28th Jan 2016 11:41
LONDON (Alliance News) - Aquarius Platinum Ltd Thursday said production from its two mines in Africa exceeded its guidance during the second quarter of its financial year, as the miner continues to grapple with costs in light of lower metal prices.
The platinum miner has three operations in Africa, its Kroondal mine in South Africa, the Mimosa mine in Zimbabwe and the PlatMile retreatment facility which recovers platinum group metals from the tailings streams of various platinum and chrome mining operations in its vicinity in South Africa.
Attributable platinum group metal production in the second quarter ended December 31 totalled 89,399 ounces, which was down 4% from the previous quarter but a smidgen higher than the corresponding quarter a year earlier.
Aquarius' attributable production from the Kroondal mine fell 2% quarter-on-quarter but rose 3% year-on-year to 57,421 ounces, whilst the Mimosa mine reported a 7% quarter-on-quarter fall and a 5% year-on-year fall to 29,010 ounces.
The PlatMile operation produced 2,968 ounces in the second quarter, which was down 24% from the previous quarter but 48% higher than the corresponding period a year earlier.
Like many commodities, platinum prices are continuing to come under pressure with average PGM prices coming in at USD802 per ounce in the quarter. That is 7% lower than the USD865 per ounce achieved in the previous quarter and a 27% fall from the USD1,097 per ounce achieved in the same period a year earlier.
To put that USD802 an ounce price into perspective, Aquarius said its cash cost at Kroondal averaged USD648 per ounce in the quarter whilst cash costs at Mimosa came in at USD772 per ounce. Per ounce produced at the PlatMile operation cost the company USD590.
"The fact that both Kroondal and Mimosa's platinum group metal unit costs are lower today than three years ago despite steep increases in labour, electricity and other costs is testimony to excellent operational management," said the miner.
"That said, the lower PGM prices experienced during the quarter impacted both Kroondal and Mimosa. In order to ensure sustainability in this macro environment (USD PGM prices fell to the lowest level in more than a decade) further cost-saving initiatives were implemented at Kroondal, and specifically Mimosa, which management expects to result in unit costs reducing further going forward," it added.
Aquarius shares were up 0.3% to 12.29 pence per share on Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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