| Thu 25 Jan 2007, 9:00 | | AQP - Aquarius Platinum Limited - Quarterly result |
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AQP
AQP
AQP - Aquarius Platinum Limited - Quarterly results
Aquarius Platinum Limited
(Incorporated in Bermuda)
Registration Number: EC26290
Share Code JSE: AQP
ISIN Code: BMG0440M1029
("Aquarius Platinum")
Aquarius Platinum (isin bmg0440M1029) Second Quarter 2007 Financial Year
Production results
P&SA2 at Marikana Comes of Age
Highlights of the Quarter
Production by mine 232,668 PGM ounces, Aquarius attributable 136,928 PGM ounces
Approved new order conversion of Kroondal, Marikana and Everest mining rights
Announced buy-back acquisition of 3.5% of South African subsidiary from BEE
partners
P&SA1 at Kroondal
Production 117,189 PGM ounces (Aquarius attributable: 58,594 PGM ounces)
Primary development increased by 12% to improve face availability and mining
flexibility due to challenging geology at No. 3 Shaft
New K5 Shaft on budget and first reef tons produced one month ahead of plan
Firm commodity prices buoy quarterly gross cash margin at 64%
P&SA2 at Marikana
Production increased 27% to 39,077 PGM ounces (Aquarius attributable: 19,538 PGM
ounces)
Underground ramp-up advances accounting for 37% of total tons
DMS plant commissioned and already improving operational performance and
flexibility
Gross cash margin for the quarter increased to 50% from 43% in the previous
quarter
Everest
Production steady at 41,191 PGM ounces
Underground ramp-up continues accounting for 75% of total tons, despite
contractor labour challenges
Ramp up to complete during second half, with full production output targeted for
first quarter FY 2008
Gross cash margin for the quarter 56%
Mimosa
Planned shutdown coupled with primary mill breakdown reduced production to
33,345 PGM ounces (Aquarius attributable: 16,672 PGM ounces)
Wedza Phase IV optimisation completed and Phase V expansion to 190,000 PGM
ounces announced
Mining production on track, with 7 week stockpile on surface (following plant
shutdowns)
Gross cash margin at 68%, reflecting a strong financial performance despite
lower production
CTRP
Production increased to 1,866 PGM ounces (Aquarius attributable: 933 PGM ounces)
Significant increase in feed achieved, with focus now on achieving higher
recoveries and production
Gross cash margin for the quarter at 77%
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said, "The
second quarter has delivered us some new challenges as we have focused on mine
development for longer-term benefits, in order to continue to deliver production
in to the sustained high commodity prices.
In South Africa, production at AQPSA increased 2%. This modest increase masks
the strong turnaround being enjoyed at Marikana, and is a fair performance given
the considerable development ongoing at Kroondal and Everest. In Zimbabwe, both
planned and unplanned plant shut downs resulted in lower quarterly production,
yet the mining operations are in particular on a stronger footing going forward,
and the mills are hungry to process a sizeable surface stockpile.
Marikana deserves a special mention this quarter, for completion of its DMS
plant and the ongoing and improving performance of all the mining teams there.
Aquarius Platinum Quarterly PGM Production (Attributable)
Production by Mine
PGMs (4E) Quarter Ended
Mar 2006 Jun 2006 Sep 2006 Dec 2006
Kroondal 107,501 99,406 121,713 117,189
Marikana 5,810 31,992 30,865 39,077
Everest 46,081 43,838 41,717 41,191
Mimosa 33,252 37,395 42,733 33,345
CTRP 1,484 1,856 1,711 1,866
Total 194,128 214,487 238,739 232,668
Production by Mine Attributable to Aquarius
PGMs (4E) Quarter Ended
Mar 2006 Jun 2006 Sep 2006 Dec 2006
Kroondal 53,751 49,703 60,856 58,594
Marikana 2,905 15,996 15,432 19,538
Everest 46,081 43,838 41,717 41,191
Mimosa 16,626 18,697 21,367 16,672
CTRP 742 928 855 933
Total 120,105 129,162 140,227 136,928
Metals Prices and Foreign Exchange
Commodity prices through the quarter remained firm consolidating on strong gains
realised over calendar 2006. The chart below illustrates the individual prices
for platinum, palladium, rhodium and gold. Platinum prices peaked in November
at over $1,300 per ounce on news of the possible introduction of a platinum
exchange traded fund (ETF) and closed the quarter at $1,119 per ounce. The
rhodium price was strong towards the quarter end, closing for the quarter at
$5,550 per ounce due to continued physical demand. Gold and palladium enjoyed
modest increases over the quarter of 4% and 6% respectively.
Platinum Group Metal Prices (Dollar per PGM ounce)
The table below details the individual basket prices achieved at each operation
calculated using a four-element PGM ounce (platinum, palladium, rhodium and
gold). All operations continued to benefit from strong basket prices, broadly
in line with the two previous quarters.
Average PGM basket prices achieved at Aquarius operations: US$ per PGM ounce
(4E)
Basket Prices (Financial Year Quarters)
Mar 2006 Jul 2006 Sep 2006 Dec 2006
Kroondal 1,064 1,306 1,311 1,287
Marikana 1,028 1,275 1,283 1,270
Everest 964 1,162 1,199 1,179
Mimosa 750 854 958 934
CTRP 1,276 1,449 1,622 1,592
The Rand basket price at South African operations averaged R9,315 per PGM ounce
over the quarter, flat when compared with the previous quarter. In Dollar
terms, this is equal to $1,266 per PGM ounce. In Zimbabwe, the Dollar basket
price averaged $939 per PGM ounce. In addition, by-product base metals copper
and nickel recorded strong prices at Mimosa, with copper averaging 1% higher at
$3.42/lb and nickel averaging 34% higher at $13.03/lb over the quarter.
Platinum Group Metal Basket Prices (Dollar and Rand per PGM ounce)
The South African Rand weakened against the US Dollar over the quarter, however,
averaging 7.36, which was 4% weaker than the average in the first quarter. This
had a positive impact on the Rand PGM basket price, trading much of the second
quarter above R9,000 per PGM ounce, and in November breaking though R10,000 per
PGM for a short period.
South African Rand: Dollar
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 50.5%)
P&SA 1 at Kroondal
Safety
The 12-month rolling average DIIR for the quarter improved to 0.93 from 1.02 in
the previous quarter. Kroondal achieved 1,777,521 fatality-free shifts up to the
end of the quarter.
Mining
Open pit production increased to 147,089 tons, underground production decreased
to 1,513,610 tons
Primary development increased by 12% to improve face-availability and mining
flexibility
K5 Project remains ahead of schedule
Head grade stable at 2.85g/t
Processing
Plant processed 1.7 million tons
Production decreased 4% to 117,189 PGM ounces
Concentrator recoveries stable at 77%
P&SA1 at Kroondal PGM Production & Rand Cash Costs per PGM Ounce
Revenue
Revenue at Kroondal increased 1% to R963 million for the quarter (Aquarius
share: R481 million). The increased total Rand revenue was due to the positive
impact of a weakening in the average Rand Dollar exchange rate of 4% in the
quarter which offset lower PGM production and a 2% reduction in the Dollar
basket price to $1,287 per PGM ounce. The cash margin for the quarter was
virtually unchanged at 64% compared to 65% in the previous quarter (65%).
Operations
Production totalled 1,658,754 tons. Open pit production increased 1% to 147,089
tons and underground production decreased by 8% to 1,513,610 tons. During the
quarter, production was adversely impacted by excessive downtime on trackless
mechanised mining machinery due to breakdowns. To rectify this situation,
Murray & Roberts Cementation, the underground mining contractor, subsequently
recruited additional personnel and revised maintenance, replacement and rebuild
programmes. In addition, of the four operating shafts at Kroondal, the No. 3
and East Shafts encountered some geological losses due to potholing. A surface
drilling programme was initiated during the quarter to upgrade the geological
model and help improve planning going forward.
Tons processed declined by 2% to 1,657,967 tons, which included 107,374 tons of
opencast.
Over the quarter, stockpiles increased marginally to 100,000 tons at the end of
the quarter, in preparation for the Christmas close and to mitigate the Q3
holiday impact.
The head grade was flat at 2.85g/t. compared to 2.86g/t previous quarter.
It is anticipated that the high rate of development that has been ongoing at
Kroondal, will decrease in the next quarter and that this should result in a
positive effect on the head grade and unit cost.
Plant recoveries decreased by 1% to 77% as a result of the relatively poor
quality of opencast ore processed.
PGM production decreased by 4% to 117,189 PGM oz (Aquarius attributable: 58,594
PGM ounces).
Kroondal: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs PGMs
ended attributable
to Aquarius
Dec 2006 70,522 33,748 12,295 624 117,189 58,594
Sep 2006 73,239 35,166 12,679 629 121,713 60,856
Jun 2006 59,057 29,194 10,649 506 99,406 49,703
Mar 2006 64,248 31,372 11,342 539 107,501 53,751
Operating Cash Costs
Cash costs increased by 7% to R211 per ROM ton reflecting both lower volumes and
an increase in primary development and infrastructure costs. Consequently, cash
costs per PGM ounce for the quarter increased by 8% to R2,982.
Kroondal: Operating Cash Costs
4E (Pt+Pd+Rh+Au) 6E 6E net of by-
(Pt+Pd+Rh+Ir+Ru+Au) products (Ni&Cu)
Kroondal R 2,982 per PGM R 2,453 per PGE R 2,294 per PGE
ounce ounce ounce
Operating cash costs include ledging and primary development costs of R429 per
PGM ounce (up 42% on the previous quarter), secondary development costs of R75
per PGM ounce (up 108% on previous quarter) and engineering infrastructure costs
of R243 per PGM ounce (up 7% on previous quarter). Cash cost of stoping for
Kroondal were R2,235 per PGM ounce, a 2% increase compared to the previous
quarter. It should also be noted that operating costs also include costs
associated with the new K5 shaft of R122 per PGM ounce. The K5 Shaft is in a
ramp-up phase and therefore attracts high relative unit costs at this stage.
Kroondal Operating Cash Costs Reconciliation
Rand per PGM ounce Q1 (Sep Q2 (Dec Variance
2006) 2006)
Cash costs 2,982 2,754 -8%
Ledging and primary (429) (302) -42%
development costs
Secondary development costs (75) (36) -108%
Engineering infrastructure (243) (227) -7%
costs
Cash cost after adjustments 2,235 2,189 -2%
It is expected that the unit costs will start to decrease. In the next quarter
it is anticipated that primary development will reduce, followed by reduction in
equipping and engineering infrastructure in the subsequent quarter. Ensuring
adequate face availability and mining flexibility at Kroondal is key to the
longer-term management of the mine and while development has taken time the
benefits are now expected to be realised.
Project Capital Expenditure
During the quarter R93 million was spent on capital on belt extensions and
infrastructure improvements.
K5 Project at Kroondal
Mining
The appointed contractor Deilmann-Haniel (SA) (Pty) Ltd is performing
satisfactorily.
During the quarter a total of 541 metres of development was completed. With the
two main declines already on the reef horizon, the new `R1` chair-lift decline
began construction, completing a total 41 metres in the quarter. The
excavations to transfer ore from the reef horizon to the main belt (known as ore
passes) were completed and civil construction due to start in January 2007 has
commenced. The No 1 ventilation shaft excavation started on schedule.
Construction
Construction both on surface and underground continued satisfactorily. The
conveyors to the reef horizon were commissioned on schedule. Construction of
the rail-loading facility commenced during the quarter.
Capital Cost
Of the budget of R131.1 million, R106.2 million has been committed at the end of
the quarter.
P&SA2 at Marikana
Safety
The 12-month rolling average DIIR for the quarter deteriorated to 0.43 from 0.21
in the previous quarter as a result of four lost-time accidents. Codes and
procedures have been reviewed and amended with the workforce being re-trained
accordingly.
Mining
Underground production for the quarter increased 11% to 188,901 tons
Open pit production for the quarter increased 13% to 383,342 tons
By quarter-end, the stockpile increased by 18% to 196,000 tons
Processing
Marikana Dense Media Separation Plant commissioned
A record 542,091 ROM tons were processed during the quarter
Marginal 1% fall in recoveries to 69% due to a higher feed of oxidised opencast
material
Production increased 27% to 39,077 PGM ounces (Aquarius attributable: 19,538 PGM
ounces)
P&SA2 at Marikana PGM Production & Rand Cash Costs per PGM Ounce
Revenue
The PGM basket price for the quarter averaged $1,270 per PGM ounce, 1% lower
than the previous quarter. Despite this, a growth in volumes, an increase of
production, and a weaker average Rand Dollar exchange rate of 7.36 resulted in a
27% increase in mine revenue to R324 million for the quarter (AQPSA share R162
million. The cash margin for the quarter rose to 50% from 43%.
Operations
Total production increased 12% to 572,243 ROM tons for the quarter, with one
third coming from underground production and two thirds from open pit.
Open pit production increased by 13% to 383,342 tons. The opencast mining
contractor, MCC Mining (Pty) Ltd, is performing well and is managing costs
effectively as both efficiencies and output have improved since their
appointment. Production in Marikana Pit B was accelerated to facilitate a box
cut for the construction of a second decline shaft, an expedient way to access
the underground ore from the opencast operations. Stormwater controls and
additional pumping capacity have been established to prepare for the local rain-
season in the third quarter.
Underground production increased by 11% to 188,901 tons. At No. 1 Shaft, 465
metres of primary development was completed. A hybrid-mining method was
successfully implemented. This has resulted in a reduced stoping-width, thereby
contributing to an increase in the plant head grade. At No. 4 Shaft 972 metres
of primary development was completed during the quarter. Some potholes were
encountered in the main decline ends. Infill drilling is being undertaken to
determine the extent of the geological disturbance, resulting in a short delay
in tonnage build up. Preparation of the high wall at No. 2 Shaft was completed
and development of the twin-decline system has commenced.
The stockpile (predominantly comprising oxidised material) increased by 18% to
196,000 tons at the end of the quarter.
A total of 542,091 tons were processed during the quarter, a 22% increase. Of
this, 202,391 tons were from underground, a 44% increase and 339,700 tons from
opencast, an 11% increase.
The plant head grade improved by 6% to 3.26 g/t from 3.07 g/t. Plant recoveries
decreased marginally by 1% to 69% as a result of the additional open material in
the mix.
PGM production increased by 27% to 39,077 PGM ounces (Aquarius attributable:
19,538 PGM ounces).
Marikana: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs PGMs
ended attributable
to Aquarius
Dec 2006 23,627 11,218 3,941 291 39,077 19,538
Sep 2006 18,588 8,944 3,098 235 30,865 15,432
Jun 2006 19,036 9,531 3,162 263 31,992 15,996
Mar 2006 3,591 1,642 534 43 5,810 2,905
Operating Cash Costs
Cash cost per ROM ton decreased by 9% to R299 per ROM ton from increased
production volumes generated by underground stoping activities versus
development in the previous quarter.
Marikana: Operating Costs
4E (Pt+Pd+Rh+Au) 6E 6E net of by-
(Pt+Pd+Rh+Ir+Ru+Au) products (Ni&Cu)
Marikana R 4,147 per PGM R 3,402 per PGE R 3,141 per PGE
ounce ounce ounce
The cash cost per PGM ounce decreased by 12% to R4,147 per PGM ounce.
Development costs, which form part of the cash costs per PGM ounce reduced by
22% from the previous quarter to R431 per PGM ounce. Deducting the development
cost, the reefing and stoping costs achieved a milestone, breaking below R4,000
at R3,716 per PGM ounce.
Marikana Pool & Share Agreement (P&SA2)
The Dense Media Separation (DMS) Plant was successfully commissioned during the
quarter. This resulted in an increase in throughput. Further ramp-up and
optimisation will continue.
During the quarter expansion capital expenditure of R46 million was incurred.
The total expansion capital expenditure to date is R99 million (AQPSA share:
49.5 million).
Contractor dispute with Moolman Mining
Moolman Mining was the primary opencast mining contractor employed at the
Marikana Mine from start up in May 2002 until December 2005. In December 2005,
AQPSA resiled from the contract with Moolman Mining on discovering
misrepresentations by Moolman which induced the contract. Moolman has been
replaced by MCC as opencast contractor and MCC has since improved production
from the opencast mine significantly at no additional cost over the disputed
Moolmans contract rates.
In April 2006, AQPSA instituted action against Moolman arising from the
misrepresentation. The action includes a damages component. In May 2006, AQPSA
served an application to stay the arbitration in respect of the Rise and Fall
claim pending the determination of the action. In September 2006, AQPSA
received Moolmans` response in the application to stay the arbitration as well
as a plea to the action. Moolmans delivered a conditional counterclaim,
comprising four components in an aggregate amount of ZAR472 million. The AQPSA
legal team is in the process of preparing a reply in the application proceedings
and a plea to the conditional counterclaims. During the course of this process,
AQPSA has requested further documentation from Moolmans relating to the Marikana
contract. The process of finalising the replying affidavit and inspection of
documents continues and is expected to be finalised in the 3rd Quarter of the
2007 financial year.
It is anticipated that legal proceedings relating to the dispute may take years
to resolve.
Everest Platinum Mine
Safety
The 12-month rolling DIIR improved to 0.52 from 0.95 in the previous quarter,
with no lost-time injuries during November and December. Safety initiatives
during the period focussed on fall-of-ground prevention and materials handling.
Mining
Underground ore production increased substantially, up 51% to 487,114 tons
Opencast operations production fell in favour of underground production to
163,130 tons
Opencast mining extended through development of the South-West Pit adding
320,000 tons to the opencast reserve
Processing
Plant processed 656,386 tons, an 8% increase compared to the previous quarter
Recoveries fell to 70% from 72% in the previous quarter
Production decreased by 1% to 41,191 PGM ounces
Everest PGM Production & Rand Cash Costs per PGM Ounce
Revenue
Revenue at Everest increased 5% to R334 million for the quarter. The increase
in revenue was due to a weaker average Rand Dollar exchange rate which offset
lower production and a 2% decrease in the average PGM basket price for the
quarter to $1,179 per PGM ounce. The cash margin for the quarter fell to 56%.
Operations
Operational ramp-up continued, with opencast and underground producing a total
650,244 tons, a 6% increase compared to the previous quarter, with the
production balance now firmly shifting towards underground operations, now
producing three quarters of all production compared to just over half in the
previous quarter.
In line with the shift towards more favourable underground production, opencast
mining declined to 163,130 tons. As the North Pit was depleted, the opencast
reserve was boosted through the establishment of an extension at the South-West
Pit, adding an additional 320,000 tons to the opencast reserve. The opencast
ROM grade fell significantly from the previous quarter with more production
coming from the low-grade area in the North Pit and shallow oxidised reef from
the South-West Pit extension. It is anticipated that opencast grades will
improve during the next quarter as mining extends into the deeper areas of the
South-West pit yielding more competent reef. The opencast mining contractor
(MCC Mining) continues to perform well. Opencast unit costs increased as a
result of the lower production and the initial high stripping ratio in the
South-
West Pit extension.
On-reef decline development and the establishment of stoping sections continued
during the quarter, resulting in a 51% increase in underground tonnages to
487,114 tons, a significant improvement from the previous quarter by the
underground mining contractor, Shaft Sinkers Mining (Pty) Ltd. There was no
recurrence of the industrial relations issues which affected output during the
previous quarter and production showed consistent growth through the quarter.
The underground head grade improved slightly from the previous quarter as the
mining extended into thicker reef areas resulting in less dilution.
Although the percentage of underground feed increased to 74%, the grade and
recovery benefit was outweighed by the low opencast grades, with the plant head
grade falling to 2.79 g/t from 2.98 g/t.
Concentrator throughput was 656,386 tons milled for the period, with 6,142 tons
consumed from the stockpile, which fell to 13,743 tons at the end of the
quarter.
Metallurgical recoveries were adversely affected by the reduction in grade and
the oxidised opencast material, dropping to 70% from 72%. Advanced flotation
process control systems were implemented towards the end of the quarter and a
reduction in oxidised material will result in improved recoveries during the
next quarter.
Production fell 1% to 41,191 PGM ounces for the quarter.
Everest: Metal in concentrate produced (PGM ounces)
Quarter Pt Pd Rh Au PGMs (4E)
ended
Dec 06 23,495 13,484 3,838 374 41,191
Sep 06 23,459 14,140 3,697 421 41,717
Jun 06 24,699 14,844 3,817 478 43,838
Mar 06 27,257 14,913 3,472 439 46,081
Operating Cash Costs
Cash costs increased by 18% to R224 per ROM ton milled as a result of the higher
consumption of underground production, which has not yet achieved steady-state
and the unit cost increase from higher opencast stripping ratios during the
establishment of the South-West Pit. Consequently, cash costs per PGM ounce for
the quarter increased by 23% to R3,573 per PGM ounce. Of this cost increase
R292 per PGM ounce can be attributed to a lower grade and recovery and R230 per
PGM ounce to an increase in labour and mobile mining equipment that was brought
in earlier to facilitate and secure the underground ramp-up. The higher
opencast stripping ratio contributed a further increase in cost of R152 per PGM
ounce.
It is anticipated that unit costs will reduce as the underground volumes ramp up
to steady-state production and metallurgical recovery and head grade
improvements are realised.
Everest Operating Costs
4E (Pt+Pd+Rh+Au) 6E 6E net of by-
(Pt+Pd+Rh+Ir+Ru+Au) products (Ni&Cu)
Everest R3,573* per PGM R 3,011 per PGE R 2,814 per PGE
ounce ounce ounce
*Included in the cash cost is IFRIC-4 (determining whether an arrangement
contains a lease) for R129 per PGM ounce.
MIMOSA INVESTMENTS (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The 12-month rolling average DIIR deteriorated to 0.52 for the quarter from 0.26
in the previous quarter. Regrettably, a fatality occurred during the quarter
when an Underground Team Leader was fatally injured by a fall of ground.
Mining
Wedza Phase IV Expansion Project completed and Phase V Expansion Project
announced
Underground production lost the gains achieved in first quarter, falling to
447,605 tons
The surface stockpile increased by 33% to 308,383 tons at quarter-end, despite
plant shutdowns
Processing
Plant shutdown for maintenance coupled with mill breakdown reduced tons
processed to 365,177 tons as the surface stockpile increased
Concentrator plant recoveries fell 1% to 77%
Total mine production decreased 22% to 33,345 PGM ounces due to maintenance
shutdowns
Mimosa Mine PGM Production and $ Cash Cost per PGM Ounce (Including 12 month
rolling-average)
Revenue
The PGM basket price for the quarter decreased 2% to $939 per PGM ounce. The
average nickel price over the quarter rose by 34% to $13.03 per pound from $9.71
per pound in the previous quarter. Together with a contribution from base
metals of approximately 33% of gross revenue, sales revenue for the quarter
totalled $44.3 million, a decrease of $2.8 million when compared to the previous
quarter. The gross cash margin decreased to 68% from 76% in the previous
quarter.
Operations
During the quarter mining operations hoisted 456,740 tons compared to 497,487
tons in the previous quarter. Tons milled during the quarter totalled 365,177
tons, with the balance going to the stockpile, which totaled 308,383 tons at the
quarter end.
The average plant head grade improved to 3.67 g/t, compared to 3.64 g/t in the
previous quarter. During November, the plant underwent a planned major
maintenance shut down, resulting in a budgeted 10% production shortfall over the
previous quarter. In addition, in October the plant suffered an unplanned mill
breakdown due to a bearing failure, which had been scheduled to be changed
concurrently with the November planned maintenance shut down. This resulted in
an unbudgeted 15% shortfall against planned production. While the lost time
resulted in a build up of the stockpile and ultimately lost production, the
plant is now operating at capacity, and no shutdowns or maintenance stoppages
are envisaged for the second half of the year.
Recoveries decreased by 1% in the quarter to 77%.
Due to the concentrator plant shut down, PGM production during the second
quarter decreased to 33,345 ounces (Aquarius attributable: 16,673 ounces).
Mimosa: PGMs in concentrate produced (ounces)
Quarter Pt Pd Rh Au PGMs PGMs
ended attributable
to Aquarius
Dec 2006 16,810 12,856 1,316 2,363 33,345 16,672
Sep 2006 21,613 16,486 1,671 2,963 42,733 21,367
Jun 2006 18,904 14,417 1,475 2,599 37,395 18,697
Mar 2006 16,820 12,809 1,306 2,317 33,252 16,626
Mimosa: Base Metals in concentrate produced (tons)
Mine Production Attributable to Aquarius
Quarter Ni Cu Co Ni Cu Co
ended
Dec 2006 449 377 14 225 189 7
Sep 2006 574 475 18 287 238 9
Jun 2006 506 423 15 253 211 7
Mar 2006 452 383 14 226 191 7
Operating Cash Costs
Cash costs for the quarter increased to $446 per PGM ounce, a 25% increase
compared to the previous quarter`s figure of $356 per PGM ounce. The increase
in cash costs was attributable to high Zimbabwe dollar denominated costs, mainly
due to disparity between inflation rate and exchange rate and low production
throughput due to the plant shutdown.
Net of by-products, however, cash costs were negative at -$52 per PGM ounce, a
significant windfall, even compared to $11 per PGM ounce in the previous
quarter.
Mimosa Operating Costs
4E 6E 4E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu& Co)
Mimosa $446 per PGM $421 per PGE ounce ($52) per PGE ounce
ounce
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%)
Safety
The DIIR is zero. No Lost-Time Accidents have occurred since the project
commenced.
Processing
Material processed increased 68% to 44,000 tons
Recoveries decreased to 38%
Production increased 9% to 1,866 PGM ounces
CTRP PGM Production & Rand Cash Costs per PGM Ounce
Revenue
The PGM basket price for the quarter decreased 2% to $1,592 per PGM ounce, which
despite a weaker Rand Dollar exchange rate and higher production, resulted in R1
million fall in revenue to R17 million (Aquarius attributable: R8.5 million).
The cash margin, though still high, fell for the quarter to 77% compared to 79%
in the previous quarter.
Operations
The dump material project successfully commissioned at the end of the first
quarter resulted in a 68% increase in tons processed to 44,000 tons. The ROM
grade improved from 3.33g/t to 4.49g/t. While a substantial improvement, this
resulted in lower recoveries of 38% due to oxidization of dump materials,
yielding 1,866 PGM ounces. (Aquarius attributable: 933 PGM ounces). A project
to reconfigure of the flotation circuit has commenced to improve recoveries.
Operating Costs
Cash costs decreased by 3% to R2,143 per PGM ounce. The decrease in cost is a
result of higher volumes.
4E (Pt+Pd+Rh+Au) 6E 6E net of by-
(Pt+Pd+Rh+Ir+Ru+Au) products
CTRP R2,143 per PGM R1,459 per PGE R1,384 per PGE
ounce ounce ounce
CORPORATE MATTERS
Development of Prospective Platinum Properties in South Africa with Bakgaga
Mining (Pty) Ltd
In October 2006 Aquarius announced the signing of a farm-in agreement between
its wholly owned subsidiary Aquarius Platinum (SA) Corporate Services (Pty) Ltd
and Bakgaga Mining (Pty) Ltd to drill and conduct feasibility work at
prospective Platinum Group Metals (PGMs) bearing properties on South Africa`s
Bushveld.
An initial site investigation was undertaken during September 2006 with
subsequent field mapping during October 2006. Historical exploration data for
the farms adjacent to the farms in the Bakgaga Project areas was obtained in
December 2006.
This data is currently being evaluated to determine the exploration programme
going forward.
Appointment of New Broker
On 13th December, Aquarius announced the appointment of Investec Bank (UK)
Limited and Morgan Stanley & Co International Limited as joint corporate brokers
to Aquarius Platinum on the London Stock Exchange.
Further Expansion in Production Announced at Mimosa
Subsequent to the end of the quarter, on 9th January 2007, Aquarius announced an
approved low capital cost expansion to increase annual production capacity to
195,000 PGM ounces (100,000 platinum ounces in concentrate) at the Mimosa
Platinum Mine in Zimbabwe.
The expansion project, known as "Wedza Phase V", follows four earlier successful
expansion projects at Mimosa and is expected to increase annual PGM production
from 168,750 PGM ounces to 195,000 PGM ounces. The increase in mining will come
from the South Hill ore body where current operations are based, increasing
throughput by 17% from 150,000 tons to 175,000 tons milled per month. The
expansion will not have an impact on day-to-day operations, or have any material
impact on the life-of-mine.
Total capital cost of the expansion, which has an estimated payback period of
twenty-four months, is forecast at $23.2 million. It will be funded from
retained cash flows at Mimosa level.
Conversion of Mining Licenses to New Order Rights
On 24th October 2006 Aquarius announced that the South African Department of
Minerals and Energy (DME) approved AQPSA`s applications for the new order mining
rights conversions in respect of all three of its mines: Kroondal, Marikana and
Everest. Consequently, AQPSA is now in full compliance with the South African
Mineral and Petroleum Resources Development Act 2002, having exceeded the
requirement for 26% Black Economic Empowerment ownership by 2014.
Aquarius purchases 3.5% of South African subsidiary from SavCon
On 7th November, Aquarius announced that an agreement was reached with Black
Empowerment partner SavCon for the acquisition by AQP of a 3.5% equity interest
in AQPSA from SavCon for a cash consideration of R342.5 million. The
transaction represented a partial implementation of the final phase of the Black
Economic Empowerment transaction approved by shareholders in Special General
Meeting on 11 October 2004 and increased AQP`s equity interest in AQPSA from
50.5% to 54%. Implementation requires South African DME approval as per section
9 of the AQPSA`s converted mining rights.
Agreement with Bakgaga Mining
On 23rd October 2006 Aquarius announced that through its wholly owned subsidiary
Aquarius Platinum (SA) Corporate Services (Pty) Ltd ("ASACS") that it signed a
farm-in agreement with Bakgaga Mining (Pty) Ltd to drill and conduct feasibility
work at prospective Platinum Group Metals (PGMs) bearing properties on South
Africa`s Bushveld.
More information on all the corporate matters can be found at
www.aquariusplatinum.com
Statistical Information: Kroondal P&SA1
Statistical Information: Marikana P&SA2
Statistical Information: Everest
Statistical Information: Mimosa
Note: Cash Cost Per ROM ton calculated using milled tonnage
Statistical Information: Chrome Tailings Retreatment Plant
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
Patrick Quirk Non-executive
Zwelakhe Sisulu Non-executive
Kofi Morna Alternate to Zwelakhe Sisulu
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 2006, the Company had on issue:
84,575,558 fully paid common shares and 2,020,320 unlisted options
Substantial Shareholders 31 Number of Percentage
December 2006 Shares
Impala Platinum Holdings Ltd 7,127,276 8.43
Nutraco Nominees Limited 5,877,403 6.95
Trading Information
ISIN number BMG0440M1029
Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE)
Morgan Stanley & Co Euroz Securities Investec Bank Limited
International Limited Level 14, The Quadrant 100 Grayston Drive
20 Cabot Square 1 William Street Sandown
Canary Wharf Perth WA 6000 Sandton 2196
London, E14 4QW
Telephone: Telephone: Telephone:
+44 (0) 20 7425 8000 +61 (0)8 9488 1400 +27 (0)11 286 7326
Facsimile: Facsimile: Facsimile:
+44 (0)20 7425 8990 +61 (0)8 9488 1478 +27 (0)11 291 1066
Investec Securities
Limited
Investec Bank (UK) Limited
2 Gresham Street
London, EC2V 7QP
Telephone:
+44 (0)20 7597 5970
Facsimile:
+44 (0)20 75975120
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
South Africa 2007
P O Box 1282
Bedfordview South Africa 2009
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
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
Abraham (Rudi) Rudolph 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
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
DME South African Government Department of Minerals and Energy
DMS Dense Media Separation
Dollar or $ United States Dollar
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), Ivanhoe Nickel and Platinum Limited 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
SavCon The Savannah Consortium. The principal Black Empowerment Investor
in Aquarius Platinum
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
Z$ Zimbabwe Dollar
A comprehensive announcement is available on the company`s website.
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
Charmane Russell
Russell & Associates
+27 (0)11 880 3924
or visit: www.aquariusplatinum.com
Date: 25/01/2007 09:00:02 Produced by the JSE SENS Department.
