were 1% lower at 78%, although these did
see an improvement in the final quarter of the financial year to 79%.
Revenue
The average PGM basket price for the year increased 45% to $1,033 per PGM
ounce. Over the year, however, the PGM basket rose steadily, averaging $1,306
per PGM ounce in the final quarter. This resulted in mine revenue of R2.7
billion for the year (Aquarius share: R1.37 billion). The cash margin for the
year rose to 59%.
Operating Costs
Cash cost per ROM ton increased by 5% to R187 per ton due to higher costs and
lower production. Consequently, cash costs per PGM ounce for the year
increased 11% to R2,565. During the year Kroondal completed considerable
development, costs which are attributed to the profit and loss account and not
capitalised. These costs included in the costs in the table below.
P&SA1 at Kroondal: Operating Costs
Rand 4E per ounce Rand 6E per ounce Rand 6E per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products
(Ni&Cu)
FY 2006 2,565 2,111 2,020
Early indications are that the development investments made at Kroondal in the
second half of the 2006 financial year will start to bear fruit in the next six
months as production output is expected to rise and the associated economies of
scale kick-in.
P&SA2 at Marikana Platinum Mine
Safety
Marikana reported an improved DIIR of 0.31 for the year compared to 0.81 in the
previous year.
Production
Production for the year was 85,912 PGM ounces. This represents a 5% reduction
compared to the 2005 financial year; however, comparisons are not meaningful
because of a change of focus in the mining type and AQPSA resiling from the
previous open pit mining contract in December 2005.
In October 2005, the Marikana Pool & Share Agreement (P&SA2) was completed with
Anglo Platinum and retrospectively implemented to September 2005. Production
from No. 4 shaft at Kroondal was transferred to Marikana, and as anticipated,
resulted in new underground production for Marikana in the second half of the
financial year.
Marikana: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
to Aquarius
2006 52,757 24,461 8,023 671 85,912 56,617*
2005 63,868 26,413 8,061 819 99,161 99,161
2004 57,774 22,598 6,062 742 87,176 87,176
2003 20,042 6,787 1,044 273 28,146 28,146
* Reflects impact of P&SA (effective Q2 2006
Production resulted from 1,250,000 ROM tons from open pit operations. The
average grade over the period was marginally lower at 3.60 g/t, though
recoveries improved to 57% for the year compared to 49% the previous year.
Notably recoveries of 65% were achieved in the second half of the year.
Production resulted from 1,250,000 ROM tons: 1,072,000 from open pit operations
and 178,000 ROM tons from underground operations. Looking forward, it is
anticipated that the balance will shift in favour of lower cost underground
tons. The head-grade over the period averaged 11% lower compared to previous
year at 3.2 g/t. Recoveries improved significantly to average 67%, compared to
the previous year average of 57%. This improvement was particularly marked in
the final quarter of the 2006 financial year, with an average quarterly
recovery rate of 75%.
Revenue
The average PGM basket price for the year increased 41% to $1,007 per PGM
ounce. Over the year, however, the PGM basket rose steadily, averaging $1,275
per PGM ounce in the final quarter. This resulted in mine revenue of R520
million for the year (Aquarius share: R337.4 million). The cash margin for the
year rose to 16% from negative 10% in the 2005 financial year.
Operating Costs
Cash cost per ROM ton increased by to R348 per ton due to lower volumes.
Consequently, cash costs per PGM ounce for the year increased 26% to R4,980.
During the year Marikana underwent considerable change to focus on establishing
and producing from underground operations. This strategy showed promised in
the fourth quarter when operating costs reduced substantially to average R324
per ROM ton, and US$673 per PGM ounce, a 38% and 49% reduction respectively.
Marikana: Operating Costs
Rand (4E) per ounce Rand (6E) per ounce Rand (6E) per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products
(Ni&Cu)
FY 2006 4,980 4,125 3,975
(Average)
Everest Platinum
Safety
During the first six months as an operating mine, Everest reported a DIIR of
0.73. Regrettably on 17th October 2005 an assistant pipe fitter suffered fatal
injuries when he fell from a steel structure eight metres high. The Department
of Minerals and Energy issued its investigation report the following quarter,
concluding that the deceased had failed to secure himself appropriately
although he had been provided with a safety harness and been trained in the use
of a safety harness.
Production
In the six months to June 2006, Everest produced 97,031 PGM ounces.
Everest: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
to Aquarius
2006 56,118 32,108 7,821 984 97,031 97,031
Production resulted from 1,462,000 ROM tons: 471,000 from underground
operations where production is ramping up and 991,000 ROM tons from open pit
operations established as a short-term ore source during operational ramp-up.
The head-grade over the period averaged 3.04g/t. Recoveries were 68% over the
six months, though trending better over the period to 72% in the final quarter.
Revenue
Everest was constructed in record time for a platinum mine and indeed ahead of
Aquarius"s tight schedule and below budget. This rapid development aided by
buoyant PGM prices resulted in Everest being converted to operational status
early, as of 1 January 2005. Consequently, even though Everest"s early
performance has been strong, it should still be recognised in the context of an
operation in the early days of operational ramp up.
The average PGM basket price for the six months was $1,037 per PGM ounce. This
resulted in mine revenue of R550 million for the six months (Aquarius share:
100%). The cash margin for the six months was 61%.
Operating Costs
Cash costs per ROM ton averaged R161 per ton and R2,390 per PGM ounce.
Everest: Operating Costs
Rand (4E) per ounce Rand (6E) per ounce Rand (6E) per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products
(Ni&Cu)
FY 2006 2,390 2,057 1,955
Capital Cost
At year end capital expenditure commitments totalled R672 million with capital
expenditure spent to date of R648 million.
MIMOSA INVESTMENTS (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The DIIR for the year improved marginally to 0.28 from 0.31 for the previous
year.
Production
PGM production for the year increased 8% to 142,407 ounces (Aquarius
attributable 71,204 ounces).
Mimosa: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
to Aquarius
2006 72,232 54,722 5,577 9,876 142,407 71,204
2005 66,742 49,259 5,156 9,010 130,167 65,084
2004 61,422 44,697 5,036 8,234 119,389 59,697
2003 36,029 25,450 2,844 4,717 69,040 34,520
ROM tonnes increased 20% to a milled tonnage of 1,713,000 tons. Marginal
improvements in annual average grade to 3.71g/t and at 78% with increased
production boosted production.
Revenue
The average PGM basket price for the year was 21% higher at $713 per PGM ounce.
This resulted in mine revenue of US$113 million (Aquarius share: 50%). The
cash margin for the year was 64%.
Operating Costs
Cash costs per ounce for the year reduced by 6% to $336 per PGM ounce. After
by-product credits cash costs per ounce were 29% lower at $100 per PGM ounce.
Mimosa: Operating Costs
US$ (4E) per ounce US$ (6E) per ounce US$ (6E) per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products
(Ni&Cu)
FY 2006 336 318 100
Wedza Phase IV Upgrade
The Wedza Phase IV upgrade project was completed and commissioned two months
ahead of target and on budget. Optimisation work in terms of metal recovery
rates is in progress.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD (Aquarius Platinum 50%)
Chromite Tailings Retreatment Plant (CTRP)
Safety
The Plant recorded a DIIR of zero for the year and the previous year.
Production
PGM production for the year increased nearly three-fold to 6,234 PGM ounces
(Aquarius attributable 3,117 PGM ounces).
CTRP: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs (4E) PGMs (4E)
Ended attributable
to Aquarius
2006 3,799 1,378 1,044 13 6,234 3,119
2005 1,321 439 353 4 2,117 1,059
Revenue
The PGM basket price for the year increased by an average 45% to $1,207 per PGM
ounce. Reflecting increased production and basket prices, revenue increased to
R43 million (Aquarius attributable R21.4 million). The cash margin for the
year increased to 63% from 37.5%.
Operations
Over the year recoveries and production improved markedly. During the fourth
quarter, only current arisings from the Kroondal Chrome Mine were fed to the
CTRP. Consistent and stable operation was achieved and recoveries rose to 68%
against 51% in the previous quarter.
A project to add dump material from the Kroondal Chrome Mine to the CTRP feed
is progressing well, and scheduled to complete in August 2007 at a cost of
approximately R2 million. With an increase in feed planned for the 2007
financial year, it is anticipated that PGM production will continue to
increase.
CTRP: Operating Costs
Rand 4E per ounce Rand 6E per ounce Rand 6E per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products
(Ni&Cu)
FY 2006 2,507 1,766 1,730
Statistical 100% of Kroondal P&SA1 Marikana P&SA2 Everest
Information Operation
s
Unit 12 12 12 12 12 12
months months months months months months
Jun June Jun June Jun June
2006 2005 2006 2005 2006 2005
Safety
DIIR Rate/200, 0.96 0.75 0.31 0.81 0.73 -
000 man
hours
Revenue
Gross revenue R m in SA 2,742 1,250 520 364 550 -
/ $m in
Zim
PGM basket $/oz 1,033 711 1,007 713 1,037 -
Price
Gross cash % 59 40 16 (10.0) 61 -
margin
Nickel Price $/lb 7.02 6.92 7.02 6.92 7.02 -
Copper Price $/lb 2.29 1.43 2.29 1.43 2.29 -
Ave R/$ rate 6.37 6.17 6.37 6.17 6.37 -
Cash Costs on-mine
Per ROM ton R/ton 187 177 348 264 161 -
$/ton 29 29 55 43 25 -
Per PGM R/oz 2,565 2,311 4,980 4,035 2,390 -
(3E+Au)
$/oz 403 375 782 654 375 -
Per PGE R/oz 2,111 1,904 4,125 3,393 2,057 -
(5E+Au)
$/oz 331 309 648 620 323 -
Capex
Current/Sustai R"000s 65,673 20,521 8,521 19,362 7,108 -
ning 100%
$"000s 10,309 3,326 1,338 3,138 1,116 -
Expansion 100% R"000s 66,732 462,37 81,321 - 391,97 -
4 2
$"000s 10,476 74,939 12,766 - 61,532 -
Mining Processed
Underground ROM ton 5,639 3,974 178 - 471 -
`000s
Open Pit ROM ton 403 266 1,072 1,515 991 -
`000s
Total ROM ton 6,041 4,240 1,250 1,515 1,462 -
`000s
Grade
Plant Head g/t PGM 2.89 3.04 3.20 3.60 3.04 -
Recoveries % 78 79 67.00 57 68 -
PGM Production
Platinum Ozs 262,26 194,29 52,757 63,868 56,118 -
3 0
Palladium Ozs 128,31 93,984 24,461 26,413 32,108 -
8
Rhodium Ozs 46,663 34,916 8,023 8,061 7,821 -
Gold Ozs 2,201 1,540 671 819 984 -
Total PGM Ozs 439,44 324,73 85,912 99,161 97,031 -
(3E+Au) 4 0
Total PGE Ozs 534,06 394,22 103,61 117,90 112,71 -
(5E+Au) 9 2 5 8 7
Base Metals Production
Nickel Tons 435 314 146 133 138 -
Copper Tons 191 141 84 73 74 -
Chromite (000) Tons 447 461 135 247 - -
`000s
Statistical 100% of Mimosa CTRP
Information Operation
s
Unit 12 12 12 12
months months months months
Jun 2006 June Jun 2006 June
2005 2005
Safety
DIIR Rate/200, 0.28 0.31 0 0
000 man
hours
Revenue
Gross revenue R m in SA 113 84 42.5 8.5
/ $m in
Zim
PGM basket Price $/oz 713 590 1,207 834
Gross cash margin % 64 60 63 37.5
Nickel Price $/lb 6.64 6.51 7.02 7.41
Copper Price $/lb 2 1 229 1.53
Ave R/$ rate - - 6.37 6.29
Cash Costs on-mine
Per ROM ton R/ton - - 96 86
$/ton 31 33 15 14
Per PGM (3E+Au) R/oz - - 2,507 2,308
$/oz 336 357 394 367
Per PGE (5E+Au) R/oz - - 1,766 1,660
$/oz 318 339 277 264
Capex
Current/Sustaining R"000s - - 950 -
100%
$"000s 7,999 13,672 149 -
Expansion 100% R"000s - 23,122
$"000s 10,471 1,108 - 3,676
Mining Processed
Underground ROM ton 1,713 1,432
`000s
Open Pit ROM ton - -
`000s
Total ROM ton 1,713 1,432 162 56
`000s
Grade
Plant Head g/t PGM 3.71 3.69 3.21 2.71
Recoveries % 78 77 40 42
PGM Production
Platinum Ozs 72,232 66,742 3,799 1,321
Palladium Ozs 54,722 49,259 1,378 439
Rhodium Ozs 5,577 5,156 1,044 353
Gold Ozs 9,876 9,010 13 4
Total PGM (3E+Au) Ozs 142,407 130,167 6,234 2,117
Total PGE (5E+Au) Ozs - - 8,851 2,940
Base Metals Production
Nickel Tons 1,958 1,895 4 1
Copper Tons 1,638 1,563 2 2
Chromite (000) Tons (Cobalt (Cobalt - -
`000s 59) 56)
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
Timothy Freshwater Non-executive
Edward Haslam Non-executive
Sir William Purves Non-executive (Senior Independent Director)
Patrick Quirk Non-executive
Zwelakhe Sisulu Non-executive
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
AQPSA Management
Stuart Murray Executive Chairman
Gert Ackerman Managing Director
Ayanda Khumalo Finance Director
Anton Wheeler Operations Director
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
Issued Capital
At 30 June 2006, the Company had on issue:
84,348,225 fully paid common shares
2,343,105 unlisted options
Substantial Shareholders 30 June Number of Percentage
2006 Shares
Impala Platinum Holdings Ltd 7,127,276 8.63
Nutraco Nominees Limited 5,242,250 6.25
National Nominees Limited 4,541,671 5.42
Broker (LSE) Broker (ASX) Sponsor (JSE)
Evolution Securities Euroz Securities Investec Bank Limited
Ltd Level 14, The Quadrant 100 Grayston Drive
100 Wood Street 1 William Street, Sandown Sandton 2196
London EC2V 7AN Perth WA 6000
Telephone: Telephone: Telephone:
+44 (0)20 7071 4330 +61 (0)8 9488 1400 +27 (0)11 286 7326
Facsimile: Facsimile: Facsimile:
+44 (0)20 7071 4451 +61 (0)8 9488 1478 +27 (0)11 291 1066
Aquarius Platinum (South Africa) (Proprietary) Ltd
50.5% Owned
(Incorporated in the Republic of South Africa)
Registration Number 2000/000341/07
Block A, 1st Floor, The Great Wall Group Building
5 Skeen Boulevard, Bedfordview 2007
South Africa
P O Box 1282
Bedfordview 2009
South Africa
Telephone: +27 (0)11 455 2050
Facsimile: +27 (0)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, WA 6151,
Australia
PO Box 485
South Perth, WA 6151
Australia
Telephone: +61 (0)8 9367 5211
Facsimile: +61 (0)8 9367 5233
Email: info@aquariusplatinum.com
For further information, please contact:
In Australia:
Willi Boehm
Aquarius Platinum Corporate Services Pty Ltd
+61 (0)8 9367 5211
In United Kingdom:
Nick Bias
BuckBias Limited
+ 44 (0)7887 920 530
Alex Buck
BuckBias Limited
+44 (0)7392 740 452
In South Africa:
Stuart Murray
Aquarius Platinum (South Platinum) (Pty) Ltd
+27 (0)11 455 2050
or visit: www.aquariusplatinum.com
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
CTRP Chromite Ore Tailings Retreatment Operation
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 (1g/t = 1 part per
million)
JORC code Australasian code for reporting of Mineral Resources and Ore
Reserves
JSE JSE Limited
Kroondal Kroondal Platinum Mine or P&SA1 at Kroondal
LHD Load Haul Dump machine
Marikana Marikana Platinum Mine or P&SA2 at Marikana
Mimosa Mimosa Mining Company (Private) Limited
NOSA National Occupational Safety Association
PGE(s) (6E) Platinum Group Elements plus Gold. Five metallic elements
commonly found together which constitute the platinoids
(excluding Os (osmium)). These are Pt (platinum), Pd
(palladium), Rh (rhodium), Ru (ruthenium), Ir (iridium) plus Au
(gold)
PGM(s) (4E) Platinum Group Metals plus Gold. Aquarius reports the PGMs as
comprising Pt+Pd+Rh plus Au (gold) with the Pt, Pd and Rh being
the most economic platinoids 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 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
Date: 10/08/2006 10:50:26 AM Produced by the JSE SENS Department
