8th Aug 2007 07:00
AQUARIUS PLATINUM LIMITED
Full Year Results: 30 June 2007
Highlights of the year:
* Record group production at 530,726 PGM ounces
* Record net profit up 119% to $187.2 million (US218.5 cents per share)
* Net operating cash flow up 84% to $323 million
* Full year dividend up 75% to US42 cents per share
* Proposed share split on a 3:1 basis to be put to shareholders
Operational
* Group attributable production up 19% to 530,276 PGM ounces (2006: 447,693 PGM ounces)
* Kroondal production tons increased by development at new K5 Shaft
* Marikana production demonstrates potential as underground mining commences
* Everest delivers strong increases in production as underground operations ramp-up
* Mimosa delivers steady increase in production
* Chrome Tailings Re-treatment Program delivers modest increase of high margin production
* Increased focus on mine development to improve face availability flexibility and redundancy
Financial
* Revenue increased 67% to $710.8 million
* Net operating cash flow up 84% to $323 million from $175 million
* Net profit increased 119% to $187.2 million (US218.5 cents per share)
* Cash balances rose to $287.6 million from $162.4 million
* US30 cents per share final dividend declared, payable on 5th October 2007 (2006: US18 cents)
* Total 2007 dividend (interim and final) up 75% to US42 cents (2006: US24 cents)
Strategic
* Completion of South African new order mining rights conversions
* Completion of 3.5% subsidiary buy-back from BEE partner SavCon
* Agreement with Bakgaga Mining to drill and conduct feasibility work over 3,000 hectares
* Mimosa Wedza Phase V expansion announced, ramping up into 2008
Commenting on the full year results, Stuart Murray, CEO of Aquarius Platinum said, "I am delighted to again report a set of record production and earnings figures and our highest dividend yet. This performance is credible when set against an ever more challenging operating environment. At Aquarius we are not alone in experiencing more challenging geology, though recognising this, we have changed our mining planning and strategy to provide for more on-reef development at our operations which over time will result in improved mining efficiencies.
Looking to the new financial year, our operations will continue to ramp-up production and deliver even more ounces at times of ongoing record upside in prices. The challenge will be to manage costs as these issues continue to dominate the operating environment. That said, we aim for more growth, and target an additional 15% production in the next financial year."
Aquarius announces consolidated earnings for the year to 30 June 2007 of $187.2 million equal to US218.5 cents per share. This represents a 119% increase in net profit over the previous year. The increase is attributed to a 19% increase in production to 530,726 PGM ounces attributable to Aquarius and an increase in the average 4E PGM basket price (Platinum, Palladium, Rhodium and Gold) for the Group to US$1,293 per ounce in 2007 compared to US$932 per ounce in 2006, and not least other metals produced as by-products - notably nickel, iridium and ruthenium.
The operations delivered net operating cash flow of $323 million for the year, up from $175 million in the previous year due to higher prices and production volumes. The increased cash flow allowed the Group to reduce debt, repay shareholder loans and fund mine development and rehabilitation at the Group's respective mines, and buy back 3.5% of AQPSA from our empowerment partners.
The Directors have declared a final dividend of US30 cents (2006: US18 cents) per share payable on 5th October 2007 to shareholders registered on 14th September 2007. This brings the total dividend payable for the year ended 30 June 2007 to US42 cents, an increase of 75% over the previous year.
The Board has also requested to place before shareholders at the upcoming AGM in November 2007 a resolution seeking approval to subdivide the issued capital of the company on the basis that each existing share be subdivided into three shares and each existing option be subdivided into three options each. The share split will benefit shareholders by increasing the liquidity and affordability to investors of the company's shares. Further details will be provided in the notice of meeting materials that will be circulated to shareholders prior to the AGM.
Net Profit and Production comparison by half year and full year, FinancialYears 2007 and 2006 1H 2007 2H 2007 FY 2007 FY2006 FY Change Net Profit after tax and $85.4m $101.8m $187.2m $85.6m 119% minorities PGM Production (4E) (ounces) 277,155 253,571 530,726 447,693 19%
Revenues from ordinary activities for the year rose 67% to $710.8 million (comprising sales revenue of $690 million and interest and other income of $21 million) from $426 million (sales revenue $417 million and interest and other income of $9 million). The increased revenue was due to a 19% increase in PGM production and a 39% increase in the average PGM basket price over the year.
As outlined in the table above, this year's performance has shown a stronger first half production for the year as the Group's expansion program was interrupted by short-term industrial action in the second half coupled with a strategic decision in January 2007 to temporarily focus on increasing mine development to provide increased redundancy and flexibility for the longer-term. Management's focus on development is to ensure that the Group's ongoing growth profile is achieved in a sustainable and economic manner. The increase in production in 2007 is largely attributable to the ongoing ramp-up at Everest and the new underground production ramping up at Marikana. The Group's existing operations are expected to continue to increase production and deliver around 15% additional production in FY2008.
On mine cash costs at $261.4 million reflects an increase in average group attributable unit costs to $470 per PGM ounce compared to $391 per PGM ounce in the previous year, despite labour and input cost pressures.
Cash Costs at Operations
Rand (4E) per ounce Rand (6E) per ounce Kroondal (P&SA1) 3,069 2,565 Marikana (P&SA2) 5,219 4,317 Everest 3,373 2,821 Mimosa US$381 $360 CTRP 2,377 1,587 Group Average* $470 $391
*Group average calculated using attributable production and dollar costs
Amortisation and depreciation was higher compared to FY 2006 at $39.5 million from $29 million, largely a consequence of the 19% increase in production and an increase in the rehabilitation provision at Marikana.
Interest income was 132% higher at $19.1 million, reflecting the increased cash reserves of the Group. Interest expense, which included a non-cash component of $3.7 million relating to the unwinding of the interest in the net present value of the Marikana and Kroondal rehabilitation provisions was $15.2 million. Interest expense includes interest paid on pipeline finance advanced from the smelters.
Cash balances of $287.6 million at 30 June 2007 are expected to increase progressively (subject to any corporate activity) in line with the Group's increased production profile for FY 2008. This together with the current RMB facility will provide Aquarius with the requisite funding for any future growth opportunities, balance sheet optimisation and for continued progressive dividends.
Group Financials by Operation
Kroondal Mimosa Marikana Everest CTRP Corporate Total
PGM ounces 219,674 77,224 66,187 163,938 3,703 - 530,726 (attributable)
$'Millions 279.5 210.4 85.4 121.7 6.0 8.8 710.8 Revenue (net of FX sales variance) Cost of sales:
On mine cash costs (93.6) (77.7) (47.9) (40.0) (2.2) - (261.4)
Amortisation and (9.5) (9.2) (9.4) (3.0) (0.7) - (31.8) depreciation Gross profit 176.4 123.5 28.1 78.7 3.1 8.8 418.6 Amortisation of (6.3) - (0.8) (0.6) - - (7.7) fair value Gross profit after 170.1 123.5 27.3 78.1 3.1 8.8 410.9 FVU Corporate admin - - - - - (8.9) (8.9) and other costs
Foreign currency (0.3) 0.2 - (2.1) - (0.1) (2.3) gain/(loss)
Finance charges - (3.5) - (0.7) - (11.0) (15.2)
Profit/(loss) 169.8 120.2 27.3 75.3 3.1 (11.2) 384.5 before tax Tax Expense (90.9) Profit/(loss) 293.6 after tax Minority interest (106.4) Profit/(loss) after minority 187.2 interest Cash balances
Aquarius Group cash balances increased by $125 million since 30 June 2006 to $287.6 million at 30 June 2007. Cash holdings in the Group comprise:
AQP $78.0 million AQPSA (100%) $162.1 million
Mimosa Investments (50%) $47.5 million
Total $287.6 million
Major factors (other than mine operations) that impacted on the movement in cash included:
Acquisition of 3.5% of AQPSA AQP $50 million Income tax paid AQPSA/Mimosa ($59 million) Dividends paid AQP ($25 million) Interest income Group $19 million Interest expense Group $12 million Share loan repayments/options exercised AQP $6 million Capital expenditure Group ($43 million) Group Debt
As at 30 June 2007, group debt comprised the following facilities:
R450 million loan facility (main facility)
R200 million standby facility
R50 million guarantee facility
Interest bearing debt:
Group interest bearing debt (excluding pipeline advances) for the year at $27 million comprised the following:
RMB facility $27 million
Rand US Dollar Exchange Rate
The US Dollar was flat against the Rand year on year at 7.10, however there was considerable volatility in the rate during the year, with highs close to 8.0 and lows at 6.7.
Platinum Group Metal Prices ($ per ounce)
PGM prices in US Dollar terms continued to perform well during the year. Platinum, palladium, rhodium and gold all moved higher during the year. Platinum closed the year 4% higher at $1,273 per ounce, whereas palladium was 18% higher at $365 per ounce, and rhodium doing best of all, up 34% to $6,250 per ounce. Gold added a modest 4% over the year to close at $651 per ounce.
The South African PGM basket price averaged 32% higher for the year at US$1,360 per 4PGE ounce driven by strong rhodium and platinum prices in particular. In Zimbabwe (where the ratio of metals is lower in platinum and rhodium and higher in palladium), the basket price for the year averaged 31% higher for the year at US$974per 4PGE ounce.
The PGM (4E) basket (platinum, palladium, rhodium and gold) comprises the principal revenue driving commodities produced; in addition, economic quantities of ruthenium, iridium, copper, nickel, cobalt and chromite are also produced, with revenues used to offset costs. These metals also enjoyed healthy gains over the year demonstrated in the PGE(6E) basket after by-product costs detailed in the table above.
FINANCIALS Aquarius Platinum Limited Consolidated Income Statement Year ended 30 June 2007 $'000 Half year ended Year ended Note: 30/06/07 31/12/06 30/6/07 30/6/06 Aquarius PGM Production 253,570 277,156 530,726 447,693(attributable ounces) Revenue (i) 380,028 330,774 710,802 426,569
Foreign exchange gain/(loss) (ii) 3,881 (2,914) 967 13,228
Cost of Sales (iii) (154,416) (138,822) (293,238) (223,064) Gross Profit 229,493 189,038 418,531 216,733
Amortisation of fair value (iv) (3,839) (3,756) (7,595) (7,162) uplift of mineral properties
Gross profit after amortisation of fair value 225,654 185,282 410,936 209,571uplift Admin & other operating (v) (5,378) (3,574) (8,952) (8,027)costs Other FX movements (vi) (6,906) 4,598 (2,308) 913 Finance costs (vii) (7,896) (7,322) (15,218) (10,383) Profit before tax 205,474 178,984 384,458 192,074 Income tax expense (44,686) (46,175) (90,861) (51,071) Profit after tax 160,788 132,809 293,597 141,003 Minority interest (viii) (58,936) (47,438) (106,374) (55,373) Net profit 101,853 85,371 187,223 85,630 EPS (basic - cents) 118.0 100.4 218.5 100.9
Notes on the June 2007 Consolidated Income Statement
Sales revenue was higher due to increased PGM ounces (additional 83,033 PGM ounces) and higher PGM basket prices.
Foreign exchange variances caused by the difference between revenue recorded at time of production to cash received at the end of the four month pipeline.
Cost of sales reflects increased production and a 9.5% increase in the average on mine cash cost per PGM ounce compared to the previous year.
Amortisation of fair value of mineral properties at Kroondal, Marikana and Mimosa.
Administration and other costs are higher due to increased corporate activity
Reflects foreign exchange movements on net monetary assets.
Finance costs include $7.3 million of pipeline finance which is higher in line with the growth in the Groups PGM sales. Also included is $3.7 million of non cash interest expense representing the unwinding of interest on the rehabilitation provisions.
Reflects profit of AQPSA attributable to minority interests SavCon (26.0%) and Impala Platinum (20%), totalling 46%. Minority interests reduced from 49.5% in April 2007 to 46% following conclusion of the 3.5% purchase of AQPSA's equity from the SavCon consortium.
Aquarius Platinum Limited Consolidated Cash flow Statement Year ended 30 June 2007 $'000 Half year ended Financial year ended Note: 30/06/07 31/12/06 30/06/07 30/06/06 Net operating cash inflow (i) 164,214 159,026 323,240 175,531 Net investing cash outflow (ii) (68,201) (25,489) (93,690) (112,880) Net financing cash outflow (iii) (69,649) (36,895) (106,544) 27,161
Net increase (decrease) in cash held 26,364 96,642 123,006 89,812
Opening cash balance 263,563 162,425 162,425 75,251
Exchange rate movement on cash (iv) (2,264) 4,496 2,232 (2,638)
Closing cash balance 287,663 263,563 287,663 162,425
Notes on the June 2007 Consolidated Cash flow Statement
Net operating cash flow includes inflow from operations ($373 million), tax paid ($59 million) and net interest income of $7 million.
Net investing cash flow includes payments for mine development and development costs ($40 million), mine-site rehabilitation ($4 million) and the purchase of an additional 3.5% equity interest in AQPSA, ($50 million).
Net financing cash flow includes repayment of shareholder loans at AQPSA level ($88 million), payment of dividends ($25 million) and proceeds on the issue of shares following the exercise of employee options under the Company's Option Plan $6 million.
Exchange rate movement reflects movement of Rand against the US Dollar.
Aquarius Platinum Limited Consolidated Balance Sheet At 30 June 2007 $'000 Financial year ended Note: 30/06/07 30/06/06 Assets Cash assets 287,663 162,425 Current receivables (i) 100,573 66,722 Other current assets (ii) 26,127 19,827 Property, plant and equipment (iii) 207,360 206,626 Mining assets (iv) 311,425 247,601 Other non-current assets 12,026 6,994 Total assets 945,174 710,195 Liabilities Current liabilities (v) 50,676 35,463 Non-current payables (vi) 54,228 130,104 Non-current interest-bearing liabilities (vii) 35,321 45,372 Other non-current liabilities (viii) 172,404 105,419 Total Liabilities 312,629 316,358 Net assets 632,545 393,837 Equity Parent entity interest 456,138 315,559 Minority interest 176,407 78,278 Total Equity 632,545 393,837
Notes on the June 2007 Consolidated Balance Sheet
Reflects debtors receivable on PGM concentrate sales. Increase reflects increased production from the Group's mines.
Reflects PGM concentrate inventory.
Reflects Mimosa, Marikana, Kroondal, Everest and CTRP plants.
Mining assets reflects mine development expenditure on Kroondal, Mimosa, Marikana and Everest
Includes tax payable ($5 million), trade creditors ($45 million).
Includes non interest bearing portion of AQPSA shareholder debt (Impala Platinum $21 million) and SavCon ($31 million).
Includes interest bearing debt payable to RMB ($27 million), and lease liability $7.7 million.
Reflects deferred tax liabilities ($103 million), provision for closure costs ($69 million).
OPERATIONSProduction
The chart below illustrates the increases in annual production, and the positive impact enjoyed primarily from the ongoing ramp-up at Everest.
Production of PGMs attributable to shareholders of Aquarius increased 19% to 530,726 PGM ounces from 447,693 ounces. All mines enjoyed increased production, with the exception of Kroondal where attributable production was unchanged. The tables below compare production by operation and attributable to Aquarius, over the four quarters and year on year.
Production by Mine
Quarter Ended Full Year Ended PGMs
Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY 2006 FY 2007 %
Kroondal 121,713 117,189 102,079 98,370 439,444 439,351 Flat Marikana 30,865 39,077 30,148 32,286 85,912 132,376 +54% Everest 41,717 41,191 40,107 40,923 97,031 163,938 +69% Mimosa 42,733 33,345 34,760 42,732 142,407 154,448 +8% CTRP 1,711 1,866 1,954 1,877 6,234 7,408 +19% Total 238,739 232,668 209,048 217,066 771,028 897,521 +16%
Production by Mine Attributable to Aquarius
Quarter Ended Full Year Ended PGMs
Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY 2006 FY 2007 % +/-
Kroondal 60,856 58,594 51,039 49,185 219,722 219,674 Flat Marikana 15,432 19,538 15,074 16,143 56,617 66,187 +17% Everest 41,717 41,191 40,107 40,923 97,031 163,938 +69% Mimosa 21,367 16,672 17,380 21,366 71,204 77,224 8% CTRP 855 933 977 938 3,119 3,703 19% Total 140,227 136,928 124,577 128,994 447,693 530,726 +19%
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 54%)
P&SA1 at Kroondal
Safety
The 12-month rolling average DIIR for the year improved to 0.75 from 0.96 in the previous year. Regrettably a fatality occurred during the financial year when a Murray & Roberts Cementation employee was fatally injured in a conveyor belt accident.
Production
Underground production increased 8% year-on-year to 6,129,000 tons and open-pit production increased 18% to 495,000 tons, resulting in a total 10% increase in tons to 6,624,000 tons. The average head grade over the year was marginally lower at 2.81 g/t, in part due to the increased share of lower-grade open pit production in the mix, increasing to 7.5% from 6.9%, but importantly also due to a higher proportion of production coming from K5 Shaft. The geology is more complex at K5 Shaft and a number of down throw faults have been encountered in the main decline. Recoveries were 1% lower at 77%, although these did see an improvement in the final quarter of the financial year to 77% from 76% in the third quarter. Total PGM production was flat year-on-year at 439,350 PGM ounces with 219,675 PGM ounces attributable to Aquarius.
Kroondal: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs PGMs (4E) attributable to Ended (4E) Aquarius 2007 263,930 127,048 46,097 2,275 439,350 219,675 2006 262,263 128,318 46,663 2,201 439,444 219,722 2005 194,290 93,984 34,916 1,540 324,730 162,365* 2004 143,408 68,223 24,913 1,081 237,625 160,190**
*Reflects full impact of P&SA (12 months production at 50%)
**Reflects P&SA effective November 2003 (4 months production at 100% & 8 months production at 50%)
Revenue
The average PGM basket price for the year increased 34% to $1,386 per PGM ounce. The basket price rose steadily during the year, averaging $1,520 per PGM ounce in the final quarter. This resulted in a 46% increase in mine revenue to R4.0 billion for the year (Aquarius share: R2.0 billion). The cash margin for the year rose to 66% from 59%.
Operating Costs
Cash cost per ROM ton increased by 14% to R213 per ton due to higher mining and labour costs and an increase in on-reef development. Consequently, cash costs per PGM ounce, impacted by lower grades and recoveries, increased 20% to R3,069. During the year Kroondal completed considerable development, which is attributed to the profit and loss account and not capitalised. These costs are included in the table below.
P&SA1 at Kroondal: Operating Costs
Rand 4E per ounce Rand 6E per ounce Rand 6E per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products (Ni&Cu) FY 2007 3,069 2,526 2,351
Operating cash costs include ledging and primary development costs of R393 per PGM ounce (up 34% on the previous year), secondary development costs of R71 per PGM ounce (up 39% on previous year) and engineering infrastructure costs of R216 per PGM ounce (up 43% on previous year). The stoping cost was R2,388 per PGM ounce, a 16% increase compared to the previous year. It should be noted that operating costs continue to include costs associated with the new K5 Shaft of R130 per PGM ounce. The K5 Shaft is in a ramp-up phase and therefore attracts high relative unit costs.
Rand per PGM ounce FY 2006 FY2007 Variance % Cash Costs 2,565 3,069 +20%
Ledging & Primary Development Costs -294 -393 +34%
Secondary Development Costs -51 -71 +39%
Engineering Infrastructure Costs -151 -216 +43%
Cash Costs After Adjustments 2,068 2,388 +15% K5 Shaft Cost 0 130 -
Cash Cost After Adjustments for K5 2,068 2,258 +9%
P&SA2 at Marikana Platinum Mine
Safety
The 12-month rolling average DIIR for the year deteriorated slightly to 0.36 from 0.31 in the previous year. Marikana Mine's safety performance remains credible as it also reported a fatality free year. The mine achieved 1.3 million fatality free shifts at the end of the financial year.
Production
Open-pit production increased, 40% to 1,409,000 tons. Underground operations continued to ramp-up during the year with production increasing more than three-fold to 708,000 tons. The ratio of production over the year shifted favourably towards underground material which represented approximately 50% during the final quarter of total tonnes processed. This compares to 14% underground in the previous year. The average head grade remained constant for the year at 3.19 g/t compared to 3.20 g/t in the previous year. The open pit production will be further scaled down in the 2008 financial year to 50,000t per month where it will stabilise until the reserve is mined out in 2015. It is expected that the grade will slightly decrease in 2008 financial year to approximately 3.15 g/t as the higher grade open pit production is reduced. Recoveries were 5% lower at 64% due to increased open pit oxidised material being processed. The recoveries are planned to improve in 2008 financial year as underground production continues to ramp-up. Total PGM production was up 54% year-on-year to 132,375 PGM ounces with 66,187 PGM ounces attributable to Aquarius. Year on year attributable comparisons are not meaningful due to the implementation of the P&SA2 at Marikana in September 2005.
Marikana: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs PGMs (4E) attributable to Ended (4E) Aquarius 2007 80,903 37,719 12,750 1,003 132,375 66,187 2006 52,757 24,461 8,023 671 85,912 56,617* 2005 63,868 26,413 8,061 819 99,161 99,161 2004 57,774 22,598 6,062 742 87,176 87,176
*Reflects impact of P&SA (effective September 2006)
Revenue
The average PGM basket price for the year increased 33% to $1,344 per PGM ounce. Over the year, however, the PGM basket rose steadily, averaging $1,453 per PGM ounce in the final quarter. This resulted in a 135% increase in mine revenue to R1.2 billion for the year (Aquarius share: R612 million). The cash margin for the year continued its strong upwards momentum in the 2007 financial year to 44%, compared to 16% in 2006 and negative 10% in 2005.
Operating Costs
Cash cost per ROM ton reduced by 2% due to increased underground volumes. Cash costs per PGM ounce for the year were increased 5% to R5,219 per PGM ounce due to lower recoveries.
Marikana: Operating Costs
Rand (4E) per ounce Rand (6E) per ounce Rand (6E) per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products (Ni&Cu) FY 2007 5,219 4,317 4,005 Everest Platinum MineSafety
The 12-month rolling average DIIR for the year improved to 0.62 from 0.73 in the previous year. Regrettably, two fatalities occurred at Everest during the year. On 3rd August 2006 an Underground Team Leader suffered fatal injuries as a result of a fall of ground. The DME Report concluded that the requisite safety management systems were in place, ascribing the underlying cause of the accident to poor judgement on the part of the deceased in that he entered an area that was not yet supported to standard. On 20 January 2007 a Rock Drill Operator was fatally injured when he was struck by an underground load-haul-dumper. The DME Report concluded that the requisite safety management systems were in place, ascribing the basic cause of the accident to the deceased taking an unsafe position and not following procedures. The implementation of remedial actions arising from both investigations have been completed.
Production
Underground production increased significantly to 1,805,000 tons for the year, compared to 471,000 tons in the previous year. Open pit operations, in-line with plan, reduced production, to 589,000 tons for the year compared to 991,000 tons in the previous year. Underground production is now the primary tonnage source, accounting for 92% of all tons in the fourth quarter. The current open pit reserve is planned to be mined out in October 2007. The average head grade over the year fell to 2.89 g/t from 3.04 g/t due to significantly poorer quality production from the open pits, and ongoing development tons from underground operations. Recoveries increased by 13% to 77% due to higher quality underground tons dominating the feed. It is expected that recoveries will increase to 79% in the 2008 financial year as underground production becomes the only feed material for processing. Total PGM production was up 69% year-on-year to 163,937 PGM ounces, 100% attributable to Aquarius.
Everest: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs PGMs (4E) attributable to Ended (4E) Aquarius 2007 94,398 52,527 15,534 1,478 163,937 163,937 2006 56,118 32,108 7,821 984 97,031 97,031
Revenue
The average PGM basket price for the financial year was up 24% to $1,286 per PGM ounce. This resulted in mine revenue of R1.5 billion (Aquarius share: 100%). The cash margin for the year increased marginally to 62%.
Operating Costs
Cash costs per ROM ton increased 16% to R187 per ton in line with the increased ratio of higher cost underground tons. Cash costs per PGM ounce increased to R3,373 in line with the increased cost for underground tons and due to a lower grade.
Everest: Operating Costs*
Rand (4E) per ounce Rand (6E) per ounce Rand (6E) per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products (Ni&Cu) FY 2007 3,373 2,821 2,584
*Includes calculation for IFRIC-4 (Determining whether an Arrangement contains a lease) by R157 per PGM ounce.
MIMOSA INVESTMENTS (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The DIIR for the year deteriorated to 0.41 from 0.28 for the previous year. Regrettably, there were three fatalities during the financial year. A fatality occurred in the second quarter when an Underground Team Leader was fatally injured by a fall of ground. In the fourth quarter, two fatalities occurred underground when a Safety Health Environmental Officer and an Acting Ventilation Officer succumbed to asphyxia in a previously abandoned underground area where pumping was being carried out to reopen it. An official investigation is underway; however, the results have not yet been released.
Production
Underground operations hoisted an 8% increase in production to 1,847,000 PGM ounces. Tons processed increased 10% to 1,692,000 tons, with the balance going to the stockpile which totalled 361,000 tons at the end of the financial year. The average head grade fell 1% to 3.66 g/t. Recoveries remained flat at 77%. PGM production for the year increased 8% to 154,448 ounces (Aquarius attributable 77,224 PGM ounces).
Mimosa: Metal in concentrate produced (PGM ounces)
Year Pt Pd Rh Au PGMs PGMs (4E) attributable to Ended (4E) Aquarius 2007 78,240 59,517 6,067 10,613 154,448 77,224 2006 72,232 54,722 5,577 9,876 142,407 71,204 2005 66,742 49,259 5,156 9,010 130,167 65,084 2004 61,422 44,697 5,036 8,234 119,389 59,697 Revenue
The average PGM basket price for the year was 35% higher at $974 per PGM ounce. This resulted in mine revenue of US$199 million (Aquarius share: 50%). The cash margin for the year was 74%.
Operating Costs
Cash costs per ounce for the year increased 13% to $381 per PGM ounce. After by-product credits cash costs per 4 PGM ounce were lower at -$123 per PGM ounce compared to $100 per ounce in the previous year. This reduction was due to the extremely strong nickel and copper prices throughout the year.
Mimosa: Operating Costs
US$ (4E) per ounce US$ (6E) per ounce US$ (6E) per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products (Ni&Cu) FY 2007 381 360 -107 Wedza Phase IV Upgrade
Satisfactory progress has been achieved as regards the mining side of the project. Most of the equipment is now on site and being commissioned.
The process side of the project is facing challenges. The project scope has been revised twice due to concerns about the re-use of old equipment and slow progress is being registered as a result. The (RSA based) contractors who were awarded most of the work are pressed due to the difficulties of operating in Zimbabwe. Consequently, completion of the project will be delayed until the last quarter of calendar 2007. The capital cost has escalated by $5.7 million to $28.9 million.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD (Aquarius Platinum 50%)
Chromite Tailings Retreatment Plant (CTRP)
Safety
The Plant recorded a DIIR of zero for the year and has done so since operations began.
Production
Over the year recoveries reduced to 31%, due to the unsatisfactory blending of arisings and dump materials. Tons processed, however increased in grade to 4.32 g/t for the year compared to 3.21 g/t in the previous year, with volumes, increasing 12% to 182,000 tons. This negated the reduction in recoveries to increase production by 19% to 7,408 PGM ounces (Aquarius attributable: 3,704 PGM ounces).
CTRP: Metal in concentrate produced (PGM ounces)
Year Ended Pt Pd Rh Au PGMs (4E) PGMs (4E) attributable to Aquarius
2007 4,512 1,629 1,252 15 7,408 3,704 2006 3,799 1,378 1,044 13 6,234 3,119 2005 1,321 439 353 4 2,117 1,059 Revenue
The PGM basket price for the year increased by 41% to $1,704 per PGM ounce. Reflecting increased production and basket prices, revenue increased 80% to R77 million (Aquarius attributable R38.5 million). The cash margin for the year increased to 77% from 63%.
CTRP: Operating Costs
Cash costs per ounce for the year decreased 5% to R2,377 per PGM ounce.
CTRP: Operating Costs
Rand 4E per ounce Rand 6E per ounce Rand 6E per ounce
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) net of by-products (Ni&Cu) FY 2007 2,377 1,587 1,355 CORPORATE
Agreement with Bakgaga Mining
On 23rd October 2006 Aquarius announced that through its wholly owned subsidiary Aquarius Platinum (SA) Corporate Services (Pty) Ltd ("ASACS") it had 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.
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.
Appointment of New Broker
On 13th December 2006, Aquarius announced the appointment of Investec Bank (UK) Limited and Morgan Stanley & Co International Limited as joint corporate brokers to Aquarius on the London Stock Exchange.
Further Expansion in Production Announced at Mimosa
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, is expected to increase annual PGM production from 168,750 PGM ounces to 195,000 PGM ounces. It is due for completion by the end of the 2007 calendar year.
Directorate Changes
On 12th March 2007, Patrick Quirk resigned as a director of the Company to concentrate on his private business interests. The directors wish to record their sincere appreciation for the outstanding contribution Mr. Quirk has made to the Company in his capacity as director over the last five years, and wish him well in his future endeavours.
AQPSA Management Changes
In March 2007, Gert Ackerman retired as Managing Director of AQPSA. He continues to work for the group as a consultant, primarily involved with the implementation of social, labour and development plans.
Mr Anton Wheeler has in turn been appointed Managing Director of AQPSA. Mr Wheeler joined Aquarius in April 2006 as Operations Director, responsible for the day-to-day management of Aquarius Platinum's South African operations.
Aquarius completes purchase of 3.5% of South African subsidiary from SavCon
On 26th April 2007, Aquarius announced the completion of the acquisition of a 3.5% equity interest in AQPSA from SavCon for a cash consideration of ZAR 342.5 million, as first announced in November 2006.
As a result of the Transaction, Aquarius increased its ownership of AQPSA from 50.5% to 54%. The number of new Aquarius shares to which SavCon will be entitled in exchange for its equity interest of 26% in AQPSA will reduce proportionately by 2,918,590 shares to 21,680,952 shares. The conditions for ultimate disposal of SavCon's 26% in AQPSA and the take-up of its Aquarius shares in terms of the Final Phase remain unchanged.
Contractor Dispute with Moolman Mining
Quarterly updates concerning the ongoing contractor dispute with Moolman Mining are made in quarterly reports. Please refer to these reports for the updates throughout the 2007 financial year.
More information on all the corporate matters can be found at www.aquariusplatinum.com
100% of Kroondal P&SA1 Marikana P&SA2 Everest Mimosa CTRP Operations Statistical Information 12 12 12 12 12 12 12 12 12 12 Unit months months months months months months months months months months Jun June Jun June Jun June Jun June Jun June 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Safety Rate/ DIIR 200,000 0.75 0.96 0.36 0.31 0.62 0.73 0.41 0.28 0 0 man hours Revenue Gross R m in SA revenue / $m in 4,016 2,742 1,224 520 1,468 550 199 113 Zim 77 43 PGM basket $/oz 1,386 1,033 1,344 1,007 1,286 1,037 974 720 Price 1,704 1,207 Gross cash % 66 59 44 16 62 61 74 64 margin 77 63 Nickel $/lb 17.20 7.02 17.20 7.02 17.20 7.02 14.64 6.65 Price 17.20 7.02 Copper $/lb 3.21 2.29 3.21 2.29 3.21 2.29 3.22 1.94 Price 3.21 229 Ave R/$ 7.18 6.37 7.18 6.37 7.18 6.37 - - rate 7.18 6.37 Cash Costs on-mine R/ton 213 187 341 348 187 161 - - 97 96 Per ROM ton $/ton 30 29 47 55 26 25 35 31 13 15 Per PGM R/oz 3,069 2,565 5,219 4,980 3,373 2,390 - - 2,377 2,507 (3E+Au) $/oz 427 403 727 782 470 375 381 336 331 394 Per PGE R/oz 2,526 2,111 4,317 4,125 2,821 2,057 - - 1,587 1,766 (5E+Au) $/oz 352 331 601 648 393 323 360 318 221 277 Capex Current/ R'000s 250,074 65,673 128,048 8,521 107,489 7,108 - - - 950 Sustaining 100% $'000s 34,821 10,309 17,830 1,338 14,967 1,116 7,803 7,999 - 149 Expansion R'000s - 66,732 72,855 81,321 25,441 391,972 - - - 100% $'000s - 10,476 10,144 12,766 3,542 61,532 5,665 10,471 - - Mining Processed Underground ROM ton 5,920 5,639 708 178 2,593 471 1,692 1,532 - '000s Open Pit ROM ton 398 403 1,318 1,072 357 991 - - - '000s Total ROM ton 6,319 6,041 2,026 1,250 2,950 1,462 1,692 1,532 182 162 '000s Grade Plant Head g/t PGM 2.81 2.89 3.19 3.20 2.89 3.04 3.66 3.71 4.32 3.21 Recoveries % 77 78 63.69 67.00 77 68 78 78 31 40 PGM Production Platinum Ozs 263,930 262,263 80,903 52,757 94,398 56,118 78,240 72,232 4,512 3,799 Palladium Ozs 127,048 128,318 37,719 24,461 52,527 32,108 59,517 54,722 1,629 1,378 Rhodium Ozs 46,097 46,663 12,750 8,023 15,534 7,821 6,067 5,577 1,252 1,044 Gold Ozs 2,275 2,201 1,003 671 1,478 984 10,613 9,876 15 13 Total PGM Ozs 439,350 439,444 132,375 85,912 163,937 97,031 154,448 142,407 7,408 6,234 (3E+Au) Total PGE Ozs 533,859 534,069 160,048 103,615 196,030 112,717 163,605 1,587 11,101 8,851 (5E+Au) Base Metals Production Nickel Tons 436 435 220 146 224 138 2.090 1,958 12 4 Copper Tons 190 191 119 84 111 74 1,742 1,638 10 2 Chromite Tons '000s 64 59 (000) 353 447 140 135 - - - - 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 (Senior Independent Director)
Kofi Morna Non-executive Zwelakhe Mankazana Alternate to Kofi Morna Audit/Risk Committee Sir William Purves (Chairman)David DixEdward HaslamNicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)Nicholas SibleyNomination Committee
The full Board comprises the Nomination Committee
Company SecretaryWilli BoehmAQPSA ManagementStuart Murray Executive Chairman Anton Wheeler Managing Director Ayanda Khumalo Finance Director
Graham Ferreira General Manager Admin & Company Secretary
Hugo HĦll General Manager Everest Willie Byleveld General Manager Marikana Gordon Ramsay General Manager Metallurgy Rudi Rudolph General Manager Kroondal Gawie de Wet General Manager Engineering
Mimosa Mine Management
Alex Mhembere Managing Director
Winston Chitando Finance Director
Herbert Mashanyare Technical Director
Peter Chimboza Operations Director Issued Capital
At 30 June 2007, the Company had on issue:
85,485,101 fully paid common shares and 1,098,652 unlisted options
Substantial Shareholders 30 June 2007 Number of Shares Percentage
Impala Platinum Holdings Ltd 7,127,276 8.34 Nutraco Nominees Limited 5,649,694 6.61 Trading InformationISIN number BMG0440M1029Broker (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, Canary Wharf 1 William Street Sandown London, E14 4QW Perth WA 6000 Sandton 2196 Telephone: +44 (0) 20 7425 8000 Telephone: +61 (0)8 Telephone: +27 (0)11 Facsimile: +44 (0)20 7425 8990 9488 1400 286 7326 Facsimile: +61 (0)8 Facsimile: +27 (0)11 9488 1478 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
54% 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 2007Postal 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, Australia
Postal Address PO Box 485, South Perth, WA 6151, Australia.Telephone: +61 (0)8 9367 5211Facsimile: +61 (0)8 9367 5233Email: [email protected]$ Australian Dollar Aquarius Aquarius Platinum Limited /AQP 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 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 ton, measurement unit of grade (1g/t = 1 part per million) JORC Australasian code for reporting of Mineral Resources and Ore Reserves code 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 NOSA National Occupational Safety Association PGE(s) Platinum Group Elements plus Gold. Five metallic elements commonly (6E) 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 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 ton (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
Aquarius Platinum Corporate Services Pty Limited
+61 (0)8 9367 5211
In the United Kingdom and South Africa
Nick BiasAquarius Platinum Limited+ 44 (0)7887 920 530
or visit: www.aquariusplatinum.com
AQUARIUS PLATINUM LIMITEDRelated Shares:
AQP.L