Editor's Pick: Markets: Metal prices bolster FTSE 100
(AQP.L) Aquarius Platinum Ltd Buy/Sell
365.85
+20.20
(5.84%)
Add to portfolio
Set Alert
Level 2
Desktop Trader
News
|
(PRN)
2009-10-27 07:01
Aquarius Platinum - 1st Quarter 2010 Financial & Production Results |
|---|
| Previous | Next | All news for this company |
| Article layout: raw |
|
Aquarius Platinum: First Quarter 2010 Financial & Production Results Highlights of the Quarter Attributable production of 96,500 PGM ounces PGM Dollar prices improved through quarter Gross "cash" profit for the quarter of $18.6 million Net profit for the quarter was $9.5 million after $3.2 million "once off" costs associated with the Ridge acquisition and after $3.4 million movement on the convertible bond Ridge Mining plc acquisition successfully completed Re-establishment of Everest Mine on track Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said "While production and hence costs were negatively affected by unprotected industrial action at the Kroondal and Marikana mines, the underlying performance of these operations remained stable. The attributable loss of approximately 16,000 ounces due the industrial action is in line with previous guidance given. Dollar metal prices continued to show resilience, with a 6% increase in the PGM Dollar basket price during the quarter. That said, the continuing strength of the Rand, and rising input costs (most notably of electricity) will continue to place margins in the South African platinum industry under pressure. "The Ridge Mining acquisition was completed during the quarter, and these operations have now been firmly integrated within the AQPSA management structures. We expect these operations to add modest growth to existing operations in the short to medium term, while presenting a prospective growth profile in the longer term. Good progress has been made with the re-establishment of Everest; although a decision on when to resume mining operations will only be made when market circumstances are more favourable. "Despite market turmoil, Rand strength and the "industrial action season" in South Africa, Aquarius remains cash positive, with a strong balance sheet and $195 million in cash. We will continue to seek further growth opportunities and are well-positioned to do so in an industry that is cash-strapped and under pressure." P&SA1 at Kroondal PGM production of 88,808 PGM ounces (44,404 PGM ounces attributable to Aquarius) Production affected by unprotected industrial action One million fatality free shifts achieved on 21 August Firstplats transaction effective, extends Kroondal life-of-mine in excess of one year Cash margin for the quarter of 19% P&SA2 at Marikana PGM production of 31,222 PGM ounces (15,611 PGM ounces attributable to Aquarius) Production affected by unprotected industrial action and open pit pothole intersection Firstplats transaction effective, extends Marikana life-of-mine in excess of two years Cash margin for the quarter of -8% Everest Re-establishment project on track Excavation of North decline portal complete; decline development ready to commence Department of Minerals and Resources (DMR) original mine suspension order (Section 54 notice) fully lifted Mimosa PGM production 50,828 PGM ounces (25,414 PGM ounces attributable to Aquarius). Cash margin for the quarter of 36%
CTRP PGM production of 1,740 PGM ounces (870 PGM ounces attributable to Aquarius) Effective cash margin of 42% Platinum Mile PGM production of 5,932 PGM ounces (2,966 PGM ounces attributable to Aquarius) Milling expansion yielding anticipated results Effective cash margin of 34% Blue Ridge Fully integrated into AQPSA operational management Mining ramp-up and concentrator commissioning in progress PGM production of 14,469 PGM ounces (7,235 PGM ounces attributable to Aquarius) Revenues and operating expenditure capitalised Production by mine
PGMs (4E)
Production by mine attributable to Aquarius
PGMs (4E)
CTRP 892 793 845 870
Metals prices and exchange rate US Dollar prices increased across all PGM metals with palladium (16%) and rhodium (14%) recording the largest price increases. Platinum closed the quarter up 5% at $1,230 per PGM ounce. Platinum has now traded above $1,200 per ounce since 2 August, trading at a quarterly high of $1,339 per ounce on 16 September. Strong jewellery demand in China continues to mitigate reduced demand from the auto industry. Rhodium increased by 14% to average $1,603 per ounce for the quarter. The metal broke out of the $1,500 band on 23 July and traded above $1,600 through to the end of the quarter, closing at $1,650 per ounce. Palladium closed the quarter up by 18% at $294 per ounce and has now increased by 55% from its January 2009 price, assisted by increased exchange traded fund (ETF) activity. Average PGM basket prices achieved at Aquarius operations: US$ per PGM ounce (4E)
Consequently, PGM basket prices in US Dollars strengthened at all operations, with the average group basket price being 6% higher at $931 per ounce compared to the previous quarter. The average basket price at the South African operations was $981 per PGM ounce, equivalent to R7,744 per PGM ounce at an average exchange rate for the period of R7.89:$1. The Rand maintained its strength against the US Dollar during the quarter, with the average Rand-Dollar exchange rate appreciating by 8% to R7.89. The Rand closed the quarter at R7.42 to the US Dollar. Financials Consolidated earnings for the quarter ended 30 September 2009 showed a net profit of $9.5 million (US 2 cents per share). Net cash profit for the quarter was $18.7 million. This is a significant improvement on the previous corresponding quarter (September 2008) when a net loss of $21.5 million was recorded due largely to the impact of significant negative sales adjustments caused by falling prices. This quarter's results reflect reduced volatility in PGM prices, which have gradually risen from the low base experienced in October-December 2008. The full upside of the price recovery was contained by a strengthening of the Rand. Revenue for the quarter was $85.8 million and is inclusive of positive sales adjustments of $8.2 million due to the flow-through of improved PGM prices experienced during the quarter. The stability and recovery in PGM prices has seen an end to the abnormally high sales adjustments experienced in the December 2008 half year. Table A: Aquarius attributable production and net profit summary by quarter
ounces)
& Unrealised
derivative liability
the Ridge acquisition*
outside equity Interests
Production for the quarter was a credible 96,500 PGM ounces (including 7,235 PGM ounces from the Blue Ridge mine that was acquired from Ridge Mining in July 2009), given the disruption to operations caused by the unprotected industrial action of the employees of the underground mining contractor, Murray and Roberts Cementation (MRC) at Kroondal and Marikana. Approximately 16,000 PGM ounces of attributable production were lost due to the strike, with some impact extending into the initial part of the next quarter. Management measures, such as working additional shifts, are being implemented to recover the production lost during the course of the financial year. Consequently, reductions in unit costs did not materialise at Kroondal and Marikana. Although management plans were implemented to mitigate the impact of the industrial action, unit costs at both operations rose. The quarter also carried the full electricity tariff increase effected in June 2009, as well as higher seasonal tariffs, resulting in a 44% increase in electricity cost (despite lower consumption due to industrial action). Unit costs at Mimosa were relatively stable. Operating costs at Blue Ridge will continue to be capitalised during the ramp-up phase. As a result of reduced revenue and higher unit costs at the South African operations, margins declined for the quarter, returning a gross profit of $9.4 million. Looking to the next quarter, production costs will continue to be under pressure with increased electricity costs, wage increases implemented and a strong Rand. A return to normalised production levels should, however, result in a decrease in unit costs. Administration and other costs of $6 million included the $3.2 million "once off" costs relating to the acquisition of Ridge Mining, reported in accordance with IFRS business combination standard. Finance charges of $5.1 million for the quarter were lower as a result of the repayment of the bridge facility of $177 million in May 2009. Included in finance charges was interest expensed of $2.9 million on group debt, non-cash accretion of the convertible note $0.8 million and unwinding of the rehabilitation provision of $1.3 million. Depreciation and amortisation were in line at $9.0 million. Fair value movement in embedded derivative component of convertible bond As the convertible bond was issued in Rand and the functional currency of Aquarius is US Dollars, the convertible note represents a financial exposure. The embedded derivative portion of this convertible note is required to be measured at fair value with any movement recognised through the income statement. The derivative was fair valued at 30 September resulting in an income statement charge of $3.4million. Cash Group cash balances increased by $41 million to $194.7 million partly due to the exercise of the Ridge Mining warrants and options by Zijin ($7.8 million) and Imbani ($28 million) which were subsequently swapped for shares in Aquarius. Net operating cash flow for the quarter comprised $84.7 million from sales, $58.2 million paid to suppliers and net finance expenses of $1.6 million. Material cash flow items (other than mine operations) that affected cash balances during the quarter included capital expenditure of $10.5 million. Group cash at 30 September 2009 was held as follows:
Ridge Mining $ 10 million
(attributable ounces)
derivative liability
Notes on the September 2009 Consolidated Income Statement Revenue for the quarter was lower as a function of reduced production in South Africa and a lower Rand basket price given the 8% appreciation of the Rand against the US Dollar Cost of sales per PGM ounce increased as a result of higher electricity charges and reduced production in South Africa due to unprotected industrial action during the quarter Administration and other costs of $6 million included $3.2 million "once off" costs relating to the acquisition of Ridge Mining, pursuant to IFRS business combination standard Gain largely attributable to positive revaluation adjustments on intergroup debt Relates to the movement in the fair value of the derivative component of R650 million ($78 million) convertible bond issued during May 2009 Finance costs include group debt ($2.9 million), non-cash interest accretion on the convertible note ($0.8 million) and unwinding of the rehabilitation provision ($1.3 million). Minority interests no longer apply following conclusion of the final phase of the BEE flip in October 2008.
Notes on the September 2009 Consolidated Cash flow Statement Net operating cash flow for the September quarter includes $84.7 million inflow from sales, $58.2 million paid to suppliers and net finance income of $1.6 million. Includes development and plant and equipment expenditure of $10.5 million. Includes exercise of Ridge options $39.7 million and net movement in borrowings $6.0 million
2009
Assets
Liabilities
Equity
Notes on the September 2009 Consolidated Balance Sheet Reflects debtors receivable on PGM concentrate sales Reflects PGM concentrate inventory, reef stockpiles and consumables stores Represents plant and equipment within the Group Mining assets reflects Kroondal, Marikana, Mimosa, Everest and Ridge mining (mining rights) Platinum Mile Resources acquisition Includes recoverable portion of rehabilitation provision from P&SA partner ($12.2 million), investment in rehabilitation trust ($12.6 million) and investments in unlisted entities ($2.8 million) Includes trade creditor and other payables. Includes rehabilitation obligations on P&SA1 and P&SA2 structures. Includes convertible note liability ($73.5 million), derivative liability ($9.5 million), Ridge group loans ($35.5 million) and other loans (1.6 million). Reflects deferred tax liabilities $106.6 million, provision for closure costs $69.3 million. AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 100%) P&SA 1 at Kroondal Safety The 12-month rolling average disabling injury incidence rate (DIIR) for the quarter improved to 0.66 per 200,000 hours worked from 0.74 in the previous quarter. Only five lost-time injuries were reported during the quarter, a 50% improvement in the number of lost-time injuries compared with the previous quarter. Kroondal Mine was recognised for achieving one million fatality free shifts on 21 August 2009. Mining Operations at Kroondal were significantly impacted by unprotected industrial action by employees of the underground mining contractor, MRC, which resulted in the eventual dismissal of the workforce. The underground mining contract at the K5 shaft was successfully transferred from Redpath Mining to MRC to consolidate operations under one contractor, albeit with some production lost during the process Production tonnes for the quarter decreased by 16% to 1,365,911 tonnes Head grade improved marginally from 2.58 g/t to 2.63 g/t Processing Tonnes processed decreased by 18 % to 1,323,505 tonnes Recoveries increased by 0.2% to 79.1% PGM production decreased by 16 % to 88,808 PGM ounces Revenue The Kroondal Dollar-denominated basket price improved by 6% to an average of $972 per PGM ounce. The improvement was, however, offset by Rand strength, and resulted in the Kroondal Rand-denominated basket weakening by 2.7% compared with the previous quarter. Pricing stability contributed to lower PGM sales adjustments, which reduced from R113 million in Q4 (2009) to R58 million in Q1 (2010). The decrease in production, the lower Rand basket price and decreased PGM sales, negatively affected revenue for the quarter, which decreased by 23% to R638 million (R319 million attributable to Aquarius). Operations The underground mining contract at the K5 shaft was successfully transferred from Redpath to MRC during the quarter. The contract transfer was motivated by operational and equipment synergies that could be realised, benefiting the K5 shaft in terms of production and cost improvements. Although the transfer process proceeded according to plan, it did result in lower production during the handover. Unprotected industrial action by employees of the underground mining contractor, MRC on three of the Kroondal shafts during September 2009, had a significant impact on production. This unprotected industrial action, which eventually resulted in a mass dismissal of the workforce, took place despite a wage settlement of 10.2% having been agreed between MRC and the National Union of Mineworkers (NUM). Disruptive and intimidatory action by former employees prevented effective recruitment from the dismissed employee base, requiring a greater component of those recruited to be new employees, thus delaying the engagement, training and deployment plan. The above factors resulted in on-reef stoping square metres mined decreasing by 24% and primary development decreasing by 8% during the quarter. Primary development for the quarter was 1,683 metres. Sweepings increased by 137% from the previous quarter and tonness produced decreased by 16% to 1,365,911tonnes for the quarter (ROM tonnage excludes 34,797 tonnes transferred to Marikana). Planned maintenance was performed on the K1 ball mill girth gear at the beginning of the quarter, while down-time as a result of the strike was used to undertake the relining of the primary and secondary mills of the K2 concentrator. Processed tonnes decreased by 18% to 1,323,505 tonnes with stockpiles at the end of the quarter totalling 57,116 tonnes. Grade control initiatives increased the head grade by 2%, resulting in an average grade of 2.63g/t for the quarter despite a 7% decrease in the in situ grade. This was primarily due to a reduction in footwall waste and waste off-reef mining being packed underground. Recoveries also increased marginally to 79.1% due to improvement initiatives in operational stability and control. PGM production decreased by 16% to 88,808 PGM ounces (44,404 ounces attributable to Aquarius). Kroondal: Metal in concentrate produced (PGM ounces)
Operating cash costs Extensive management plans were implemented to mitigate the impact of the industrial action but cash costs per tonne increased by 16% to R392 and costs per PGM ounce increased by 13% to R5,847 as a result of the decrease in production. The quarter also carried the full electricity tariff increase of June 2009 as well as higher seasonal tariffs, resulting in a 44% increase in electricity cost despite lower consumption. Costs associated with the relining activities were also expensed during the quarter. As a result of reduced revenue and higher unit costs, Kroondal Mine achieved a lower cash margin for the period of 19% compared with 34% in the previous quarter. Kroondal: Operating cash costs per ounce
Capital expenditure Capital expenditure for the quarter was R30 million, all stay-in-business capital. Major items included the establishment of underground infrastructure. This is a 57% reduction against the previous quarter, primarily due to cash curtailment during the strike period. The capital expenditure required to maintain production levels has been spent, however, and is up to date. Firstplats transaction The Firstplats transaction was concluded during the quarter, resulting in a pro-rata addition of 0.46 million ounces of reserves into the P&SA1, thereby extending the life-of-mine of Kroondal in excess of one year. The additional reserves are down-dip of central shaft and will be mined from existing shaft infrastructure requiring only stay-in-business capital expenditure and enabling cost efficient ore extraction (refer to the Corporate matter section for a more detailed description of the transaction). P&SA2 at Marikana Safety The 12-month rolling average DIIR for the quarter deteriorated to 1.26 per 200,000 hours worked from 0.91 in the previous quarter. Five lost-time injuries were reported during the quarter. This deterioration is cause for concern and management measures have been implemented to reverse this trend. Mining Underground operations at Marikana were significantly affected by unprotected industrial action by MRC employees which resulted in the eventual dismissal of the workforce Open-pit production and costs were affected by the pothole intersection reported in the previous quarter Production tonnes increased by 0.15% to 551,944 tonnes, comprising 335,988 tonnes from underground and 216,006 tonnes from open-pit operations Head grade decreased by 5% to 2.60 g/t due to the increase in underground tonnes Processing Tonnes processed decreased by 10% to 557,668 tonnes Recoveries decreased by 3% to 67% PGM production decreased by 17% to 31,222 ounces (15,611 ounces attributable to Aquarius) Revenue The Dollar-denominated Marikana basket price averaged $999 per PGM ounce, 7.7% higher than the previous quarter, while the Rand-Dollar exchange rate averaged R7.89 for the quarter. This resulted in the Marikana Rand-denominated basket price decreasing by 1.4% against the previous quarter. Pricing stability also contributed to lower PGM sales adjustments, which reduced from R50.1 million in Q4 (2009) to R26.7 million in Q1 (2010). Quarterly revenue at Marikana decreased by 26% to R229 million (R115 million attributable to Aquarius) on the basis of lower production and a weaker basket price. Operations The quarter was significantly affected by the unprotected industrial action of the employees of the underground mining contractor, MRC on both of the Marikana shafts during September 2009. This unprotected industrial action took place despite a wage settlement of 10.2% having been agreed between MRC and the NUM, which eventually resulted in a mass dismissal of the workforce. As at Kroondal, disruptive and intimidatory action by former employees prevented effective recruitment from the dismissed employee base, requiring a greater component of those recruited to be new employees which delayed the engagement, training and deployment plan. At both the No.1 and No.4 shafts, the focus remained on primary development and redevelopment to negate the effect of a high incidence of potholing and geological features. Primary development reduced by 10% from the previous quarter, and re-development was 20% lower as a result of the industrial action. The amount of mining currently done adjacent to potholes has negatively influenced the in-situ grade, leading to a much lower grade being mined. This was exacerbated by the focus on development after the industrial action, resulting in lower grades due to higher than normal waste contribution. The grade is expected to improve as stoping tonnes increase and panels move away from pothole areas. Underground production increased by 6% from the previous quarter to 335,988 tonnes (tonnage includes 34,797 tonnes transferred from Kroondal). Open-pit mining was affected by a significant pothole intersection in the ROM pit as identified during the previous quarter. Infill drilling was completed, confirming a reserve loss of approximately 170,000 tonnes due to thin reef in the pothole area. Establishment of the West-West pit was expedited in order to mitigate the production loss, with a 41% increase in the volume of waste bulk cubic metres moved during the period. The lower reef yield from the ROM pit and the establishment of the West-West pit resulted in the stripping ratio increasing to 28:1 during the quarter. This influenced the open-pit production cost, which increased by 19%, despite open-pit production decreasing by 8% to 216,006 tonnes on a quarter-on-quarter basis. The West-West Pit yielded predominantly shallow material and the production emphasis is to access lower mining levels for "fresh" reef which will become available in the next quarter. Processed tonnes for the quarter were much lower due to ore availability resulting in oxide material being processed to maintain production. Volumes processed totalled 557,669 tonnes, 10% down on the previous quarter. The head grade decreased by 5% to 2.60g/t due to the change in mining mix and lower-than-expected grade from underground as a result of geological anomalies. Recoveries were also 3% lower at 67% compared with the previous quarter, primarily due to the oxide material and shallow material arising from the West-West pit. PGM production for the quarter decreased by 17% to 31,222 PGM ounces (15,611 PGM ounces attributable to Aquarius). Marikana: Metal in concentrate produced (PGM ounces)
Operating cash costs Cash costs per tonne increased by 12% to R442, while costs per PGM ounce increased by 22% to R7,899, a result of the production constraints of both the open pit and underground operations. The changes made to the open pit profile to negate the issues relating to ground conditions repeatedly filtered through to the open pit cost profile. The industrial action in September and subsequent loss in production from underground operations had a negative impact on unit costs. With the low output from the mining operations, the process plant could not be optimized, which in turn had a negative impact on the process plant and other fixed costs. Gross revenue decreased by 26% to R229 million as a result of lower production and the strengthening of the Rand-Dollar exchange rate. As a result, Marikana Mine shows a negative cash margin for the period of 8%. Marikana: Operating cash costs per ounce
Capital expenditure Stay-in-business capital expenditure totalled R15.4 million, a reduction of 19%. This consisted primarily of underground infrastructure establishment. All critical capital expenditure is up to date. Firstplats transaction The Firstplats transaction was concluded during the quarter, resulting in an addition of 0.54 million ounces of reserves into the P&SA 2, thereby extending Marikana's life-of-mine in excess of two years. The additional reserves are contiguous to 1 and 4 shafts and will preclude the need for longer term vertical shafts, thereby very significantly reducing the life-of-mine capital requirement. (Refer to the Corporate matter section for a more detailed description of the transaction) Contractor dispute with Moolman Mining During March 2009, AQPSA and Moolman Mining agreed that the dispute relating to AQPSA resiling from the contract originally concluded between AQPSA and Moolman Mining on the basis of misrepresentation by Moolman Mining and Moolman Mining's conditional counter claims, would be referred to trial and would not be subject to arbitration. As a result, the original arbitration instituted by Moolman Mining against AQPSA relating to the application of the rise and fall formula in that contract, will be indefinitely suspended pending the outcome of the trial proceedings. This agreement was made an order of court with the consent of both parties and provisional dates in September 2010 have been allocated for the trial. Everest Mine The DMR has removed the original suspension instruction (section 54 notice) which was issued after the suspension of operations at Everest, allowing normal mining operations to resume. Phase 1 of the re-establishment project commenced in June 2009 with the excavation of the North box cut, storm water earthworks, the installation of temporary services and an access road. The North box cut excavation was completed at the end of the quarter. The mining team is in the process of supporting the high wall following which the development of the three declines will begin. The South box cut will be excavated during quarter 2 with the single end development planned to begin towards the end of the quarter. Phase 1 was specifically scoped to be completed in the period before the start of the rainy season and the decline shafts are planned to hole with the current mine in May 2010. Compilation of the detail engineering designs associated with Phase 2 is in process, and preliminary capital budget estimates (CBE) are being finalised. The capital requirement for the entire project (including Phase 1) will be approximately R259 million. The project includes the establishment of permanent underground services, the reclamation of infrastructure, the equipping of declines and strike sections and the re-establishment of stoping sections. Permanent surface infrastructure, such as mine services, roads and overland conveyers, will also be completed during this phase. This preparation, coupled with early production from the open pit operation, will enable ramp-up of underground production, with reef stockpiling prior to resumption of milling operations. Completion of Phase 2 and production ramp-up to process plant resumption will require approximately 10 months. Project execution is proceeding as anticipated to place Everest in a state of readiness to resume operations. The decision to resume operations will, however, be made in the context of prevailing metals prices and market conditions at the time. MIMOSA INVESTMENTS (Aquarius Platinum 50%) Mimosa Platinum Mine Safety The 12-month rolling average DIIR for the quarter remained stable at 0.10 from the previous quarter. Two lost-time injuries were recorded during the quarter. Mining Underground production increased by 3% to 539,475 tonnes Head grade decreased slightly by 0.28% to 3.59g/t The surface stockpile decreased to a total 196,075 tonnes at the end of the quarter, equivalent to almost one-month mill feed Processing Concentrator plant recoveries increased to 76.3% from 75.3% Total mine production increased by 8% to 50,828 PGM ounces (Aquarius share: 25,414 PGM ounces) Revenue The average achieved PGM basket price for the quarter increased by 7% to $805 per PGM ounce. The average achieved nickel price over the quarter increased by 42% to $6.86 per pound from $4.84 per pound the previous quarter. Revenue for the quarter increased to $44.2 million, with base metals accounting for approximately 25% of revenue. The cash margin increased to 36% from 28% in the previous quarter, mainly due to the firming of metal prices. Operations During the quarter mining operations hoisted 539,475 tonnes compared to 525,682 tonnes in the previous quarter. Tonnes milled during the quarter totalled 576,616 tonnes, with 37,141 tonnes being taken from the stockpile, which totalled 196,075 tonnes at the quarter end. The average plant grade decreased marginally to 3.59g/t, compared to 3.60g/t in the previous quarter. Tonnes processed totalled 576,616, a 7% increase compared to the previous quarter. Recoveries for the quarter increased slightly to 76.3% from 75.3%. PGM production during the quarter increased by 8% to 50,828 ounces (25,414 ounces attributable to Aquarius). Mimosa: PGMs in concentrate produced (ounces)
Mimosa: Base metals in concentrate produced (tons)
Operating cash costs Cash costs per ROM tonne remained static at $49, while costs per PGM ounce declined slightly to $561. The gross cash margin increased to 36% from 28% in the previous quarter mainly due to the firming of PGM basket prices. Net of by-products, cash costs were $318 per PGM ounce, compared with $379 per PGM ounce in the previous quarter, primarily due to a rise in the prices of base metals. Mimosa operating cash costs per ounce
Update on foreign currency regime in Zimbabwe Since the introduction of the use of multi-currencies in the economy in January 2009, there have not been any changes in the foreign currency environment. The US Dollar and the South African Rand remain the most widely used currencies in the economy. Any changes to the foreign currency environment that may come will be announced in the 2010 Fiscal Budget expected during the second quarter.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%) Safety The DIIR remained at 0. Processing Material processed decreased marginally to 68,894 tonnes Grade remained stable at 2.20g/t Recoveries increased by 14% to 36% Production increased to 1,740 PGM ounces (870 PGM ounces attributable to Aquarius) Revenue The achieved mine basket price for the quarter averaged $1,074 per PGM ounce, 8% higher than the previous quarter. The achieved mine Rand-Dollar exchange rate averaged R7.89/$ for the quarter. Operations Material processed decreased to 68,894 tonnes. This was due to the repositioning of the reclamation facilities on the chrome dump source. The head grade remained stable at 2.20g/t. Recoveries increased by 16% to 36%. This resulted in production being up 3% to 1,740 PGM ounces (Aquarius attributable: 870 PGM ounces). CTRP: Metal in concentrate produced (PGM ounces)
Operating costs Cash costs increased by 26% to R3,380 per PGM ounce. This is mainly attributable to maintenance on the Deswik mill. The cash margin for the period was 42%, a decrease from 49% in the previous quarter. CTRP Operating cash costs per ounce
Platinum Mile (Aquarius Platinum 50%) Safety The DIIR was zero for the quarter.
Processing Tailings processed totalled 1,977 million tonnes which was consistent with the 2,101 million tonnes processed in the previous quarter PGM grade was 0.69g/t, an increase of 17% on the previous quarter Milling expansion yielding anticipated results Production was 5,932 PGM ounces (2,966 PGM ounces attributable to Aquarius) Revenue The achieved mine basket price for the quarter averaged $1,004 per PGM ounce, 8% higher than the previous quarter, and together with improved production results, helped to increase revenue by 33%. The achieved mine Rand-Dollar exchange rate averaged R7.78/$ for the quarter. Quarterly revenue increased by 33% to R40 million (Aquarius attributable: R20 million). Operations Production levels increased by 32% during the quarter. The completion of the milling expansion is now yielding the anticipated results. Full monthly production rates were achieved during September 2009. During the quarter the feed head grade increased to 0.69g/t compared to 0.59g/t the previous quarter. Recoveries increased to 14% compared to 11% in the previous quarter. As a result, production increased 32% to 5,932 PGM ounces (Aquarius attributable: 2,966 ounces). Target production at Platinum Mile remains 35,000 ounces per annum. A table of monthly production statistics indicating the improved recoveries follows, illustrating the achievement of the milling expansion benefits. Platinum Mile: Monthly tonnes and recoveries
Platinum Mile: Metal in concentrate produced (PGM ounces)
Operating costs Cash costs increased 13% to R3,157 per PGM ounce, largely as a result of the increase in power costs from Eskom. Platinum Mile operating cash costs per ounce
Capital expenditure Capital expenditure for the quarter was R1.5 million. The expansion and fine milling project is now complete and within the budget of R59 million. Blue Ridge Platinum Safety The 12-month rolling average DIIR for the quarter deteriorated to 0.47 from 0.32 in the previous quarter. Five lost-time injuries were reported during the quarter. Mining Underground operations produced 191,968 tonnes during the period Head grade averaged 2.58g/t Stockpiles at the end of the quarter totalled 279,832 tonnes Processing Tonnes processed for the quarter was 269,008 tons Recoveries of 76.6% were achieved at the end of the period 14,469 PGM ounces were produced Revenue The achieved mine basket price for the quarter averaged $970 per PGM ounce with a Rand/Dollar exchange rate of R7.90/$ for the quarter. Consequently revenue was R102 million for the quarter (Aquarius attributable: R51 million). All revenue is off-set (capitalised) against the project cost, therefore no revenue is recognised in the income statement. Operations Development totalled 2,591 metres for the period with the decline and level development performing to target. Equipping of the main conveyor decline is on track with installation of all services completed on schedule. Underground mining progressed well during the quarter with 191,968 tonnes being produced. Underground mining is ramping up as planned and no significant geological or mining problems have been experienced. Stoping teams are being recruited and trained as stoping panels are being made available by the development teams. The restructuring of the operation to reduce the fixed cost base was finalised and the retrenchment of excess services employees was completed at the end of the quarter. The plant commissioning experienced interruptions during the commissioning phase and 269,008 tonnes were processed during the quarter. These interruptions are normal during the commissioning phase, and process plant availability and stability is expected to improve. A steady ramp-up in tonnage throughput is anticipated in the next quarter. Concentrator throughput in the quarter was supported by stockpile consumption as planned.Stockpiles at the end of the quarter were 279,832 tons, consisting predominantly of previously mined development material. The head grade averaged 2.58g/t for the quarter, influenced by the consumption of lower-grade development stockpile material. PGM production was 14,469 PGM ounces (Aquarius attributable: 7,235 ounces). Blue Ridge: Metal in concentrate produced (PGM ounces)
Operating cash costs Operating costs will continue to be capitalised during the ramp-up phase. Gross revenue increased by 400% to R102 million, principally as a result of the increase in ounce production. Capital expenditure Capital expenditure for the quarter was R27 million, mainly on the completion of capital projects e.g. an 3MVA power line, service water dams, critical spares for the plant and increasing infrastructure underground.
CORPORATE MATTERS Completion of Recommended All-Share Offer for Ridge Mining plc In July, Aquarius completed the scheme of arrangement relating to the recommended all share acquisition of Ridge in accordance with the terms outlined in the prospectus issued on 31 March 2009. Aquarius issued 34,087,945 common shares on the basis of 1 Aquarius share for every 2.75 Ridge shares in issue. Ridge Mining is now 100%-owned by Aquarius Platinum Limited. More information and a full prospectus can be found at www.aquariusplatinum.com As part of the Ridge Mining plc (Ridge) transaction, and as disclosed in the prospectus on 30 March 2009, Zijin Mining Group Company (Zijin) and Imbani Platinum (Pty) Ltd (Imbani) exercised their existing holdings in Ridge for new fully paid common shares in Aquarius. These holdings were in existence prior to the scheme of arrangement between Ridge and its shareholders relating to the all share acquisition by Aquarius of Ridge. On 27 August, Zijin exercised 7,000,000 Ridge warrants for 2,545,454 Aquarius shares. These were issued to Zijin's wholly-owned subsidiary Gold Mountains (H.K.) International Mining Co., Limited on the basis of 1 Aquarius share for every 2.75 Ridge shares. On 8 September, Imbani exercised 25,000,000 Ridge options for 9,090,909 Aquarius shares on the basis of 1 Aquarius share for every 2.75 Ridge shares. The aggregate exercise price of these options is GBP17.5 million (GBP0.70 per Ridge option). During the quarter, Aquarius issued 471,849 new fully paid common shares to former employees of Ridge, following the exercise of Ridge employee options and the subsequent transfer of the resulting 1,297,590 Ridge shares to Aquarius on the basis of 1 Aquarius share for every 2.75 Ridge share. Conclusion of Firstplats transaction The transaction to acquire the mining assets of First Platinum (Pty) Ltd and Salene Mining (Pty) Ltd, known collectively as "FirstPlats" was concluded during the quarter. TheFirstPlats assets have a combined reserve base of 0.54 million PGM ounces. Aquarius will add the additional reserves and FirstPlats mining infrastructure to the Marikana P&SA 2, with the P&SA partner contributing a pro-rata addition of 0.46 million ounces that will be added to the Kroondal Mine, P&SA 1. In total, the additional reserves will extend the life of mine at Marikana by in excess of two years and Kroondal by just more than one year. The P&SA 1 reserve base contribution is contiguous to Kroondal Mine. The FirstPlats assets are strategically important to Marikana Mine because the ground is contiguous with current operations and provides significant infrastructure cost savings with the ongoing development of the mine. The total consideration to FirstPlats is 2,732,000 new shares in Aquarius Platinum (representing 0.6% of the enlarged share capital of Aquarius) to be issued at nominal value on fulfilment of the Conditions Precedent. The FirstPlats assets, privately held by First Platinum and Salene Mining, are contiguous with Aquarius' Marikana operations. The assets have a reserve base of 0.55 million ounces from 5.22 million tonnes with an average grade of 3.28 g /t PGM. The acquisition of the FirstPlats assets includes both the FirstPlats and the Salene old order mining rights, the surface rights of both companies and the fixed and movable assets of both companies, inclusive of installed power of 10MVA, from Eskom. There are two declines bordering the Marikana mine, which have been developed since 2004. The operations had a combined design capacity of 50,000 ROM tonnes per month. The Firstplats assets have been on care and maintenance for the last three years, principally due to the lack of critical mass and market conditions. A total of 2,732,000 million new Aquarius shares will be issued to the shareholders of FirstPlats on the LSE, equal to 0.59%, of the total number of issues shares in Aquarius of 461,647,961. The shares will be issued on completion of the conditions precedent set out below. This values the issue at £8.2m (equal to approximately R100 million at an exchange rate of £1:R12.30). The addition of the FirstPlats and P&SA 1 reserves are value enhancing for a number of reasons: Reserves of 540,000 4PGE ounces, further extending life of Marikana P&SA II by in excess of two years. Shallow reserves that can be mined by Aquarius' established cost-effective mechanised mining methods. Reserves are adjacent and contiguous with Marikana P&SA 2 mining areas. FirstPlats location and infrastructure permits rapid down-dip access into Marikana P&SA 2 reserves and very significantly lowers life-of-mine capital requirements. Existing old order mining rights still remain valid, enabling immediate access to Aquarius, under the contract mining agreements, while application for new order rights in process. Kroondal P&SA 1 contribution will add 460,000 4PGE ounces to Kroondal. Estimated to extend the Kroondal P&SA 1 mine life by just over a year. Property contiguous to Kroondal Central and East mining areas, enabling low cost access and extraction from existing infrastructure. Approval has been received from the South African Competition Commission. Aquarius Platinum Limited Incorporated in Bermuda Exempt company number 26290 Board of Directors
Nicholas Sibley Non-executive Chairman
Timothy Freshwater Non-executive
Sir William Purves Non-executive
Zwelakhe Mankazana 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
Augustine Simbanegavi General Manager: Everest
ACS (SA) Management Paul Smith Director: New Business Mimosa Mine Management
Herbert Mashanyare Technical Director
Platinum Mile Management
Richard Atkinson Managing Director
Issued Capital At 30 September 2009, the Company had on issue: 461,647,961 shares fully paid common shares and 1,128,125 unlisted options.
Substantial Shareholders 30 September 2009 Number of Shares Percentage
Trading Information ISIN number BMG0440M1284 ADR ISIN number US03840M2089 Convertible Bond ISIN number BMG0440M1284
Liberum Capital Limited
City Point, 1 Ropemaker
London, EC1A 1HQ Telephone: +44 (0)20 7628 1000 Aquarius Platinum (South Africa) (Proprietary) Ltd 100% Owned (At 31 March 2009) (Incorporated in the Republic of South Africa) Registration Number 2000/000341/07
1st Floor, Building 5, Harrowdene Office Park, Western Service Road, Woodmead
2191, South Africa
South Africa.
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
6151, Australia
For further information please visit aquariusplatinum.com or contact: In Australia Willi Boehm +61 (0)8 9367 5211 In the United Kingdom and South Africa Stuart Murray Hugo Höll + 27 11 656 1140 Glossary
Aquarius Aquarius Platinum Limited
ACS (SA) Aquarius Platinum (SA) (Corporate Services) (Pty) Limited
or $
Everest Everest Platinum Mine
Dyke
Reef
code
Kroondal Kroondal Platinum Mine or P&SA1 at Kroondal
Marikana Marikana Platinum Mine or P&SA2 at Marikana
Redpath Redpath Mining South Africa Pty Ltd.
SavCon The Savannah Consortium - the principal Black Empowerment Investor in
UG2 Reef A PGE-bearing chromite layer within the Critical Zone of the Bushveld
END |
| Previous | Next | All news for this company |
| Article layout: raw |