7th Aug 2008 07:00
AQUARIUS PLATINUM LIMITED ANNUAL RESULTS 2008
Full Year Results: 30 June 2008
Comparative data for earning per share and dividends paid for the 2007 financial year are adjusted for the 3-for-1 share split approved by shareholders on 23 November 2007.
Highlights
* Group production at 500,203 PGM ounces
* Record net profit, up 26% to $236 million (US 92.0 cents per share)
* Net profit of $267 million before an attributable once-off tax payment of $31
million, which represented part consideration of the repurchase of Implats
AQPSA shareholding
* Net mine operating cash flow up 29% to $505 million
* Full year dividend up 43% to US 20 cents per share
Operational
* Group attributable production at 500,203 PGM ounces (2007: 530,276 PGM ounces)
* Record basket prices at all operations
* Increase in underground production at all operations
* Improved margins at Kroondal and Everest, despite industrial relations and
electrical supply issues
* Shift to mine operator at Everest, and new proactive labour structures and
bonus systems implemented at Kroondal, Marikana and Everest
* Operational management bolstered with new appointments
Financial
* Revenue increased 30% to $919 million
* Net mine operating cash flow up 29% to $505 million from $391 million
* Group cash balances at $171 million
* US10 cents per share final dividend declared, payable on 3rd October 2008
(2007: US10 cents)
* Total 2008 dividend (interim and final) up 43% to US20 cents (2007: US14 cents)
Strategic
* Repurchase of Implats stakes in AQP and AQPSA increasing AQP's interest to
67.5% from 54% and raising BEE ownership in AQPSA to 32.5%
* Acquisition of a 50% interest in Platinum Mile tailings project
* Three-for-one share-split
* Mimosa Wedza Phase V expansion completed
Commenting on the full year results, Stuart Murray, CEO of Aquarius Platinumsaid, "We have increased our operating profits by 43% to $267 million before aonce-off tax charge of $31 million and increased our gross margin to 61%; aperformance that, along with the performance of our peers in the platinummining sector, surely stands the sector apart from the rest of the market. Thisperformance has occurred in a climate of unprecedented cost pressures anddifficult industrial relations issues at our South African mines. Further, wehave increased the dividend by 43% to US 20 cents and including the repurchaseof shares in the subsidiary and parent, delivered an equivalent adjustedearnings of US 104 cents per share. Despite a challenging year, I believe thatAquarius is on a strong footing to recover from the production set-backs of2008 and pick up again with the march for value driven growth in the newfinancial year. Further, I believe that opportunities in the platinum sectorhave never been more interesting, even if the operating remains challenging."Aquarius announces consolidated earnings for the year to 30 June 2008 of $236million, equal to US92.0 cents per share. This represents a 26% increase innet profit over the previous year. The increase is attributed to highercommodity prices offset by a 6% reduction in attributable production to 500,203PGM ounces and a once-off charge against earnings of $31 million paid asAquarius' portion of a Secondary Tax on Companies charge on the repurchase ofImplats shares in Aquarius' subsidiary, AQPSA. In the 2008 financial year, thegroup average 4E PGM basket price (platinum, palladium, rhodium and gold) roseto US$1,762 per ounce compared to US$1,293 in the previous year.Mine operations delivered net operating cash flow of $505 million for the year,compared to $391 million in the previous year due to higher commodity prices. The increased cash flow allowed the Group to acquire an interest in thePlatinum Mile Tailings Project; repay inter-group shareholder loans; and fundmine development and rehabilitation at the Group's mines. In April 2008, thegroup also ascribed $210 million of cash funds with $370 million of equity and$200 million new debt towards the total $780 million repurchase considerationof Implats' 21,425,898 shares in Aquarius Platinum Limited (approximately 8.4%of the outstanding share capital at the time), and the repurchase by AQPSA ofImplats' 20% stake in AQPSA. This increased Aquarius' interest in AQPSA from54% to 67.5% and raised BEE ownership to 32.5% resulting in an increased shareof earnings from AQPSA for AQP.The Directors have declared a final dividend of US10 cents (2007: US10 cents)per share payable on 3rd October 2008 to shareholders registered on 12thSeptember 2008. This brings the total dividend payable for the year ended 30June 2008 to US20 cents (2007: US 14 cents), an increase of 43% over theprevious year.Net Profit & Production Comparison by Half Year & Full Year (FY 2008 & 2008) 1H 2008 2H 2008 FY 2008 FY2007 FY Change
Net profit after tax attributable $106M $130M $236M $187M +26% to AQP Net profit before once-off STC tax $106M $161M $267M $187M +43%
payment PGM Production (4E) (ounces) 277,183 222,390 500,203 530,726 (6%) Revenues from ordinary activities for the year rose 30% to $919 million(comprising sales revenue of $891 million and interest and other income of $28million) from $709 million (sales revenue $690 million and interest and otherincome of $19 million). The increased revenue was due to a 36% increase in theaverage PGM basket price over the year.As outlined in the table above, this year's production was stronger in thefirst half, as the Group's expansion program was interrupted by industrialaction and electrical supply issues in the second half, notably at the EverestMine where the company moved from contractor mining to mine-operator. TheGroup's existing operations are expected to continue to increase production anddeliver an approximate 15% increase in production in FY2009.
On mine cash costs at $310 million reflects an increase in average group attributable unit costs to R4,553 per PGM ounce or $622 per PGM ounce compared to $493 per PGM ounce in the previous year.
Cash Costs at Operations
Rand (4E) per Rand (6E) per Rand (6E) per ounce less ounce ounce by-product Kroondal (P& 4,241 3,487 3,334 SA1) Marikana (P& 7,575 6,273 6,025 SA2) Everest 4,126 3,352 3,159 Mimosa (US$) 446 423 -49 CTRP 2,666 1,742 1,651 Platinum Mile 7,890 7,890 7,890 Group Average 4,553 3,691 3,116 (R) Group Average 622 510 431 ($)*
*Group average calculated using attributable production
Amortisation and depreciation was higher compared to FY2007 at $49 million from$39.5 million, largely a consequence of the change to mine operator mining atEverest.Interest income was 47% higher at $28.1 million, due to higher cash balances inthe group prior to the Implats buyback in May. Interest expense was $28.3million, including a non-cash component of $8.6 million relating to theunwinding of the interest in the net present value of mine site rehabilitationprovisions and $8.8 million on AQPSA's debt facilities. Interest expenseincludes interest paid on pipeline finance advanced from the smelters.
Group Financials by Operation
Kroondal Marikana Everest Mimosa CTRP Plat Corp Total Mile PGM ounces 195,558 62,791 157,994 75,416 4,924 3,520 500,203(attributable) Revenue (net of FX sales 347.4 112.4 295.5 125.7 11.1 6.6 20.3 919.0 variance) On mine cash (113.3) (65.0) (89.2) (35.1) (3.9) (3.8) (310.3)costs
Amortisation and (10.2) (10.9) (16.7) (3.4) (0.3) (0.8) (42.3)
depreciation Gross profit 223.9 36.5 189.6 87.2 6.9 2.0 20.3 566.4
Amortisation of (5.6) (0.4) - (0.5) - - (6.5) fair value Gross profit 218.3 36.1 189.6 86.7 6.9 2.0 20.3 559.9 after FVU Other income - - - (0.1) 1.1 0.1 1.0 2.1 Corporate admin - - - - - - (11.2) (11.2) and other costs
Foreign currency 15.4 5.4 5.2 (11.2) (1.0) - 0.5 14.3
gain/(loss) Finance charges - - - - - (28.3) (28.3)
Profit/(loss) 233.7 41.5 194.8 75.4 7.0 2.1 (17.7) 536.8
before tax Tax Expense (173.2) Profit/(loss) 363.6 after tax Minority (127.1)interest Profit/(loss) after minority 236.5 interest Cash BalancesAquarius' operating mines generated net cash flows of $505 million during theyear. Together with a capital raising completed in April 2008 for $370 millionthrough the placement of 23,144,000 shares and a drawdown of $200 million froma new debt facility, Aquarius was able to fund its activities for the year. Major items greater than $50 million (other than mine operations) that impactedon cash flow included($ million) FY2008 Equity raising $370 Debt facilities raised $200 Implats share buyback ($734) STC charge ($46) Shareholder loan repayments ($55) Income tax paid ($130) Dividends paid ($60) Capital expenditure ($76) Group cash reserves at year end totalled $171 million and were held in thefollowing entities:($ million) 30 June 2008 AQP $30.5 ACS(SA) (100%) $5.2 AQPSA (100%) $92.8 Mimosa Investments (50%) $42.5 Total $171.0 Group Debt
Group interest bearing debt (excluding pipeline advances) for the year at $200 million comprised the following:
AQPSA debt facilities $200 million
Rand US Dollar Exchange Rate
The Rand weakened against the US Dollar year-on-year from 7.02 to 7.84; however, there was considerable volatility in the rate during the year, with a range between 6.50 and 8.15.
Platinum Group Metal Prices ($ 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 62% higher at $2,064 per ounce, palladium 28% higherat $467 per ounce, rhodium up 57% to $9,725 per ounce and even gold adding 44%to close at $934 per ounce.The South African and Zimbabwean PGM basket prices consequently saw significantincreases, averaging 39% higher for the year at US$1,890 per 4PGE ounce inSouth Africa and at US$1,358 per ounce in Zimbabwe. The group average basketprice for the year was $1,762 per 4PGE ounce.
Production
The chart below illustrates the annual production profile. Production decreasedin 2008 primarily due to industrial relations and electrical issues in thesecond half at South African operations; and a marginal fall at Mimosa due toelectrical supply, plant and equipment breakdowns, marginally offset by smallproduction increases at CTRP together with the addition of ounces from theacquisition of 50% of the Platinum Mile project.
Production of PGMs attributable to shareholders of Aquarius was 500,203 PGM ounces. The tables below compare production by operation and attributable to Aquarius over the four quarters and year-on-year.
Production by Mine
Quarter Ended Full Year Ended PGMs Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY 2007 FY 2008 Kroondal 106,493 101,542 100,020 83,062 439,351 391,117 Marikana 35,200 37,744 24,223 28,416 132,376 125,583 Everest 48,841 46,719 31,107 31,327 163,938 157,994 Mimosa 38,660 39,372 34,283 38,517 154,448 150,832 CTRP 2,681 2,816 2,309 2,044 7,408 9,850 Platinum Mile - - 2,006 5,035 - 7,041 Total 231,875 228,193 193,948 188,401 897,521 842,417
Production by Mine Attributable to Aquarius
Quarter Ended Full Year Ended PGMs Quarter 1 Quarter 2 Quarter 3 Quarter 4 FY 2007 FY 2008 Kroondal 53,246 50,771 50,010 41,531 219,674 195,558 Marikana 17,600 18,872 12,111 14,208 66,187 62,791 Everest 48,841 46,719 31,107 31,327 163,938 157,994 Mimosa 19,330 19,686 17,142 19,258 77,224 75,416 CTRP 1,340 1,408 1,154 1,022 3,703 4,924 Platinum Mile - - 1,003 2,517 - 3,520 Total 140,357 137,456 112,527 109,863 530,726 500,203 FINANCIALSAquarius Platinum LimitedConsolidated Income StatementYear ended 30 June 2008$'000 Half year ended Year ended Note 30/06/08 31/12/07 30/6/08 30/6/07 Aquarius PGM Production 222,390 277,813 500,203 530,726(attributable ounces) Revenue (i) 495,355 423,657 919,012 709,183 Cost of Sales (ii) (184,211) (175,662) (359,873) (300,833) Gross Profit 311,144 247,995 559,139 408,370 Other income 1,644 465 2,109 2,586 Corporate Admin & other (iii) (6,775) (3,692) (10,467) (8,972)costs Foreign exchange gains/ (iv) 22,354 (8,068) 14,286 (2,308)(losses) Finance costs (v) (19,352) (8,908) (28,260) (15,218) Profit before tax 309,015 227,792 536,807 384,458 Income tax expense (vi) (114,036) (59,178) (173,214) (90,861) Profit after tax 194,979 168,614 363,593 293,597 Minority interest (vii) (65,151) (61,968) (127,119) (106,374) Net profit 129,829 106,646 236,474 187,223 EPS (basic - cents) (viii) 50.40 41.58 91.98 72.84*
*Adjusted for three for one share split approved by shareholders on 23 November 2007
Notes on the June 2008 Consolidated Income Statement
(i) Sales revenue increase reflects higher PGM basket price achieved
(ii) Increase in cost of sales reflects impact of inflation and on mine cash cost increases
(iii) Corporate admin costs are higher due to increased activity including the transaction costs of $3 for the repurchase of shares in Aquarius and AQPSA
(iv) Increase in finance costs reflects increased pipeline finance on higher metal prices, interest on the new debt in place to part fund the Implats share buy-back
(v) Includes the net effect of a $28 million gain on adjusting revenue recorded attime of production at Kroondal, Marikana and CTRP to actual receipts receivedat the end of the four month pipeline and $11 million loss incurred by Mimosaon the revaluation of net monetary assets including the impact of thedepreciating Zimbabwean Dollar(vi) Income tax expense for the period for AQPSA and Mimosa including a "one off"$46 million ($31 million attributable to Aquarius) Secondary Tax on Companiescharge on the Implats share buyback
(vii) Minority interests reflect 46% outside equity interest of the Savannah Consortium (SavCon) and Impala Platinum Holdings Limited (Implats) in AQPSA reducing to 32.5% outside equity interest at the end of April 2008 on completion of the repurchase of Implats shares in AQPSA
(viii) Earnings per share is calculated on the post share split (3:1) as approved by shareholders in November 2007
Aquarius Platinum LimitedConsolidated Cash flow StatementYear ended 30 June 2008$'000 Half year ended Financial year ended Note: 30/06/08 31/12/07 30/06/08 30/06/07 Net operating cash inflow (i) 133,921 205,152 339,073 323,240 Net investing cash outflow (ii) (85,052) (32,996) (118,048) (93,690) Net financing cash outflow (iii) (224,784) (95,297) (320,081) (106,544) Net increase (decrease) in cash held (175,915) 76,859 (99,056) 123,006 Opening cash balance 368,682 287,663 287,663 162,425
Exchange rate movement on cash (iv) (21,811) 4,160 (17,651)
2,232 Closing cash balance 170,956 368,682 170,956 287,663
Notes on the June 2008 Consolidated Cash flow Statement
(i) Net operating cash flow includes inflow from operations ($505 million), taxpaid ($130 million and once-off $46 million Secondary Tax on Companies charge)and net interest income of $9 million(ii) Net investing cash flow includes payments for mine development and developmentcosts ($59 million), cash portion of the purchase consideration for a 50%interest in Platinum Mile Resources ($23 million), and redeemable deposits ($32million).(iii) Net financing cash flow includes net impact of the buyback of Implats shares inAQP & AQPSA: being payment to Implats $733 million, capital raising by AQP ofnet $362 million and a drawdown of $200 million by AQPSA from the new RMB debtfacility, repayment of shareholder loans at AQPSA level ($55 million), paymentof dividends ($60 million), net reduction in group debt $18 million., AQPSAcapital return - minority shareholders portion $15 million(iv) Exchange rate movement reflects movement of Rand against the US Dollar
Aquarius Platinum Limited Consolidated Balance Sheet At 30 June 2008 $'000 Financial year ended Note: 30/06/08 30/06/07 Assets Cash assets 170,956 287,663 Current receivables (i) 186,964 100,577 Other current assets (ii) 35,941 26,123 Property, plant and equipment (iii) 221,515 219,113 Mining assets (iv) 277,428 299,672 Other non-current assets (v) 15,599 12,026 Goodwill (vi) 58,505 - Total assets 966,908 945,174 Liabilities Current liabilities (vii) 267,517 54,725 Non-current payables (viii) 2,219 54,228
Non-current interest-bearing liabilities (ix) 1,752 31,272
Other non-current liabilities (x) 150,906 172,404 Total Liabilities 422,394 312,629 Net assets 544,514 632,545 Equity Parent entity interest 508,914 456,138 Minority interest 35,600 176,407 Total Equity 544,514 632,545
Notes on the June 2008 Consolidated Balance Sheet
(i) Reflects debtors receivable on PGM concentrate sales
(ii) Reflects PGM concentrate inventory
(iii) Represents fixed assets within the Group
(iv) Reflects group's mining assets at Kroondal, Marikana, Mimosa, and Everest
(v) Includes recoverable portion of rehabilitation provision from P&SA ($11 million), other financial assets ($4.4 million)
(vi) Reflects goodwill paid on acquisition of 50% equity interest in Platinum Mile Resources (Pty) Ltd.
(vii) Increase from pcp Includes debt facility of $200 million, trade and other creditors ($66 million)
(viii) Reflects P&SA Partners right of recovery of rehabilitation provisions. Decreasein non-current payables from pcp reflects repayment of shareholder loans sinceJune 2007 of $54 million
(ix) Includes interest bearing debt ($1.2 million), other borrowings $0.5million
(x) Reflects deferred tax liabilities $92 million, provision for closure costs $59 million
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 67.5%)
P&SA1 at Kroondal
Safety
The 12-month rolling average DIIR for the year improved to 0.48 from 0.75 in the previous year.
ProductionUnderground production increased 1% year-on-year to 6,207,000 tons and open-pitproduction decreased in line with plan by 67% to 165,000 tons, resulting in atotal 4% decrease in tons to 6,371,000 tons. The average head grade over theyear was lower at 2.61 g/t, primarily due to the contribution of lower gradeore associated with the development of the new K5 decline. Recoveries wereflat at 77%. Total PGM production for the year decreased 11% to 391,117 PGMounces (Aquarius attributable: 195,558 ounces).
Kroondal: Metal in concentrate produced (PGM ounces)
Year Ended Pt Pd Rh Au PGMs (4E) PGMs (4E)
attributable Aquarius 2008 234,041 113,400 41,852 1,823 391,117 195,558 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%)
RevenueThe average PGM basket price for the year increased 36% to $1,887 per PGMounce. The basket price rose steadily during the year, averaging $2,350 perPGM ounce in the final quarter. This compensated for a reduction in productionand resulted in a 31% increase in mine revenue to R5.2 billion for the year(Aquarius share: R2.6 billion). The cash margin for the year rose to 68% from66%.Operating Costs
Cash cost per ROM ton increased by 28% to R273 per ton. Consequently, cash costs per PGM ounce, impacted by lower grades and fewer ounces, increased 38% to R4,241.
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 2008 4,241 3,487 3,334
P&SA2 at Marikana Platinum Mine
Safety
The 12-month rolling average DIIR for the year deteriorated to 0.54 from 0.36 in the previous year.
ProductionUnderground operations continued to ramp-up during the year with productionincreasing 54% more tons to 1,096,000 tons. In line with plan, open pittonnages were reduced, with production at 976,000 tons. The ratio ofproduction over the year continued to shift favourably towards undergroundmaterial which represented approximately 53% of the total production mix. Theaverage head grade reduced to 2.89 g/t compared to 3.19 g/t in the previousyear, primarily due to the processing of lower grade stockpile material in thefinal quarter. Recoveries were flat at 63%. Despite the increasedcontribution of higher recovery underground material during the year, theoverall mix was offset by the processing in the final quarter of thelower-grade lower-recovery stockpile material. Total PGM production fell 5%year-on-year to 125,583 PGM ounces (Aquarius attributable: 62,791 PGM ounces).
Marikana: Metal in concentrate produced (PGM ounces)
Year Ended Pt Pd Rh Au PGMs (4E) PGMs (4E)
attributable Aquarius 2008 78,786 33,916 12,073 808 125,583 62,791 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 36% to $1,822 per PGMounce. Over the year, however, the PGM basket rose steadily, averaging $2,311per PGM ounce in the final quarter. This resulted in a 34% increase in minerevenue to R1.6 billion for the year (Aquarius share: R819 million). The cashmargin for the year fell to 42%, compared to 44% in 2007.
Operating Costs
Cash cost per ROM ton increased by 31% to R446 due to higher mining costs andlost production days due to industrial relations issues. Consequently, cashcosts per PGM ounce, impacted by lower grades and recoveries, increased 45%
toR7,575.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 2008 7,575 6,273 6,025 Everest Platinum MineSafety
The 12-month rolling average DIIR for the year deteriorated to 0.89 from 0.62 in the previous year.
ProductionUnderground production increased 6% to 1,906,000 tons for the year, compared to1,805,000 tons in the previous year. Open pit operations, in-line with plan,reduced production, to 216,000 tons for the year compared to 589,000 tons inthe previous year. Total production was, therefore, 2,122,000 tons, an 11%decrease compared to the previous year. The average head grade increasedmarginally for the year to 2.98 g/t from 2.89 g/t due to the increasedcontribution from underground operations in the overall production mix. Recoveries increased by 5% to 78% due to higher quality underground tonsdominating the feed. It is expected that recoveries will increase to 79% inthe 2009 financial year as underground production becomes the only feedmaterial for processing. Total PGM production fell 4% to 157,995 PGM ounces(100% attributable to Aquarius) due to the contractor departure and move tomine operator.
Everest: Metal in concentrate produced (PGM ounces)
Year Ended Pt Pd Rh Au PGMs (4E) PGMs (4E)
attributable Aquarius 2008 94,428 46,034 16,255 1,278 157,995 157,995 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 RevenueThe average PGM basket price for the financial year was up 40% to $1,805 perPGM ounce. Despite lower production, this resulted in a 47% increase in minerevenue to R2.2 billion (Aquarius share: 100%). The cash margin for the yearincreased to 70% from 62% in the previous year.
Operating Costs
Cash costs per ROM ton increased 33% to R308 per ton as a result of theincreased ratio of higher cost underground tons and lower production due toindustrial relations issues and the shift to owner-operator mining. Cash costsper PGM ounce increased 22% to R4,126 per PGM ounce, with the increase in ROMton cash costs partially offset by increased recoveries.
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 2008 4,126 3,352 3,159
MIMOSA INVESTMENTS (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The DIIR for the year improved to 0.18 from 0.41 in the previous year.
Production
Underground operations delivered a 2% increase in production to 1,887,000 PGMounces. Tons processed increased 2% to 1,732,000 tons, with the balance goingto the stockpile which totalled 498,000 tons at the end of the financial year,equal to 99-days mill feed. The average head grade increased 2% to 3.57 g/t. Recoveries decreased marginally to 76%. PGM production for the year decreased2% to 150,832 ounces (Aquarius attributable: 75,416 ounces) due to millbreakdowns in November 2007 and June 2008.
Mimosa: Metal in concentrate produced (PGM ounces)
Year Ended Pt Pd Rh Au PGMs (4E) PGMs (4E)
attributable Aquarius 2008 75,565 77,771 5,996 10,148 150,832 75,416 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 29% higher at $1,258 per PGM ounce. Despite lower production, this resulted in a 19% increase in mine revenue to US$237 million (Aquarius share: 50%). The cash margin for the year was steady at 73%.
Operating CostsCash costs per ounce for the year increased 17% to $446 per PGM ounce due tothe impact of the hyper-inflationary environment. After by-product creditscash costs were higher, though remained negative at -$63 per PGM ounce. Thisreduction was due to the weaker nickel and copper prices throughout the year.
Mimosa: Operating Costs
US$ (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 2008 446 423 -49 Wedza Phase 5 Expansion
The Wedza Phase 5 Expansion Project was commissioned during the year.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD (Aquarius Platinum 50%)
Chromite Tailings Retreatment Plant (CTRP)
Safety
The Plant recorded a DIIR of 5.62 for the year, following the first injury since operations began.
Production
Tons processed increased by 51% to 274,000 tons. The average head grade wassteady at 4.2 g/t for the year compared to 4.32 g/t in the previous year. Recoveries fell by 4% to 27% during the year. Total PGM production, however,recorded a strong 33% increase to 9,849 PGM ounces.
CTRP: Metal in concentrate produced (PGM ounces)
Year Ended Pt Pd Rh Au PGMs (4E) PGMs (4E) attributable to Aquarius 2008 6,114 2,201 1,513 22 9,849 4,924 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 average PGM basket price for the year was 31% higher at $2,224 per PGMounce. Reflecting increased production and basket prices, revenue more thandoubled to R155 million (Aquarius attributable R77.5 million). The cash marginfor the year increased to 83% from 77%.
CTRP: Operating Costs
Cash costs per ounce for the year increased 12% to R2,666 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 2008 2,666 1,742 1,651
Platinum Mile (Aquarius Platinum 50%)
The effective date of the acquisition of the 50% interest in Platinum Mile was1 March 2008. Comments below concern the four month period from 1 March to
30June 2008. Period on period comparisons are therefore not available.Safety
The DIIR was zero for the quarter. No lost time accidents were recorded.
Production
For the four months, March to June 2008, the operation processed 3,153,000 tons. The average head grade for the period was 0.73 g/t.. Recoveries for the period were 10%. Total PGM production, for the period was 7,042 PGM ounces (Aquarius attributable: 3,520 ounces)
Platinum Mile: Metal in concentrate produced (PGM ounces)
Year Ended Pt Pd Rh Au PGMs (4E) PGMs (4E) attributable Aquarius
2008 6,114 2,201 1,513 22 7,042 3,520 RevenueThe average PGM basket price for the period was $2,068 per PGM ounce. Revenuefor the period was R101 million (Aquarius attributable R50.5 million). Due tothe lower grades and recoveries than the CTRP, the cash margin for the periodwas 46%.
Platinum Mile: Operating Costs
The average cash cost per ounce for the period was R7,890 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 2008 7,890 Nm Nm CORPORATEGeneral 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 Implats 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 transaction was funded through a combination of an accelerated book build,cash and debt. The completed bookbuild resulted in the issuance of 23,144,000new common shares of $0.05 each in Aquarius Platinum, at a price of ‚£8.00 penceper placing share, raising gross proceeds of approximately $366 million (‚£185million). The balance of the transaction was funded through cash and debt.
Acquisition of 50% Interest in Platinum Mile Resources (Pty) Ltd
On 4 June 2008, Aquarius Platinum announced that it had completed the acquisition of a 50% interest in Platinum Mile Resources (Pty) Ltd, from a consortium of private investors and Mvelaphanda Holdings (Pty) Ltd.
Platinum Mile operates a tailings re-treatment facility which is located inRustenburg, North West Province. It is situated within RPM's Lease Area,adjacent to Kroondal. The plant processes certain RPM mine tailings. Theconcentrates produced by Platinum Mile are combined and sold to RPM and RPMenjoys a profit share arrangement with Platinum Mile. The Platinum Mile plantcurrently produces approximately 20,000 ounces of PGM (4E) per annum andproduction ramp-up plans and technological innovations should see theproduction from the operation increase to above 35,000 ounces of PGM (4E) perannum. It is the strategic intent of the parties to grow the business and theparties will explore current in-house opportunities as well the acquisition ofsimilar operations within the industry.The consideration payable to the shareholders of Platinum Mile for 50% of theissued share capital amounted to R420 million: comprising R210 million in cashand R210 million in Aquarius Platinum shares issued on the South Africanregister, at a fixed price of R78.33 ( ¢â€°Ë† January 2008 VWAP).
AQPSA and ACS(SA) Appointments
Aquarius is pleased to announce three appointments at AQPSA and one at ASACS.
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 Group HumanResources & Transformation Manager. Mr Duka joins from Petro SA where he wasthe Group 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
100% of Kroondal P&SA1 Marikana P&SA2 Everest Mimosa CTRP Platinum Operations Mile Statistical Information 12 12 12 12 Unit 12 mths 12 mths 12 mths 12 mths 12 mths 12 mths 12
mths 12 mths mths mths mths mths
Jun 08 Jun 07 Jun 08 Jun 07 Jun 08 Jun 07 Jun 08 Jun 07 Jun 08 Jun 07 Jun Jun 08 07 Safety Rate/ DIIR 200,000 0.49 0.75 0.54 0.36 0.89 0.62 0.18 0.41 5.62 0 0 - man hrs Revenue Gross R m in SA revenue / $m in 5,248 4,016 1,638 1,224 2,153 1,468 236.0 199 155 77 101 - Zim PGM basket $/oz 1,887 1,386 1,822 1,344 1,805 1,286 1,258 974 2,224 1,704 2,068 - Price Gross cash % 68 66 42 44 70 62 73 74 83 77 46 - margin Nickel $/lb 12.71 17.20 12.71 17.20 12.93 17.20 14.35 14.52 12.71 17.20 9.46 - Price Copper $/lb 3.50 3.21 3.50 3.21 3.53 3.21 3.46 3.22 3.50 3.21 3.47 - Price Ave R/$ 7.23 7.18 7.23 7.18 7.23 7.18 - - 7.23 7.18 7.80 - rate Cash Costs on-mine R/ton 271 213 446 341 308 232 - - 96 97 18 - Per ROM ton $/ton 38 30 62 47 43 32 39 35 13 13 2 - Per PGM R/oz 4,241 3,069 7,575 5,219 4,126 3,373 - - 2,666 2,377 7,890 - (3E+Au) $/oz 587 427 1,048 727 571 470 446 383 369 331 1,012 - Per PGE R/oz 3,487 2,526 6,273 4,317 3,352 2,821 - - 1,742 1,587 nm - (5E+Au) $/oz 482 352 868 601 464 393 423 362 241 221 nm - Capex Current/ R'000s 347,308 250,074 99,213 128,048 80,927 107,489 - - 5,617 - 221 - Sustaining 100% $'000s 48,045 34,821 13,725 17,830 11,132 14,967 11,723 8,293 777 - 28 - Expansion R'000s - - 10,965 72,855 - 25,441 - - - - 4,568 - 100% $'000s - - 1,517 10,144 - 3,542 20,802 5,665 - - 259 - Mining Processed Underground ROM ton 6,207 6,129 1,096 708 1,912 1,802 1,732 1,692 - - - - '000s Open Pit ROM ton 165 495 976 1,409 202 585 - - - - - - '000s Total ROM ton 6,371 6,624 2,072 2,118 2,114 2,387 1,732 1,692 274 182 3,153 - '000s Grade Plant Head g/t PGM 2.61 2.81 2.89 3.19 2.98 2.89 3.57
3.66 4.20 4.32 0.73 - Recoveries % 77 77 64 64 78 74 76 78 27 31 10 - PGM Production
Platinum Ozs 234,031 263,930 78,786 80,903 94,428 94,398 76,565 77,771 6,114 4,512 4,047 -
Palladium Ozs 113,400 127,048 33,916 37,719 46,034 52,527 58,154 59,216 2,201 1,629 2,197 -
Rhodium Ozs 41,852 46,097 12,073 12,750 16,255 15,534 5,966 6,030 1,513 1,252 661 -
Gold Ozs 1,823 2,275 808 1,003 1,278 1,478 10,148 10,553 22 15 135 - Total PGM Ozs 391,117 439,350 125,583 132,375 157,995 163,937 150,832 153,570 9,849 7,408 7,040 - (3E+Au) Total PGE Ozs 16,270 533,859 151,636 160,048 194,476 196,030 158,948 162,386 15,068 11,101 8,192 - (5E+Au) Base Metals Production Nickel Tons 386 436 193 220 195 224 2,086 2,078 12 12 29 - Copper Tons 178 190 105 119 95 111 1,719 1,732 9 10 12 - Chromite Tons '000s 343 353 95 140 - - - - - - (000) 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 DixEdward HaslamNicholas Sibley
Remuneration/Succession Planning Committee
Edward Haslam (Chairman)Nicholas Sibley Nomination Committee
The full Board comprises the Nomination Committee
Company SecretaryWilli Boehm AQPSA ManagementStuart Murray Executive Chairman Anton Wheeler Managing Director HĩlĬne Nolte Director: Finance Hulme Scholes Director: Legal Willie Byleveld General Manager: Technical Services
Graham Ferreira General Manager: Group Admin & Company Secretary
Hugo HĦll General Manager: Projects Mkhululi Duka Group Human Resources & Transformation Manager 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
(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] Glossary
A$ Australian Dollar Aquarius Aquarius Platinum Limited
ABET Adult Basic Education Training programme APS Aquarius Platinum Corporate Services Pty Ltd AQPSA Aquarius Platinum (South Africa) Pty Ltd
ACS(SA) Aquarius Platinum (SA) (Corporate Services) (Pty) Limited BEE Black Economic Empowerment 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)
Implats Impala Platinum Holdings Limited 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 nm Not measured NOSA National Occupational Safety Association NUM South African National Union of Mineworkers pcp Previous corresponding period 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 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:Anne Cully+61 (0)8 9367 5211
In the United Kingdom and South Africa
Nick Bias+ 44 (0)7887 920 [email protected]
vendorRelated Shares:
AQP.L