8th Feb 2005 08:49
AQUARIUS PLATINUM LIMITED8 February 2005HALF YEARLY RESULTS: 31 DECEMBER 2004Net profit of $6 million andinterim dividend declared at 3 US cents per shareHighlights of the half year:OperationalMine production improved 7.5% to 245,716 PGM ounces (Aquarius attributableproduction declined to 145,714 PGM ounces due to the impact of the P&SA)Kroondal Mine record production at 139,009 PGM ounces (Aquarius attributable69,504 PGM ounces)Kroondal P&SA makes substantial progress and ahead of scheduleMarikana Mine performance inhibited by excessive overburden removal, oxidisedzones in orebody and poor reefing performance by mining contractor. Productiondeclined to 45,713 PGM ouncesMimosa Mine maintains consistent production levels at 60,994 PGM ounces(Aquarius attributable 30,497 PGM ounces)FinancialRevenues increased 1% to $98.8 million, despite lower attributable productionbut offset by 20% increase in PGM basket price and includes $4.1 million ondisposal of 2% of AQPSA (Note : The impact of the P&SA makes previouscorresponding period comparisons difficult)Working costs rose in both South Africa and Zimbabwe due to inflation andappreciating currencies impact on $ reportingNet profit after tax "cash basis" at $17.2 millionAccounting profit (to IAS) at $6.0 million (7.25 cents per share) afteramortisation and depreciation of $11.2 millionProfit from operations was $2.9 million and profit on sale of 2% of AQPSAequity to Impala Platinum Holdings Ltd was $3.1 million (pursuant to BEEtransaction)Consolidated cash balances at $137 million. Cash/debt offset agreement enteredinto with Investec/ABSA, with outstanding Investec / ABSA debt balance reducedby R250 million to R112 million, term debt facility remains intactInterim dividend declared at a maintained 3 US cents per shareStrategicBEE entry into AQPSA completed, R860 million subscription paid during October2004Mine licence conversions in South Africa lodged with Department of Minerals andEnergyAquarius first foreign company to secondary list on JSE under new foreignexchange control dispensationProjectsPooling and Sharing AgreementHot commissioning to start in March 2005, with first production in May, aheadof scheduleUnderground tonnage build-up progressing ahead of planA 600,000 ton ore stockpile anticipated to be built up ahead of newconcentrator start-upConstruction of 4th decline shaft commenced in January 2005Chromite Tailings Retreatment ProjectConstruction completed in December with first concentrate shipped in January2005Low cost innovative new ounces, while furthering sound environmental practicesEverestProject commenced construction during October 2004 with anticipatedcommissioning in December 2005Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said, "Thefirst six months of the financial year are characterised by the success of theKroondal operation, ongoing achievement at Mimosa, and a disappointingperformance at Marikana. Kroondal has lifted to a new level and the P&SA ispoised to deliver 3 months early. Mimosa has become a proven performer despitethe economic challenges faced by its management in Zimbabwe. The uncertaintycreated by the foreign currency initiatives in Zimbabwe did damage sentimenttowards the company but mine management continues to engage the Zimbabweanauthorities and I am sure a satisfactory outcome will prevail in respect offoreign currency management.Undoubtedly, the highlight for the period has been the successful execution ofthe BEE transaction with the Savannah Consortium. The transaction is proof thatgreat BEE deals can be done without damaging shareholder interests. The cashraised is being put to good use to build the Everest Mine, which startedconstruction in October. Everest is, however, only one of our projects. The P&SA at Kroondal is progressing very well with mine and plant some three monthsahead of schedule and hot commissioning anticipated in March 2005. The ChromiteOre Tailings Retreatment operation completed construction in December anddelivered its first concentrate in January 2005.While our production profile is entering a new phase and offers excellentgrowth from a broader range of assets, the new projects also demonstrate ourinnovative approach to common-sense deal making. It is in this manner, with ourBEE partners, that we will continue to look for opportunities to grow Aquariuseven further".Financial results 31 December 2004Aquarius announces consolidated earnings for the half year to 31 December 2004of $6.0 million (7.25 cents per share). Comparisons with the previouscorresponding period 2003 are not meaningful due to the impact of the P&SA.Profit on a "cash basis" was $17.2 million.The Directors have declared an interim dividend of 3 cents per share (2003: 3cents per share) payable on 23 March 2005 to shareholders registered on 2 March2005.Revenue (PGM sales, interest, plus asset disposal) for the half year toDecember 2004, was up 1% to $98.8 million.Depreciation increased from $6.5 million to $8.6 million. This increase is dueto capital expenditure on the respective development and expansions atKroondal, Marikana and Mimosa plus accelerated write off of the life of mine ofthe Marikana open pit. Amortisation arising from the fair value uplift remainedconstant at $2.6 million. Net finance charges for the period were $2.8 million,comprising $3.4 million in interest income and $6.2 million interest expense.Net profit for the period of $6 million, included a profit from operations of$2.9 million and profit of $3.1 million on the sale of 2% of AQPSA equityfollowing the BEE transaction to Impala Platinum Holdings Limited.The Group's operating mines (with the exception of Marikana which operated at aloss) performed well during the period under difficult economic conditionswhich saw the Rand strengthening further against the $. The Mimosa result wasimpacted by an exchange rate mechanism introduced by the Reserve Bank ofZimbabwe that did not reflect the hyper-inflationary conditions in the country.This caused operating costs to be affected adversely. Although operatingconditions in Zimbabwe remain challenging, the company continues to operatesuccessfully. In December 2004, the government of Zimbabwe announced a welcomedreduction in the company tax rate to 15% from 20%.Cash costs at Kroondal for the half year were R2,323 per PGM ounce. These costsinclude additional costs that were attributable to the development of the P&SA.On an adjusted basis (after allowing for the change in amortisation policyannounced a year ago, and P&SA developments costs) cash costs for the half yearended December 2004 were R1,819 per PGM ounce, a credible 5% increase comparedto the 6 months ended December 2003.The table below outlines reconciles these costs. 6 months 6 months Variance Dec 2004 Dec 2003 Cash costs R2,323 R1,727 (R596) Impact of change in amortisation policy (R197) - R197 P&SA decline development (R267) - R267 Grade dilution due to decline (R40) - (R40) development Cash costs after adjustments R1,819 R1,727 (R92) Construction of the new 250,000 tons per month P&SA concentrator is on scheduleto hot commission by March 2005. On completion of the new concentrator,Kroondal will produce approximately 505,000 PGM ounces per annum, of whichAquarius' share will be 50%.Marikana has underperformed during the half year and was impacted by theincidence of internal waste diluting the head grade, the impact of moreoxidised ore on recoveries and a greater overburden strip than anticipated.Poor contractor performance on extracting the reef tons attributable to theoverburden stripped has been a significant issue. Consequently, grades andrecoveries were adversely affected contributing to the lower than expected PGMounces produced during the half year of 45,713 PGM ounces and high cash costsPGM ounce of R4,699. The result is disappointing and has eroded what was apositive contribution from our other operations. An encouraging yet modest cashbreak-even in December 2004 shows signs of a sustainable improvement atMarikana, and a cash profit is envisaged to continue for the rest of thefinancial year at current Rand: $ exchange rates and metal prices.ProductionTotal mine production increased 7.5% to 245,716 PGM ounces. Attributable groupproduction for the half year was 145,714 PGM ounces. It is forecast that theproduction profile will continue to increase, though at a higher rate, as newproduction from the Kroondal P&SA, the Chromite Tailings Retreatment operation,and improvements at the Marikana impact total production in the coming months.Aquarius Group PGM ProductionHalf Yearly Production PGM OuncesIncIuding the impact of the P&SA, the production for this half year was 16,881PGM ounces ahead (245,716 PGM ounces to December 2004 compared to 228,835 PGMounces to December 2003).Production by Mine and Production by Mine attributable to AquariusPGMs (4E) Production By Mine Production attributable to Aquarius Half Year ended Half Year ended Half Year ended Half Year ended Dec 2004 Dec 2003 Dec 2004 Dec 2003 Kroondal 139,009 117,764 69,504 100,200 Marikana 45,713 49,109 45,713 49,109 Mimosa 60,994 61,962 30,497 30,981 Total 245,716 228,835 145,714 180,290 Foreign ExchangeThe Rand appreciated 10% against the US Dollar over the 6 months to December2004 ending at R5.62 per $. Encouragingly the exchange rate has marginallydepreciated into 2005 with renewed dollar strength, concurrent with a continuedstrengthening of the PGM basket price.Platinum Group Metal PricesThe prices for our commodities showed healthy gains over the period, withaverage PGM basket price (platinum, palladium, rhodium and gold) increasing 20%to $651 per PGM ounce compared to the half year to December 2003. The PGMbasket price has continued to strengthen further, as strong underlying demandfor platinum in both autocatalysts and jewellery suggests that the supplydeficit will continue as new operations fail to come on stream under a strongRand Dollar environment. PGMs unlike gold are influenced less by the $, andbehave more inline with underlying demand for which the outlook continues to berobust.At Mimosa operation, where palladium is a more significant component of thebasket, the basket price averaged $580 per PGM ounce, a 16% increase over thehalf year to December 2003. The mine continued to benefit from increasingby-product credit prices for nickel, copper and cobalt.FinancialsAquarius Platinum Limited Consolidated Income Statement For the Half Year ended 31 December 2004 $'000 Audit reviewed Half Year Ended Year Ended 31/12/04 31/12/03 30/6/04 Note: Revenue (i) 98,762 97,518 194,850 Foreign exchange loss on sales (ii) (1,694) (7,430) (2,975) Cost of sales (iii) (83,088) (62,816) (125,420) Gross profit 13,980 27,272 66,455 Amortisation of fair value uplift (iv) (2,599) (2,703) (4,951) of mineral properties Gross profit after amortisation of 11,381 24,569 61,504 fair value uplift Admin & operating costs (v) (3,389) (3,410) (8,619) Finance costs (vi) (6,185) (4,847) (10,661) Foreign exchange gains/(losses) (vii) 2,395 3,250 (3,094) Profit before tax 4,202 19,562 39,130 Income tax expense (viii) 1,113 (3,811) (5,674) Profit after tax 5,315 15,751 33,456 Minority interest (ix) 687 (1,271) (4,752) Net profit 6,002 14,480 28,704 Earnings per share (basic - cents) 7.25 17.9 35.08 Notes on the Consolidated Income StatementSales revenue in line with previous period, despite lower attributableproduction, offset by 20% increase in PGM basket price and includes $4.1million on disposal of 2% of AQPSAReflects effects of adjusting revenue recorded at time of production atKroondal and Marikana to cash received at the end of the four month pipelineCost of sales are higher due to appreciating Rand, up 13% compared to theprevious corresponding period, December 2003, and increased costs incurred atthe Marikana mine and a static Zimbabwe dollar - despite hyper inflationaryconditions in ZimbabweRelates to amortisation of purchased goodwill associated with the Kroondal,Marikana and Mimosa minesRelates to administration costs of the Aquarius GroupFinance costs were higher due to short term loans to fund Mimosa's workingcapitalReflects foreign exchange movements on net monetary assetsIncome tax expense for the period includes tax credit attributable to reductionin tax rate in Zimbabwe from 20% to 15%Minority interests reflect 49.5% outside equity interest of Impala PlatinumHoldings Limited (Implats) and the Savannah Consortium (SavCon) in AQPSAAquarius Platinum Limited Consolidated Cash Flow Statement Half year ended 31 December 2004 $'000 Audit Reviewed Half year ended Year ended 31/12/04 31/12/03 30/06/04 Note: Net operating cash inflow (i) 9,878 31,827 54,365 Net investing cash outflow (ii) (36,847) (10,761) (10,380) Net financing cash outflow (iii) 76,445 16,814 15,786 Net increase in cash held 49,476 37,880 59,771 Opening cash balance 77,942 16,996 16,996 Exchange rate movement on (iv) 9,132 182 1,175 cash Closing cash balance 136,550 55,058 77,942 Notes on the December '04 Consolidated Cash Flow StatementNet operating cash flow includes $77.4 million inflow from operations and $2.2million net finance costsReflects payments for mine development and development costs $40.8 million lessnet proceeds on sale of investment to SavCon of $4.0 millionReflects proceeds from issue of shares by AQPSA $33.52 million, proceeds fromSavCon shareholder loan 97.4 million, debt offset of Investec/ABSA facility of$53.2 million, proceeds from repayment of share plan loans $1.1 million andpayment of dividends of $2.5 millionReflects impact of a strengthening Rand against the US dollar for the periodAquarius Platinum LimitedConsolidated Balance SheetAt 31 December 2004 $'000Audit Reviewed Half year ended Year ended Note: 31/12/04 31/12/03 30/06/04 Assets Cash assets 136,746 55,058 77,942 Current receivables (i) 34,162 29,765 23,262 Other current assets (ii) 20,192 10,371 10,736 Non-current receivables (iii) 3,728 4,691 4,627 Mining assets (iv) 409,619 327,267 356,641 Other non-current assets 512 21 18 Total assets 604,959 427,173 473,226 Liabilities Current liabilities (v) 58,821 37,650 41,766 Non-current payables (vi) 176,697 56,224 59,600 Non-current interest-bearing (vii) 18,519 63,859 62,716 liabilities Other non-current (viii) 82,584 55,623 74,947 liabilities Total Liabilities 336,621 213,356 239,029 Net assets/(liabilities) 268,338 213,817 234,197 Equity Parent entity interest 233,907 208,494 224,975 Minority interest 34,431 5,323 9,222 Total Equity 268,338 213,817 234,197 Notes on the December 04 Consolidated Balance SheetIncrease relates to net movement in trade debtors and pipeline finance.Relates to ore stockpiles, consumables and PGM concentrate inventory, increaserelated to ore stockpile build-up prior to commissioning of new PSA plant.Reduction reflects Aquarius share plan loans repaidIncrease in mining assets relates to costs of new Kroondal PSA plant,development costs of Everest and foreign exchanges variances on Rand miningassetsIncludes current portion of Investec loan ($20.4 million), tax payable ($9.2million) and creditors ($29.2 million). Balances include impact of the R250million debt offset against the Investec/ABSA facility.Includes deferred sale amount on BEE transaction ($11.5 million) and long-termnon-interest bearing shareholder debt in AQPSA owing to SavCon ($73.9 million)and Impala (91.3 million)Relates long term interest bearing shareholder loans in AQPSA of $18.0 millionand other loans of $0.5 million.Reflects deferred tax liabilities $57.5 million, provision for closure costs$25.1 millionOn Mine Financial Performance Kroondal Marikana Mimosa 50% PGM ounces (attributable) 69,504 45,713 30,497 Revenue (net of FX variance on 40,860 25,907 22,705 sales) Cash costs (25,466) (32,754) (10,765) Gross margin 15,394 (6,847) 11,940 Administration (1,503) (1,622) (2,359) Foreign currency gain/(loss) (233) (445) 898 EBITDA 13,658 (8,914) 10,479 Amortisation (3,644) (6,435) (1,092) Finance charges 278 (2,417) (2,328) Profit/(loss) before tax 10,292 (17,766) 7,059 Tax Expense (1,355) 2,766 (297) Profit/(loss) before tax 8,937 (15,000) 6,762 OperationsKroondal Platinum MineSafetyThe DIIR recorded a good improvement to 0.66 for the half year. Regrettably afatal accident occurred at the mine on 20 November 2004 when a LHD operatorsustained an injury to the head. The circumstances leading up to the accidentare unclear and the matter is under investigation by inspectors of theDepartment of Minerals and Energy.Processing1,595,000 ROM tons hoisted from underground with a further 151,000 tons ofopencast139,009 PGM ounces produced (Aquarius attributable 69,504 PGM ounces)Closing surface stockpile at quarter end (ahead of the Christmas and New Yearholidays) at 503,000 tonsOperationsPGM production improved by 18% to 139,009 PGM ounces for the half year toDecember 2004.The PGM basket price increased to $686 per PGM ounce, with this improvement in$ price offset by a strengthening of the Rand : $ average exchange rate.The increased face length derived as a result of being able to develop down dipas part of the PSA project has had a marked positive effect on production.1,746,000 ROM tons were processed at a slightly lower head grade of 3.09 g/t.This achievement was commendable as the plant did not operate for a period inorder to undertake a rod mill reline and a replacement of a failed ball millbearing. Concentrator plant recoveries also improved to a record 80.35% in theDecember month.Cash costs at Kroondal for the half year were R2,323 per PGM ounce. These costsinclude additional costs that were attributable to the development of the P&SA,On an adjusted basis (after allowing for the change in amortisation policyannounced a year ago, and P&SA developments costs) cash costs for the half yearended December 2004 were R1,819 per PGM ounce, a credible 5% increase comparedto the 6 months ended December 2003.P&SA development at KroondalThe P&SA expansion program is set to commission in the coming quarter. Atsteady state production, the new concentrator is targeted to produce 250,000PGM ounces per annum, effectively doubling the Kroondal Mine's annual output to505,000 PGM ounces per annum. Expansion of the underground mine at the Central,East and No 3 shafts progressed well through the period. A total of 1,020meters of down-dip development has now been completed. The underground mine iscurrently producing over 350,000 tons per month which places the build-upapproximately 5 months ahead of project plan.Cold commissioning of the new concentrator will start in January 2005 with hotcommissioning planned from March 2005, 3 months ahead of schedule. A stockpileof over 600,000 tons is anticipated to be available for plant commissioning.First ounces from the new plant are expected during the final quarter (April toJune 2005) of this financial year.The P&SA project's capital expenditure commitments to 31 December 2004 wereR548 million with capital expenditure paid to date of R405 million. AQPSA'sshare of these commitments and expenditure is 50% of these amounts.Marikana Platinum MineSafetyThe DIIR for the half year was 0.75 for the period, ensuring that the mineretained the coveted NOSA 4 Star Platinum status.MiningImproved stripping ratio during the quarter has had a positive impact on costsSecond contractor introduced to supplement shortfall in contribution fromMoolman BrosProcessing764,000 tons processed during the periodConcentrator plant recoveries at 50%45,713 PGM ounces producedOperationsPGM production improved towards the end of the half year, despite fewer tonsbeing processed. The improvements in the second quarter are the result ofimproved recoveries as deeper more competent ore was accessed in certain partsof the pit. Reflecting the access to competent ore, plant recoveries for theperiod were 50%.As a result of a lower stripping ratio and higher recovery levels cash costsper PGM ounce also improved towards the end of the period, with the quarter toDecember 2004 reporting a reduction of 18% to R4,248 compared to the previousquarter. This improvement is encouraging and has resulted in the mine breakingeven in cash terms for the month of December. Further efficiencies will beachieved through the continuing implementation of the revised mining plan,whereby reduced tonnage at an improved head grade is anticipated in the finalhalf of the financial year.The Marikana PGM basket price increased marginally to $688 per PGM ounce.OutlookWhile Aquarius is implementing the revised mining plan, discussions are beingheld with owners of adjacent mineral rights with a view to cooperation "acrossfarm boundaries".Trial underground mining will commence in the current quarter. It is expectedthat underground mining will lead to a reduction in unit cash costs and createmore flexibility for the exploitation of the ore body.Contractor dispute with Moolman BrothersThe arbitration date for the dispute relating to the Rise and Fall (foreigncurrency denominated) component of the mining contract has been set for April2005.Mimosa Mine (Aquarius 50%)SafetyThe mine recorded a significant improvement in safety performance. During thehalf year the DIFR was 0.4. The financial year to date DIFR stands at 0.40 andthe rolling 12 months DIFR at 0.49.OperationsMining operating days were reduced by six in December as the monthly reportingdate was brought forward from 28 to 22 December to accord with AQPSA. Inaddition, three operating days were lost to illegal industrial action called bythe trade union organisation. Despite the loss of nine days, PGM production forthe 6 months was stable at 60,994 PGM ounces, similar to the previouscorresponding half year, December 2003, production of 61,962 PGM ounces,reflecting an improvement in productivity. Mining operations hoisted a total of656,000 ROM tons.The Mimosa PGM basket price reported a steady increase to $588 per PGM ounce,aided by buoyant base metals prices.The Government of Zimbabwe announced a reduction in the rate of company tax formining companies from 20% to 15% backdated to January 2004. This development ismost welcome.Operating CostsExchange rates achieved were at the Reserve Bank of Zimbabwe (RBZ) auctionfloor rates which averaged Z$5,900 per $. This level of exchange rate has notcompensated for the inflation rate impact on operating costs at mine level.Consequently unit cash costs per PGM ounce for the period increased to $319 (or$105 per PGM ounce after by-product credits). The 15% FOB incentive granted bythe RBZ was offset against operating costs as per normal practice.The expansion project was completed at a capital cost of $41 million.Industrial RelationsThree operating days were lost to illegal industrial action called by the tradeunion to obtain concessions during national wage negotiations conducted by theChamber of Mines. The combined effects of a harsh socio-economic environmentand an approaching parliamentary election will make managing the industrialrelations environment in current quarter somewhat difficult.PGM Sector ReformsThe Government of Zimbabwe, through the RBZ, has accorded the PGM sector aspecial status in order to stimulate growth of the Zimbabwe platinum industryand enhance Government's understanding of the sector. Mimosa management hasbeen encouraged by its discussions with the RBZ to achieve a "win-winsituation" with respect to the management of foreign currency flows. Asuccessful outcome of these discussions will lead to an evaluation of furthergrowth opportunities on the mine.Chromite Ore Tailings Retreatment Operation (ASACS 50%)SafetyNo accidents were reported during the period.Project DevelopmentConstruction of the plant was completed in December 2004. Cold commissioningcommenced during the first week in December and hot commissioning commenced17th December 2004. First concentrate was delivered to the smelter on 21stJanuary 2005.Everest ProjectProgressConstruction of Everest started in October 2004, following the receipt of fundsfrom the BEE transaction. The capital budget is R819 million including a R33million allowance for escalation. Everest will mine and process 3 million tonsper annum of UG2 ore to produce 225,000 ounces of PGMs per annum at steadystate. Commissioning is anticipated in December 2005, with full production tobe attained in 2006. Everest , with a UG2 reserve of 26.79 million tonnes at3.36 g/t (4E) containing 2.8 million ounces of PGMs, is the company's thirdmining operation in South Africa.Dowding Reynard and Associates (DRA), who managed the construction of theKroondal, Marikana, and P&SA concentrators, have been appointed to execute theEverest project. Preparatory engineering work undertaken throughout 2004 hasallowed the project to be rapidly mobilised, with earthworks starting withinthe week following funds receipt. Construction activities during the periodfocused on the process plant platform, excavation of the portal for theunderground mining decline and general infrastructure. Engineering, design andprocurement activities are proceeding in parallel and project execution is ontrack for hot commissioning during December 2005.Both opencast and underground mining contractors were appointed during theperiod. The opencast mining contractor, MCC, will start mining activitiesduring the first quarter of 2005. Shaft Sinkers, the underground contractor,will start the development of the decline during the second quarter of 2005.AQPSA mining personnel from the Kroondal Mine were seconded to Everest toenable a transfer of knowledge and skills, and will be transferred to siteduring the next reporting period to manage the mining operations.The identification and implementation of Social Upliftment and SustainableLivelihood projects is ongoing. Contractor recruitment of local labour iscoordinated with the Department of Labour in Lydenburg, and has provedeffective with sixty local people employed during the period. The Adult BasicEducation and Training (ABET) facility, where community members attendtwice-weekly classes, is ongoing and a project to supply water to the localprimary school was initiated during the period. Projects which will beinitiated during the next period include a day care centre, the removal ofalien plants, a nutritional feeding scheme and a catering project.The transfer of land title to the local Phetla community under a settlementreached with the land restitution authorities continues. Under the terms of theagreement land required for the mine to operate will be leased back to AQPSA.CorporateBoard of directorsSubsequent to the half year end, Mr Zwelakhe Sisulu was appointed to the Boardof the Company on 4th February 2005. Mr Sisulu brings considerable experiencewith regard to the operating environment in Southern Africa.Black Economic Empowerment (BEE)The BEE transaction announced to shareholders on 26th July 2004 and approved byshareholders in Special General Meeting on 11th October 2004 was formallyconcluded with the receipt of R860 million in cash by the Aquarius Group on the29th October 2004.The transaction has two key components, the first of which is now completed.This saw the BEE consortium, led by Savannah Resources (Pty) Limited, subscribefor a 29.5% shareholding in the enlarged share capital of AQPSA. ConcurrentlyImpala Platinum Holdings Limited (Impala) acquired an additional holding inAQPSA from Aquarius to increase their shareholding to 20% in AQPSA followingthe dilution resulting from the issue of the new shares in AQPSA to the BEEconsortium. At this time, the shareholdings in AQPSA are as follows:50.5% interest by AQP;29.5% by the Savannah consortium; and20% held by Impala.The consideration paid by Impala amounted to R71.5 million, which was settledby the cession of R71.5 million of interest bearing loan account to Aquarius.At the time of the BEE transaction, AQPSA had an interest bearing loan of overR93 million (both principal and accumulated interest) to Impala. Followingcession of R71.5 million of the loan to Aquarius, AQPSA settled the outstandingbalance of the loan in cash.The final component of the transaction will in time and subject to theconditions detailed in the notice of meeting to shareholders of 17th September2004, see the Savannah consortium's 29.5% holding in AQPSA be exchanged for24,599,542 new Aquarius shares. Following this exchange, Aquarius will hold 80%of AQPSA and Savannah consortium constituent members will hold approximately23% of the enlarged share capital of Aquarius.JSE Securities Exchange South AfricaUnder revised exchange control regulations announced by South African FinanceMinister, the Honourable Trevor Manuel in February 2004, Aquarius became thefirst foreign company to list its shares on the JSE. Listing on 8 December2004, to fulfil the company's obligations to its empowerment partners, tradehas been light to date. Steps to improve liquidity are in progress.Cash balances and Interest bearing debt facilitiesAquarius Group consolidated cash balances at 31 December 2004 were $137million, after the reduction in debt at AQPSA by R250 million in terms of anoffset arrangement with Investec / ABSA.In December, AQPSA signed an agreement with Investec / ABSA to create aninnovative cash balance management offset mechanism in respect of its existingterm debt facility. AQPSA is permitted to deposit its cash (up to theoutstanding balance of the debt facility) in order to reduce its interestexpense for the period that the cash is on deposit with the banks. An amount ofR250 million has been placed on deposit with the banks, thereby reducing theInvestec/ABSA debt balance to R112 million. Funds will be re-advanced by thebanks, without limitation at AQPSA's request, up to the limits of the originalfacility. These funds are anticipated to remain on deposit until the end of thecalendar year.STATISTICAL INFORMATION: Kroondal Marikana Mimosa Unit 6 months 6 months 6 months 6 months 6 months 6 months December December December December December December 2004 2003 2004 2003 2004 2003 Safety DIIR Rate/ 0.66 1.52 0.75 0.69 0.40 0.45 200,000 man hours Revenue Millions 521 412 165 182 40 34 Gross revenue PGM basket $/oz 686 550 688 579 580 502 Price Gross cash 38 50 (30) 2 62 70 margin Nickel Price $/lb 6.37 4.94 6.36 4.94 6.11 5.31 Copper Price US‚¢/lb 1.35 0.86 1.35 0.86 1.08 0.80 Ave R/$ rate 6.23 7.05 6.23 7.05 - - Cash Costs Per ROM ton R/ton 185 133 281 230 - - $/ton 30 19 45 33 29 19 Per PGM ounce R/oz 2,323 1,727 4,699 3,631 - - $/oz 373 245 755 515 319 202 Per PGM ounce R/oz 2,231 1,654 4,588 3,582 - - after by-product credit $/oz 357 235 737 508 105 20 Capital expenditure Current 100% R `'000s 1,497 25,260 7,148 3,228 9,154 4,195 $ ' 000s 236 3,586 1,148 458 - - Expansion R `'000s 313,347 - - 15,826 6,56 3,212 100% $ ' 000s 50,593 - - 2,245 - - Mining Processed Underground ROM ton 1,595 1,379 - - 656 665 `'000 Open Pit ROM ton 151 152 764 774 - - ''000 Total ROM ton 1,746 1,531 764 774 656 665 ''000 Grade Plant Head g/t 3.09 3.14 3.75 3.77 3.66 3.75 Recoveries % 80% 75% 50% 52% 76.9 76.0 PGM Production Platinum Ozs 83,048 71,402 29,745 32,233 31,284 32,123 Palladium Ozs 40,286 33,637 12,253 13,029 23,076 23,174 Rhodium Ozs 15,008 12,198 3,309 3,421 2,408 2,568 Gold Ozs 667 527 406 426 4,226 4,097 Total Ozs 139,009 117,764 45,713 49,109 60.994 61,962 Base Metals Production Nickel Tons 130 98 49 50 891 883 Copper Tons 57 46 26 29 736 734 Chromite Tons 119 145 124 10 26 27 (000) (000) Data reflects 100% of operations.Aquarius Platinum LimitedIncorporated in BermudaExempt company number 26290Board of DirectorsNicholas Sibley Non-executive Chairman Stuart Murray Chief Executive Officer David Dix Non-executive (appointed 31 March 2004) Edward Haslam Non-executive (appointed 1 May 2004) Catherine Markus Non-executive Sir William Purves Non-executive (appointed 10 February 2004) Patrick Quirk Non-executive Zwelakhe Sisulu Non-executive (appointed 4 February 2005)Audit/Risk CommitteeSir William Purves (Chairman)David DixEdward HaslamNicholas SibleyRemuneration/Succession Planning CommitteeEdward Haslam (Chairman)Catherine MarkusNicholas SibleyNomination CommitteeThe full Board comprises the Nomination CommitteeCompany SecretaryWilli BoehmIssued CapitalAt 31 December 2004, the Company had on issue:82,753,892 fully paid common shares4,027,979 unlisted optionsSubstantial Shareholders 31 December 2004 No. of Shares Percentage Impala Platinum Holdings Ltd 7,141,966 8.63 % J P Morgan Nominees Australia Limited 5,512,590 6.66 % ANZ Nominees Limited 5,222,040 6.31 % Chase Nominees Limited (FISL) 4,684,626 5.66 % Broker (LSE)Numis SecuritiesCheapside House138 CheapsideLondon EC2V 6LHTelephone: +44 20 7776 1500Facsimile: +44 20 7776 1550Broker (ASX)Euroz SecuritiesLevel 14, The Quadrant1 William StreetPerth WA 6000Telephone: +61 8 9488 1400Fax: +61 9488 1478Sponsor in South Africa (JSE)Nedbank Capital135 Rivonia RoadSandown, Sandton 2196Telephone: +27 11 294 3601Aquarius Platinum (South Africa) Aquarius Platinum Corporate Services (Proprietary) Ltd. Pty Ltd 50.5% Owned 100% Owned (Incorporated in the Republic of South (Incorporated in Australia) Africa) ACN 094 425 555 Registration Number 2000/000341/07 Level 4, Suite 5 The Great Wall Group Building Block A, 1st Floor South Shore Centre 5 Skeen Boulevard 85 The Esplanade Bedfordview South Africa 2007 South Perth Western Australia 6151 P O Box 1282 Telephone: +61 (8) 9367 5211 Bedfordview South Africa 2009 Facsimile: +61 (8) 9367 5233 Telephone: +27 11 455 2050 Email: [email protected] Facsimile: +27 11 455 2095 Email: [email protected] AQPSA Management Stuart Murray - Executive Chairman Gert Ackerman - Managing Director Ayanda Khumalo - Finance Director Gordon Ramsay - Projects Director Neil Collett - General Manager P&SA Project Gabriel de Wet - General Manager Engineering Graham Ferreira - General Manager Finance Hugo Hƒ¶ll - General Manager Everest Robert Mallinson - General Manager Marikana Hulme Scholes - General Manager Commercial & Legal / Company Secretary Dave Starley - General Manager Kroondal Mimosa Mine Management Alex Mhembere - Managing Director Winston Chitando - Finance Director Herbert Mashanyare - Technical Director Peter Chimboza - General Manager 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 ASACS Aquarius Platinum (SA) (Corporate Services) (Pty) Limited 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 EMPR Environmental Management Programme Report Everest Everest Platinum Mine Great Dyke Reef A PGE bearing layer within the Great Dyke Complex in Zimbabwe g/t Grams per tonne, measurement unit of grade (1 g/t = 1 part per million) JORC code Australasian code for reporting of Mineral Resources and Ore Reserves JSE JSE Securities Exchange South Africa Kroondal Kroondal Platinum Mine LHD Load Haul Dump machine Marikana Marikana Platinum Mine Mimosa Mimosa Mining Company (Private) Limited NOSA National Occupational Safety Association PGE Platinum Group Elements. Six metallic elements commonly found together which constitute the platinoids. These are platinum (Pt), palladium (Pd), rhodium (Rh), ruthenium (Ru), osmium (Os) and iridium (Ir). PGE(s) (6E) Platinum Group Elements. Six metallic elements commonly found together which constitute the platinoids. These are Pt (platinum), Pd (palladium), Rh (rhodium), RU (ruthenium), Ir (Iridium) and Os (osmium) PGM(s) (4E) Platinum Group Metals. Aquarius reports the composite grade comprising Pt+Pd+Rh+Au (gold), the Pt, Pd and Rh being the most economic platinoids in the UG2 Reef. P&SA Pooling & Sharing Agreement between KPM and RPM Ltd R South African Rand RK1 Consortium comprising Aquarius Platinum (SA) (Corporate Services) (Pty) Limited (ASACS), GB Mining and Exploration (SA) (Pty) Limited (GB) 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 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 $ United States Dollars Z$ Zimbabwe Dollar Further information please contact:In Australia: Willi Boehm Aquarius Platinum Corporate Services Pty Ltd +61 (0)8 9367 5211 In United Kingdom: Alex Buck Nick Bias Buckbias Limited Aquarius Platinum Limited +44 7392 740 452 + 44 (0)7887 920 530 In South Africa: Charmane Russell Stuart Murray Russell & Associates Aquarius Platinum (South Platinum) +27 11 880 3924 (Pty) Ltd +27 (0)11 455 2050 or visit: www.aquariusplatinum.com ENDRelated Shares:
AQP.L