24th Jul 2008 07:00
Aquarius Platinum
Fourth Quarter 2008 Production Results
Highlights of the Quarter
* Record achieved average PGM basket price at all operations
* Quarterly attributable mine production falls marginally to 109,863 PGM ounces
* Annual group attributable PGM production in line with revised target at 500,203
ounces
* Buyback completion of Implats stakes in Aquarius and AQPSA creates significant
value
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said:
"Production during the quarter was hampered by industrial relations issues atour operations. This situation necessitated significant intervention andactivism by AQPSA management, largely in respect of dealing with therelationships between mining contractors and their employees. As a consequenceAQPSA entered into contract renegotiations with the major mining contractor atKroondal and Marikana which saw AQPSA taking over key mining and financepositions on the mines. These changes to the company's contracting model inSouth Africa, whilst disruptive to implement, are necessary, and I am confidentwill bear fruit in the future. Lifting volumes is paramount if margins are tobe maintained in light of significant cost pressures, as we all continuegrapple with significant escalation in prices for electricity, diesel, steel,chemicals, labour and explosives. Record prices during the quarter wentsomeway to offsetting the impact of higher costs, though not enough to liftmargins as in previous quarters."
P&SA1 at Kroondal
* PGM production of 83,062 PGM ounces, down 17% quarter on quarter (Aquarius
attributable 41,531 PGM ounces)
* Cash margin for the quarter at 66%
* Revised bonus system implemented to overcome production issues due to
industrial action
P&SA2 at Marikana
* PGM production increased by 17% quarter-on-quarter to 28,416 PGM ounces
(Aquarius attributable: 14,208 PGM ounces)
* Cash margin for the quarter decreased to 28%
* Change in the open pit mining methodology resulted in a more than doubling of
production, albeit with high stripping costs
Everest
* PGM production increased 1% quarter-on-quarter to 31,327 PGM ounces (Aquarius
attributable: 31,327 PGM ounces)
* Cash margin for the quarter at 65%
* High labour turnover, go-slows and general unrest affected labour availability
during transition to owner-operator
Mimosa
* PGM production increased by 12% quarter-on-quarter to 38,517 PGM ounces
(Aquarius attributable: 19,258 PGM ounces)
* Cash margin for the quarter increased to 77%
* Wedza Phase V Project commissioned
* Premature break down of Primary Ball Mill 2 in the older Phase 3 milling
circuit negatively impacted production
CTRP
* PGM production decreased by 11% quarter-on-quarter to 2,044 PGM ounces
(Aquarius attributable: 1,022 PGM ounces)
* Gross cash margin for the quarter at 80%
Platinum Mile
* PGM production for the quarter was 5,035 PGM ounces (Aquarius attributable:
2,517 PGM ounces)
* Gross cash margin for the quarter was 47%
Production by Mine Quarter Ended PGMs (4E) Sep 2007 Dec 2007 Mar 2008 Jun 2008 Kroondal 106,493 101,542 100,020 83,062 Marikana 35,200 37,744 24,223 28,416 Everest 48,841 46,719 31,107 31,327 Mimosa 38,660 39,372 34,283 38,517 CTRP 2,681 2,816 2,309 2,044 Platinum Mile - - 2,006* 5,035 Total 231,875 228,193 193,948 188,401
Production by Mine Attributable to Aquarius
Quarter Ended PGMs (4E) Sep 2007 Dec 2007 Mar 2008 Jun 2008 Kroondal 53,246 50,771 50,010 41,531 Marikana 17,600 18,872 12,111 14,208 Everest 48,841 46,719 31,107 31,327 Mimosa 19,330 19,686 17,142 19,258 CTRP 1,340 1,408 1,154 1,022 Platinum Mile - - 1,003* 2,517 Total 140,357 137,456 112,527 109,863 *From 1 March 2008
Metals Prices and Foreign Exchange
PGM prices continued to strengthen in the fourth quarter, but were showingweakness in June as turmoil in financial markets affected most metals prices. Platinum closed 8% higher at $2,064 per ounce; rhodium increased 9% to $9,725per ounce; palladium increased 10% to $497 per ounce, while gold added 4%,closing at $934 per ounce.Platinum, rhodium and to a lesser extent palladium continued to benefit fromheightened supply concerns from South Africa, notably due to industrialrelations and power constraints. On the demand side, jewellery has certainlyseen some reduction in demand, yet demand from platinum autocatalysts and ETFsin particular during the quarter witnessed significant growth. All of ourcommodities continue to benefit from the weak US dollar and the flight toprecious metals as an alternative asset class in the face of recessionaryconcerns.
Average PGM basket prices for the Group maintained record levels over the quarter in both Rand and US Dollar terms, achieving a peak of $2,454 per ounce during the quarter.
At our South African operations, the four element basket price peaked at R19,565 per ounce, and the average achieved price was 20% higher than the previous quarter at R17,929 per ounce, equal to $2,310 per ounce.
In Zimbabwe, the average achieved basket price for the quarter was 30% higher at $1,607 per ounce.
This resulted in a record group basket price equivalent of $2,187 per PGM ounce or R11,173 per PGM ounce, 10% higher than the previous quarter.
Average PGM basket prices achieved at Aquarius operations: US$ per PGM ounce(4E) Basket Prices (Quarter Ended) Sep 2007 Dec 2007 Mar 2008 Jun 2008 Kroondal 1,518 1,657 2,129 2,350 Marikana 1,480 1,632 2,041 2,311 Everest 1,475 1,635 2,112 2,266 Mimosa 1,065 1,083 1,237 1,607 CTRP 1,775 1,967 2,505 2,850 Platinum Mile - - - 1,989 Aquarius Group Average 1,438 1,567 1,981 2,187
The Rand Dollar exchange rate for the quarter averaged 7.76, 5% weaker than the 7.40 average recorded in the previous quarter.
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 67.5%)
P&SA 1 at Kroondal
Safety
The 12-month rolling average DIIR for the quarter deteriorated from 0.40 in theprevious quarter to 0.49. Thirteen lost time injuries were reported during
thequarter.Mining
Production tons decreased by 10% to 1,389,997 tons
Head grade decreased by 1.6% to 2.52g/t.
Processing
Tons processed decreased by 16% to 1,334,325 tons.
Recoveries remained unchanged at 77%.
PGM production decreased by 17% to 83,062 PGM ounces.
P&SA1 at Kroondal PGM Production & Rand Cash Costs per PGM Ounce
Revenue
The basket price for the quarter averaged $2,350 per PGM ounce, 10% higher thanthe previous quarter and the Rand Dollar exchange rate averaged 7.76. Revenueat Kroondal decreased by 22% to R1,368 million for the quarter (Aquariusattributable: R684 million) due to the lower production and negative salespipeline adjustments, caused by a strengthening of the Rand at the close of theperiod compared to the close of the prior quarter.
Operations
Total production decreased by 10% to 1,389,997 tons. Production from underground operations decreased by 8% to 1,389,997 tons.
The Central West opencast was completed during the previous quarter. Production from the Klipfontein opencast is planned to be completed during the first quarter of the new financial year.
Production was adversely affected by underground mining contractor Murray & Roberts Cementation employees embarking on several bonus related go-slow industrial action and work stoppages, whilst Redpath SA's employees at K5 shaft also embarked on industrial action relating to pay issues. A revised bonus-system was developed in consultation with the unions to resolve these issues.
Production was also negatively affected by having fewer production days due tofour public holidays during the quarter. Absenteeism was high following thesepublic holidays. The consequence of the industrial action and absenteeismresulted in a loss of around 375,000 tons or 24,000 PGM ounces (12,000attributable) for the quarter.During the quarter, the commercial arrangement between AQPSA and MRC waschanged substantially to enable AQPSA to assume more managerial responsibility,effectively allowing MRC to continue providing skilled labour and supervision,procurement and engineering maintenance services. It is expected that thisrevised structure will positively affect operations going forward.Tons processed decreased by 16% to 1,334,325 tons, comprising 1,327,740 tonsfrom underground and 6,586 tons of opencast material. Stockpiles at the end ofthe quarter were 4,907 tons.
The head-grade decreased by 1.6% to 2.52g/t as a result of lower in-situ grade mined
Recoveries remained unchanged at 77%.
PGM production decreased by 17% to 83,062 PGM ounces (41,531 attributable).
Primary development for the quarter was 2,500 metres.
Kroondal: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Jun 2008 49,621 24,054 9,014 372 83,062 41,531 Mar 2008 59,834 28,966 10,759 461 100,020 50,010 Dec 2007 60,726 29,525 10,819 472 101,542 50,771 Sep 2007 63,860 30,855 11,259 518 106,493 53,246 Operating Cash CostsCash costs per ton increased by 35% to R354 and costs per PGM ounce increasedby 37% to R5,680. The cost base is experiencing significant appreciation dueto the escalation of power, diesel, chemical, explosive and steel grindingmedia prices. Specific to Kroondal, lower production output due to go-slowindustrial action and work stoppages, absenteeism and lower achieved grade alsoaffected costs. Consequently the cash margin fell to 66%.
Kroondal: Operating Cash Costs per Ounce
4E 6E 6E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu)
Kroondal R 5,680 R 4,669 R 4,500 Capital Expenditure
Capital expenditure for the quarter was R93 million, all ongoing capital. Major items included establishment of the second phase of the K5 Rail Project and underground infrastructure extensions.
P&SA2 at Marikana
Safety
The 12-month rolling DIIR deteriorated from 0.45 to 0.54. Six lost-time injuries were reported during the quarter.
Mining
Production tons increased by 40% to 515,492 tons, consisting of 276,498 tons from underground and 238,994 tons from open pit operations.
Head grade decreased by 3.6% to 2.68 g/t.
Processing
Tons processed increased by 23% to 524,674 tons.
Recoveries fell by 2% to 62.6%.
PGM production increased by 17% to 28,416 ounces (Aquarius attributable: 14,208 ounces)
RevenueThe basket price for the quarter averaged $2,311 per PGM ounce 13% higher thanthe previous quarter, with an average Rand Dollar exchange rate of 7.76.Revenue at Marikana decreased by 8% to R428 million for the quarter (Aquariusattributable: R214 million). Despite higher production and basket prices,revenue was lower due to a negative sales pipeline adjustment, caused by astrengthening of the Rand at the close of the period compared to the close
ofthe prior quarter.Operations
Total production increased by 40% to 515,492 tons for the quarter comprising 276,498 tons underground material and 238,994 tons open pit material.
Production was adversely affected by underground mining contractor Murray & Roberts Cementation employees embarking on several bonus related go-slow industrial action and work stoppages, whilst Redpath SA's employees at K5 shaft also embarked on industrial action relating to pay issues. A revised bonus-system was developed in consultation with the unions to resolve these issues. Production was also negatively affected by having fewer production days due to four public holidays during the quarter. Absenteeism was high following these public holidays.
During the quarter, the commercial arrangement between AQPSA and MRC waschanged substantially to enable AQPSA to assume more managerial responsibility,effectively allowing MRC to continue providing skilled labour and supervision,procurement and engineering maintenance services. It is expected that thisrevised structure will positively affect operations going forward.
Production from underground operations increased by 8.8% to 276,498 tons, dominating the underground to open pit production mix.
Production from the open pit material increased by 114% to 238,994 tons. Thechange in mining methodology reported in the previous quarterly report, isbearing fruit and the outlook is positive. The stripping ratio for the quarterhad to be increased to 46% to get the pit in the correct shape. The strippingratio for the 2009 Financial Year is planned at a much reduced level 28:1compared to 46:1 for the last quarter of the 2008 Financial Year.Stockpiles at the end of the quarter were 70,263 tons, a reduction of 38%. Thelow-recovery-oxidised stockpile was processed during the quarter, takingadvantage of the high metal prices. Stockpiles at the end of the quarter weresignificant as all the fresh open pit material that was mined towards the endof the quarter could not be processed in the quarter.A total of 524,674 tons were processed during the quarter: 273,486 tons fromunderground; 251,188 tons of open pit material which includes 70,220 tons oflow-recovery-oxidised material.
The head-grade decreased by 3.6% to 2.68 g/t due to the processing of the low-recovery-oxidised material and pothole intersections in the decline sinking operations. Certain areas in the open pit intersected reef with increased internal waste, having a further effect.
Recoveries deteriorated slightly to 62.6% due to the lower head grade and treatment of oxidised material which was processed during the quarter. The oxidised material equates to 13% of tons processed.
PGM production increased by 17% to 28,416 ounces (Aquarius attributable: 14,208 ounces)
Marikana: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Jun 2008 17,843 7,649 2,769 155 28,416 14,208 Mar 2008 15,114 6,601 2,351 158 24,223 12,111 Dec 2007 23,985 9,925 3,586 249 37,744 18,872 Sep 2007 21,844 9,742 3,367 246 35,290 17,600 Operating Cash Costs
Cash costs per ton increased by 11% to R586, whilst costs per PGM ounce increased by 16% to R10,817. As explained at Kroondal, appreciation in input costs is placing significant pressure on costs. Particular to Marikana a stripping ratio of 46:1 in the open pit, production interruptions and processing the low-recovery-oxidised material also affected costs. Consequently, the cash margin was lower at 28% for the quarter.
Marikana: Operating Cash Costs per Ounce
4E 6E 6E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu)
Marikana R 10,817 R 8,944 R 8,680 Capital Expenditure
Capital expenditure totalled R34 million, including R0.1 million of expansion capital (AQPSA share R0.05million).
Contractor dispute with Moolman Mining
AQPSA's application to stay the Arbitration proceedings instituted by MoolmanMining in the "rise and rall" formula dispute, pending the outcome of theaction proceedings instituted by AQPSA against Moolman Mining to set aside themining contract by reason of Moolman Mining's misrepresentation, has been setdown for hearing during the first week of March 2009.Should AQPSA succeed in the application, the main action will be heard before ajudge in the High Court at some time in the future after that date,alternatively should the outcome of the application be that the main actionshould be referred to arbitration, that arbitration would also take place atsome indeterminate time in the future. Accordingly, the March 2009 applicationis simply to determine whether the main misrepresentation action can be heardby the High Court or whether it must be submitted to Arbitration.
Everest Platinum Mine
Safety
The 12-month rolling average DIIR deteriorated from 0.75 to 0.89. Ten lost-time injuries occurred during the quarter, of which two were regrettably fatal accidents.
Mr Shaba Lepheana was injured on 21 March 2008, while he was busy replacing a water manifold on a temporary water pipe installation. Mr Lepheana died in hospital two months later.
Mr Daniel Moeng was fatally injured on 23 April 2008 by a FOG whilst drilling a face.
Investigationsand enquiries into both fatalities were concluded by the DME.
No
official reports have been received to date.
Mining
Production increased by 7% to 414,240 tons; consisting of 407,133 tons from underground and 7,107 tons from opencast operations
Underground production increased by 23%
The head grade deteriorated by 2.6% to 2.91 g/t
Processing
Plant processed 418,934 tons, 2.3% less than the previous quarter
Recoveries improved from 75% to 80%, an improvement of 6.7%
PGM production increased marginally by 0.1% to 31,327 PGM ounces
Revenue
The basket price for the quarter averaged $2,266 per PGM ounce, 7% higher thanthe previous quarter, with average Rand Dollar exchange rate of 7.76. Despitehigher production and basket prices, revenue was lower at R530 million due tothe negative sales pipeline adjustments, caused by a strengthening of the Randat the close of the period compared to the close of the prior quarter.
Operations
Total production increased by 7.1% to 414,240 tons consisting of 407,133 tonsfrom underground and 7,107 tons from opencast operations. Open pit operationswere completed at the end of the quarter in-line with the business plan.
Although production from underground operations increased by 23% to 407,133 tons, during the quarter, production was adversely affected by employees embarking on go-slow industrial action and illegal work stoppages followed by a number of interruptions which were bonus and pay-related.
On 28 May forty two LHD operators embarked on a stoppage relating to grievancesin respect of pay, joined in sympathy the next day by the remainder of theunderground workforce. On 3 June the workforce returned to work, following anagreement between AQPSA management and employee representatives, facilitated bythe NUM, whereby both parties resolved to work together to build a constructiveclimate of engagement in the future. In total, around 2,000 ounces of PGMs waslost due to this industrial action.Production was also negatively affected by the fewer number of production daysdue to four public holidays during the quarter. Absenteeism was high followingthese public holidays.
As the transition to owner operator progresses, the time and attendance system, as well as pay systems were improved and related problems were largely resolved.
No stockpile remained at the end of the quarter.
A total of 418,934 tons were processed during the quarter: 411,827 tons from underground; 7,107 tons of open pit material.
The head-grade deteriorated by 2.6% to 2.91 g/t. A risk assessment during thequarter resulted in a decision by management to include the pyroxenite beam inthe face-cut on the northern-side of the mine for safety reasons. This beamthins out in the direction of mining and the effect of the additional wastewill reduce as mining approaches the norite hanging wall area. Mining in thehigher stoping width area of the north bord section was below target resultingin overall stoping widths not being achieved. This was the main contributorfor not achieving the target grade.
Recoveries improved from 75% to 80% during the quarter.
PGM production increased marginally by 0.1% to 31,327 ounces.
Everest: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs (4E) Jun 2008 18,777 9,060 3,236 254 31,327 Mar 2008 18,863 8,912 3,072 259 31,107 Dec 2007 27,897 13,576 4,877 369 46,719 Sep 2007 28,890 14,486 5,069 396 48,841 Operating Cash CostsCash costs per ton increased by 40% to R438, whilst costs per PGM ounceincreased by 36% to R5,859. This was due to the significant increases to thecost base of all consumable, and the impact of lost shifts due to industrialaction, absenteeism and the lower production units. Consequently, margins werelower at 65%.
Everest Operating Cash Costs per PGM Ounce
4E 6E 6E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu)
Everest R 5,859 R 4,749 R 4,543 Capital Expenditure
Capital expenditure for the quarter was R45 million, for ongoing capital.
Major items included trackless mining equipment (associated with the move to owner-operator), mining pumps and pump stations, conveyors (both strike and dip), and portable standby generators.
MIMOSA INVESTMENTS (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The 12-month rolling DIIR improved from 0.41 to 0.18. Three lost-time injuries occurred during the quarter.
Mining
Underground production increased by 19% to 497,228 tons
Head grade increased 2% to 3.60g/t
The surface stockpile increased to a total 497,693 tons at the end of the quarter, equivalent to over 99-days mill feed
Processing
Concentrator plant recoveries increased to 75.9% from 75.1%
Total mine production increased by 12% to 38,517 PGM ounces (Aquarius share: 19,258 PGM ounces)
Successful commissioning of the Wedza Phase V metallurgical plant
Premature breakdown of the Primary Ball Mill in the older Phase Three milling circuit negatively affected production
Revenue
The average achieved PGM basket price for the quarter increased by 30% to$1,607 per PGM ounce. The average achieved nickel price over the quarterincreased by 2% to $13.17 per pound from $12.92 per pound in the previousquarter. Revenue for the quarter increased to $76.3 million, with base metalsaccounting for approximately 24% of revenue. The cash margin increased to 77%from 70% in the previous quarter.
Operations
During the quarter mining operations hoisted 497,228 tons compared to 419,196tons in the previous quarter. Tons milled during the quarter totalled 438,401tons, with 58,827 being transferred to the stockpile, which totalled 497,693tons at the quarter end. In line with plan, the stockpile increased by 58,827tons.At Mimosa, the successful commissioning of the Phase 5 metallurgical plantexpansion and the very good performance of mining operations was negativelyimpacted by premature equipment failures of the Primary Ball Mill 2 (PBM2) inthe older Phase 3 milling circuit. The failure of a bearing and the mill endof the PBM2 (the end was scheduled for replacement in July 2008) necessitatedrepairs in South Africa and occurred in the run up to the election run-off. The reluctance by engineering service contractors to assist mine personnelduring this time, gave rise to total downtime on the Phase 3 milling circuit(around 60% of mill capacity) of 38 days, of which 23 days were during thequarter and 15 days in the first quarter of the 2009 financial year. Theimpact of the mill end failure on Mimosa's production is estimated at 5,550 4EPGM ounces for the quarter.
The average plant grade marginally increased to 3.60g/t, compared to 3.56g/t in the previous quarter.
Tons processed totalled 438,401, a 10% increase compared to the previous quarter, due to Phase V commissioning at the end of the quarter.
Recoveries for the quarter slightly increased to 75.9% from 75.1%.
PGM production during the second quarter increased by 12% to 38,517 ounces (Aquarius attributable: 19,258.5 ounces).
Mimosa: PGMs in concentrate produced (ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Jun 2008 19,532 14,821 1,535 2,628 38,517 19,258 Mar 2008 17,392 13,234 1,351 2,306 34,283 17,142 Dec 2007 19,996 15,216 1,563 2,597 39,372 19,686 Sep 2007 19,644 14,883 1,517 2,616 38,660 19,330
Mimosa: Base Metals in concentrate produced (tons)
Mine Production Attributable to Aquarius Quarter ended Ni Cu Co Ni Cu Co Jun 2008 533 439 15 266.5 219.5 7.5 Mar 2008 475 392 14 237.5 196 7 Dec 2007 541 446 15 270.5 223 7.5 Sep 2007 537 441 16 268.5 220.5 8 Operating Cash CostsTotal cash costs for the quarter increased to $488 per PGM ounce, a 4% increasecompared to the previous quarter's figure of $471 per PGM ounce. The increasein cash costs for the quarter was attributable to the low productionthroughput, increased power tariffs and internal inflation pressures whichresulted in increased Zimbabwean dollar denominated costs as the inflation ratewas not in parity with the achieved exchange rate. The gross cash marginincreased to 77% from 70% in the previous quarter.
Net of by-products, cash costs were negative at $(23) per PGM ounce, compared to $(1) per PGM ounce in the previous quarter, primarily due to the higher nickel price.
Mimosa Operating Cash Costs per Ounce
4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu & Co) Mimosa $488 $462 (23)
Update on Foreign Currency Regime in Zimbabwe
On the 30th of April 2008, the Governor of the Reserve Bank of Zimbabwe issueda Monetary Policy Statement. Part of the measures announced within thisstatement was the liberalisation of the foreign exchange market, wherebyforeign currency trade takes place on a willing-buyer willing-seller basis atthe interbank market. Mimosa also participates on the inter-bank foreigncurrency market and transact at the inter-bank exchange rates to raise localcurrency to meet local obligations.
Update on Indigenisation Legislation in Zimbabwe
The Indigenisation and Economic Empowerment Bill was enacted into law duringthe last quarter of the financial year. Specific details on the implementationof the Act in various sectors of the economy are being awaited. The details onthe mining sector are proposed to be incorporated into the amendments to theMines and Minerals Act which are yet to be brought before Parliament.
Wedza Phase 5 Expansion
Wedza Phase 5 Expansion Project was commissioned in April 2008.The Phase 5 partof the operations has operated well since commissioning. Operations are closeto steady-state, subsequent to the repair of the Primary Ball Mill 2.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%)
Safety
The DIIR reduced from 5.65 to 5.62 from the previous quarter. No lost time accidents were recorded.
Processing
Material processed increased by 10% to 69,618 tons
Grade decreased 29% to 3.25 g/t
Recoveries increased by 15% to 29%.
Production decreased 11% to 2,044 PGM ounces (Aquarius attributable: 1,022 PGM ounces).
RevenueRevenue decreased by 17% to R45 million for the quarter (Aquarius attributable:R22.5 million). The basket price for the quarter averaged $2,850 per PGM ounce15% higher than the previous quarter, the average Rand Dollar exchange rateweakening to 7.76. The higher basket prices helped to offset lower production,resulting in the cash margin for the quarter decreasing to 80% from 88% in
theprevious quarter.Operations
Material processed increased to 69,618 tons due to increased feed-rate of tailings dam material.
The head grade, however, decreased 29% to 3.25 g/t due to treatment of the lower-grade material in the tailings dam.
Nevertheless, recoveries increased by 15% to 29% due to optimisation of the mill circuit by increasing the media charge.
This resulted in production decreasing by 11% to 2,044 PGM ounces (Aquariusattributable: 1,022 ounces). Although the recovery and throughput increasedduring the quarter the decrease in production was a result of treating lowergrade tailings dam material.Operating CostsCash costs increased by 54% to R4,329 per PGM ounce. The increase is a resultof the grinding media being exported from China and R1 million being spent toincrease the stock levels to ensure feed and the purchase of a spare drum forthe Deswik mill at a cost of R350,000.
CTRP Operating Cash Costs per Ounce
4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu& Co) CTRP R 4,329 R 2,323 R 2,205
Platinum Mile (Aquarius Platinum 50%)
The effective date of the acquisition of the 50% interest in Platinum Mile was 1 March 2008. Comments below concern the three month period for the quarter April to June 2008. A quarter-on-quarter comparison is therefore not available.
Safety
The DIIR was zero for the quarter. No lost time accidents were recorded.
Processing
2,347 million tons were processed
Grade was 0.71 g/t
Production was 5,035 PGM ounces (Aquarius attributable: 2,517 PGM ounces)
Revenue
Revenue at Platinum Mile was R69 million for the quarter (Aquarius attributable: R34.5 million). The basket price for the quarter averaged $1,989 per PGM ounce, at an average Rand Dollar exchange rate of R7.76. The cash margin for the quarter ended 30 June 2008 was 47%.
Operations
The head grade was 0.71 g/t. Recoveries were 9%. This resulted in production of 5,035 PGM ounces (Aquarius attributable: 2,517 ounces).
Production for the four months, 1 March to 30 June was 7,040 PGM ounces (Aquarius attributable: 3,520 PGM ounces)
Operating Costs
Cash costs for the quarter were R7,376 per PGM ounce.
Platinum Mile Operating Cash Costs per Ounce
4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu& Co) Platinum Mile R 7,376 nm nm Capital expenditure for the quarter was R4.8 million: R0.2 million for ongoingcapital expenditure and R4.6 million for expansion capital expenditure. Majoritems included capital incurred in expansion of the fine grinding circuit atthe operation.CORPORATE MATTERSGeneral Meeting
Subsequent to the period under review, on 16 July 2008, shareholders ratified both Resolution 1, the ratification of issue of 23,144,000 (per Impala repurchase) shares and Resolution 2, the ratification of issue of 2,680,854 (per Platinum Mile shares).
Purchase of Stakes of Impala Platinum in both Aquarius Platinum Limited and Aquarius Platinum South Africa
On 28 April 2008, Aquarius announced the completion of the repurchase of the21,425,898 common shares (approximately 8.4% of Aquarius' issued share capital)previously held by Implats for ‚£6.71 ($13.34) per share, representing a totalconsideration of ‚£143.8 million ($285 million). These shares have now beencancelled. In addition, AQPSA repurchased Implats' 20% stake in AQPSA for atotal consideration of $504.9 million; comprising a cash payment of $459.0million to Implats and a Secondary Tax on Companies ("STC") charge of $45.9million, as required under South African tax legislation.The transactions were funded through a combination of an accelerated bookbuild, cash and debt. The completed bookbuild resulted in the issuance of23,144,000 new common shares of $0.05 each in Aquarius Platinum, at a price ofGBP 800 pence per placing share, raising gross proceeds of approximately $366million (‚£185 million). The balance of the transaction was funded through cashand debt.
AQPSA and ACS(SA) Appointments
Aquarius is pleased to announce three appointments at AQPSA and one at ASACS during the quarter.
Mr Hulme Scholes, an attorney specialising in mineral rights legislation hasreturned to work for AQPSA on a full time basis from the South Africa law firmWerksmans. Mr Scholes will continue to hold his seat at the AQPSA Board,though as an Executive Director.Ms HĩlĬne Nolte, was appointed at AQPSA Finance Director on 1 July 2008. MsNolte commenced her career at KPMG where she spent over 9 years, mostlyservicing mining industry clients, her last position being that of Senior AuditManager. She has been involved with AQPSA since 1999 in an audit capacity andfrom 2004 in a consulting capacity.Mr Mkhululi Duka has been appointed to the new position as General Manager ofHuman Resources & Transformation. Mr Duka joins from Petro SA where he was theGroup HR Manager. His primary focus areas will include human resourcedevelopment, policies and procedures, Social and Labour Plans, local economicdevelopment, recruitment and performance management.In addition, Mr Paul Smith has been appointed to the new position of DirectorNew Business at Aquarius Platinum (SA) Corporate Services (Pty) Ltd (ACS(SA))where he will be responsible for a wide remit including strategy and newbusiness development opportunities. Paul has abundant experience in mining andfinance, notably at ABSA, African Merchant Bank and BoE-NatWest.
More information on all the corporate matters can be found at www.aquariusplatinum.com
Aquarius Platinum LimitedIncorporated in BermudaExempt company number 26290Board of DirectorsNicholas 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 Kofi Morna Non-executive Zwelakhe Mankazana Alternate to Kofi Morna 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 SecretaryWilli Boehm AQPSA Management Stuart Murray Executive Chairman Anton Wheeler Managing Director HĩlĬne Nolte Director: Finance Willie Byleveld General Manager: Technical Services
Graham Ferreira General Manager: Group Admin & Company Secretary
Hugo HĦll General Manager: Projects Mkhululi Duka General Manager: Group Human Resources & Transformation Wessel Phumo General Manager: Marikana Jacques Pretorius General Manager: Everest Gordon Ramsay General Manager: Metallurgy Rudi Rudolph General Manager: Kroondal Gabriel de Wet General Manager: Engineering
ACS(SA) Management
Paul Smith Director: New Business
Mimosa Mine ManagementWinston Chitando Managing Director Herbert Mashanyare Technical Director Peter Chimboza Operations Director Issued Capital
At 30 June 2008, the Company had in issue:
262,052,778 fully paid common shares and 1,680,305 unlisted options
Substantial Shareholders 30 June 2008 Number of Shares Percentage Nutraco Nominees Limited 16,624,749 6.34% JP Morgan Nominees Australia Limited 12,543,507 4.79%
Trading InformationISIN number BMG0440M1284
ADR ISIN number US03840M2089
Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE) Morgan Stanley & Co Euroz Securities Investec Bank LimitedInternational Limited Level 14, The 100 Grayston Drive
20 Cabot Square, Canary Wharf Quadrant Sandown London, E14 4QW 1 William Street Sandton 2196 Telephone: +44 (0)20 7425 8000 Perth WA 6000 Telephone: +27 (0)11 Facsimile: +44 (0)20 7425 8990 Telephone: +61 (0)8 286 7326
9488 1400 Facsimile: +27 (0)11 Facsimile: +61 (0)8 291 1066 9488 1478 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
67.5% Owned (At 30 June 2008)
(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
Postal Address P O Box 1282, Bedfordview, 2008, South Africa.Telephone: +27 (0)11 455 2050Facsimile: +27 (0)11 455 2095
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,AustraliaPostal Address PO Box 485, South Perth, WA 6151, AustraliaTelephone: +61 (0)8 9367 5211Facsimile: +61 (0)8 9367 5233Email: [email protected] GlossaryA$ 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
ACS(SA) Aquarius Platinum (SA) (Corporate Services) (Pty) Limited
CTRP Chromite Ore Tailings Retreatment Operation. Consortium comprising Aquarius Platinum (SA) (Corporate Services) (Pty) Limited (ASACS), Ivanhoe Nickel and Platinum Limited and Sylvania South Africa (Pty) Ltd (SLVSA). 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 Affairs Dollar United States Dollar or $ EMPR Environmental Management Programme Report Everest Everest Platinum Mine Great A PGE bearing layer within the Great Dyke Complex in Zimbabwe Dyke Reef g/t Grams per tonne, measurement unit of grade (1g/t = 1 part per million) JORC Australasian code for reporting of Mineral Resources and Ore code Reserves JSE JSE Securities Exchange South Africa 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 MRC Murray & Roberts Cementation nm Not measured NOSA National Occupational Safety Association NUM South African National Union of Mineworkers PGE(s) Platinum Group Elements plus Gold. Five metallic elements (6E) 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) Platinum Group Metals plus Gold. Aquarius reports the PGMs as(4E) 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 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
For further information please contact:
In Australia:Willi Boehm+61 (0)8 9367 5211
In the United Kingdom and South Africa
Nick Bias+ 44 (0)7887 920 [email protected]
vendorRelated Shares:
AQP.L