10th Feb 2006 07:26
AQUARIUS PLATINUM LIMITED10 February 2006HALF YEAR RESULTS: 31 DECEMBER 2005GROUP Net profit up 332% period-on-periodNet PROFIT FROM OPERATIONS UP NEAR eight-times PERIOD-on-PERIODinterim dividend doubles to 6 US cents per shareHighlights of the half year * Net Profit $25.9 million, cash profit $38.7 million * Profit achieved from operations up 793% to $25.9 million from $2.9 million * Interim dividend doubles to 6 US cents per share * Record half year production Operational * On-mine production up 47% to 362,418 PGM ounces (Aquarius attributable production up 36% to 198,426 PGM ounces) * P&SA1 at Kroondal expansion delivers a 67% increase in production to 232,537 PGM ounces (Aquarius attributable production 116,269 PGM ounces) * P&SA2 at Marikana implemented with effect from second quarter start * Everest Mine commissioned in November 2005, produces 7,111 PGM ounces in December * Mimosa Mine production up 18% at 71,762 PGM ounces (Aquarius attributable production 35,881 PGM ounces) Financial * Revenues increased 62% to $159.7 million. Average basket prices increased to $876 per PGM ounce in South Africa and $637 per PGM ounce in Zimbabwe * Net profit after tax "cash-basis" up 125% at $38.7 million (48.7 US cents per share) * Accounting profit (to IFRS) at $25.9 million (31.5 cents per share) after deducting amortisation, depreciation fair value uplift of $12.8 million * All operations contributed to net profit for the half year * Consolidated cash balances rose by $10 million during period to $85 million * Debt refinancing facility completed on more favourable terms Strategic * `New order' mining rights applications at an advanced stage * P&SA2 at Marikana implemented to unlock potential at the Marikana mine * Mimosa expansion (Wedza Phase IV Upgrade) announced and on track to increase mine production to 168,750 PGM ounces * MCC appointed as primary open cast mining contractor at Marikana, commencing operations in January 2006 * Aquarius accepted for inclusion in to the FTSE 250 in December Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said,"Aquarius has delivered solid results for the half year. A more than threefoldincrease in net earnings is a direct result of our unrivalled production growthand a firm operational performance, at a time of good platinum group metalprices. The outlook for the remainder of the year is positive, providing theconfidence to increase the interim dividend to 6 US cents per share."Financial results: Half Year to 31 December 2005Aquarius Platinum Limited announces consolidated earnings for the half year to31 December 2005 of $25.9 million (31.5 cents per share). Profit on a"cash-basis" is $38.7 million.Revenues from ordinary activities for the period rose 62% to $159.7 million(comprising sales revenue of $157.5 million and interest and other income of$2.0 million) from $98.8 million (sales revenue $92.2 million and interest andother income of $7.6 million).Costs of production rose by 20% to $88.6 million with an increase in productionof 31% to 191,315 operating PGM ounces (total attributable production of198,426 PGM ounces less Everest production of 7,111 PGM ounces).Operating performances at Kroondal and Mimosa were good, resulting in themajority of profits earned.Marikana delivered a maiden net profit, despite difficult conditions and poorcontractor performance by Moolman Mining SA, largely on the back of improvedcommodity prices and a reduced depreciation and amortisation charge as a resultof the implementation of the P&SA2. The CTRP, despite experiencing problematicfeed stock quality issues, delivered a modest net profit for the period.Amortisation and depreciation were marginally higher at $9.1 million, up from$8.6 million, despite a 31% increase in production from operations (excludingEverest) and includes an additional $0.5 million in depreciation andamortisation as a result of the adoption of IFRS. The implementation of the P&SA2 which extended the life of mine at Marikana, resulted in a reduceddepreciation and amortisation charge to the income statement. This togetherwith rising platinum group metal prices resulted in a modest net profit at thisoperation.Aquarius incurred net finance charges for the period of $0.5 million,comprising $1.8 million in interest income and $2.3 million interest expense.Interest incurred as part of the BEE transaction of $1.0 million wascapitalised as part of the Everest construction costs.Net profits from operations rose from $2.9 million (prior period of $6.0million included $3.1 million profit on sale of 2% of AQPSA per the BEEtransaction) to $25.9 million, a 793% increase, following good operatingperformances at Kroondal and Mimosa, coupled with rising platinum group metalbasket prices in both South Africa and Zimbabwe.The Directors have declared an interim dividend of 6 US cents per share (2005:3 US cents per share) payable on 23 March 2006 to shareholders registered on 2March 2006.Aquarius' cash balances of $85 million at 31 December 2005 are expected toincrease progressively in the second half of the year as Group productionincreases with additional production from the Everest Mine. This together withthe new RMB facility will provide Aquarius with the requisite funding for anyfuture growth opportunities and for balance sheet optimisation.Group Financials by Operation$ million Kroondal Marikana Mimosa CTRP Everest Corporate Total 50% * PGM ounces 116,269 37,716 35,881 1,449 7,111 - 198,426(attributable) Revenue (net of FX 92.6 30.4 31.7 1.2 - 1.5 157.4 sales variance) Cost of sales (48.7) (29.6) (19.4) (0.9) - - (98.6) Gross profit 43.9 0.8 12.3 0.3 - 1.5 58.8 Amortisation of fair (3.2) (0.3) (0.3) - - - (3.8) value Gross profit after FVU 40.7 0.5 12.0 0.3 - 1.5 55.0 Corporate admin and - - - - - (2.0) (2.0) other costs Foreign currency gain/ 0.3 0.9 0.5 - - (0.4) 1.3 (loss) Finance charges - - - - - (2.3) (2.3) Profit/(loss) before 41.0 1.4 12.5 0.3 - (3.2) 52.0 tax Tax Expense - - - - - (12.6) (12.6) Profit/(loss) after tax 41.0 1.4 12.5 0.3 - (15.8) 39.4 Minority interest - - - - - (13.5) (13.5) Profit/(loss) after 41.0 1.4 12.5 0.3 - (29.3) 25.9 minority interest *Everest costs were capitalised to 31 December 2005. The mine will be handedover to operations on 1 January 2006.Mine OperationsOn mine financial Kroondal Marikana Everest Mimosa CTRP performances: PGM ounces (attributable) 116,269 37,716 7,111 35,881 1,449 Revenue (net of FX variance 92.6 30.4 - 31.7 1.2on sales) ($m) Cash Costs (Rand per PGM 2,459 4,642 3,136 - 3,187ounce) Cash costs ($ per PGM ounce) 377 712 494 343 501 Gross margin 53% 14% 28% 61% 44% EBITDA ($m) 47.8 4.4 - 13.2 0.4ProductionTotal on-mine production increased 47% to 362,418 PGM ounces. Attributablegroup production for the half year was 198,426 PGM ounces (including 7.111 PGMounces from Everest), an increase of 36% over the previous correspondingperiod. The Group's production profile will continue to increase in the secondhalf as the Everest Mine continues to ramp-up. Following successfulcommissioning at Everest in December 2005, the mine was handed to operations inJanuary 2006.Production by Mine and Production by Mine attributable to AquariusPGMs (3E+Au) Production by Mine Production attributable to Aquarius Half Year ended Half Year ended Half Year ended Half Year ended Dec 2004 Dec 2005 Dec 2004 Dec 2005 Kroondal 139,099 232,537 69,504 116,269 Marikana 45,713 48,111 45,713 37,716* Mimosa 60,994 71,762 30,497 35,881 CTRP - 2,897 - 1,449 Everest - 7,111 - 7,111 Total 245,806 362,418 145,714 198,426*P&SA2 at Marikana implemented with effect from second quarter, resultingattributable production reducing by 10,395 PGM ounces for the period.Foreign ExchangeThe Rand depreciated 4.7% period on period, from an average of R6.23 per dollarto R6.52 per dollar.The prices for platinum group metals showed healthy gains over the period, withthe PGM basket price (platinum, palladium, rhodium and gold) in South Africanaveraging $872 per PGM ounce across the operations and averaging $637 per PGMounce in Zimbabwe. The South African basket price increased 23% over the periodto $966 per PGM ounce at the end of December. The Zimbabwean basket priceincreased 20% to $746 per PGM ounce at the end of December.Financials Aquarius Platinum Limited Consolidated Income Statement For the Half Year ended 31 December 2005 $'000 Audit reviewed Half Year Ended Year Ended 31/12/05 31/12/04 30/6/05 Note: Revenue (i) 159,706 98,762 222,327 Foreign exchange loss on sales (ii) (2,297) (1,694) 2,797 Cost of sales (including D&A) (iii) (98,550) (83,088) (174,936) Gross profit 58,859 13,980 50,188 Amortisation of fair value uplift (iv) (3,725) (2,599) (6,745)of mineral properties Gross profit after amortisation 55,134 11,381 43,443of fair value uplift Corporate Admin & other operating (v) (1,983) (3,389) (5,976)costs Finance costs (vi) (2,324) (6,185) 484 Foreign exchange gains/(losses) (vii) 1,207 2,395 (9,889) Profit before tax 52,034 4,202 28,062 Income tax expense (viii) (12,581) 1,113 (3,446) Profit after tax 39,453 5,315 24,616 Minority interest (ix) (13,538) 687 (3,666) Net profit 25,915 6,002 20,950 Earnings per share (basic - 31.50 7.32 25.32cents) Notes on the Consolidated Income Statement i. Sales revenue increase reflects increased PGM production and higher PGM basket price achieved ii. Reflects effects of adjusting revenue recorded at time of production at Kroondal, Marikana and CTRP to actual receipts received at the end of the four month pipeline iii. Cost of sales rose owing to increased production and increased depreciation and amortisation iv. Relates to amortisation of purchased goodwill associated with the Kroondal, Marikana and Mimosa mines v. Relates to administration costs of the Aquarius Group vi. Finance costs were lower owing to repayment of Investec debt and interest cost (relating to BEE transaction) capitalised of $1.0 million against the Everest construction vii. Reflects foreign exchange movements on net monetary assets viii. Income tax expense for the period for AQPSA and Mimosa ix. Minority interests reflect 49.5% outside equity interest of the Savannah Consortium (SavCon) and Impala Platinum Holdings Limited (Implats) in AQPSA Aquarius Platinum Limited Consolidated Cash Flow Statement Half year ended 31 December 2005 $'000 Audit Reviewed Half year ended Year ended 31/12/05 31/12/04 30/06/05 Note: Net operating cash inflow (i) 58,701 9,878 31,458 Net investing cash outflow (ii) (75,406) (36,847) (88,152) Net financing cash outflow (iii) 23,496 76,445 54,921 Net increase in cash held 6,791 49,476 (1,773) Opening cash balance 75,251 77,942 77,942 Exchange rate movement on (iv) 2,912 9,132 (918)cash Closing cash balance 84,954 136,550 75,251Notes on the December '05 Consolidated Cash Flow Statement i. Net operating cash flow includes $65 million inflow from operations, income tax paid $6 million and $0.5 million net finance costs ii. Reflects payments for mine development and development costs iii. Reflects net proceeds from borrowings $27 million, proceeds of the issue of shares $0.6 million and payment of dividends of $4.1 million iv. Reflects movement of Rand against the US dollar Aquarius Platinum Limited Consolidated Balance Sheet At 31 December 2005 $'000 Audit Reviewed Half year ended Year ended Note: 31/12/05 31/12/04 30/06/05 Assets Cash assets 84,954 136,746 75,251 Current receivables (i) 46,098 34,162 44,695 Other current assets (ii) 22,798 20,192 16,312 Property, plant and equipment (iii) 145,335 155,289 137,819 Mining assets (iv) 333,675 254,330 271,050 Other non-current assets 460 512 437 Total assets 633,320 601,231 545,564 Liabilities Current liabilities (v) 37,089 58,821 35,480 Non-current payables (vi) 158,190 176,697 150,735 Non-current interest-bearing (vii) 44,042 18,519 16,037liabilities Other non-current liabilities (viii) 85,811 82,584 78,315 Total Liabilities 325,132 336,621 280,567 Net assets/(liabilities) 308,188 264,610 264,997 Equity Parent entity interest 260,014 233,907 235,352 Minority interest 48,174 34,431 32,573 Total Equity 308,188 268,338 267,925Notes on the December 05 Consolidated Balance Sheet i. Reflects debtors receivable on increased PGM concentrate sales ii. Reflects PGM concentrate inventory iii. Represents fixed assets within the Group iv. Increase in mining assets reflects Kroondal, Marikana, Mimosa and Everest mining (mining rights)) assets v. Includes tax payable ($11 million) and creditors ($26 million) vi. Includes BEE deferred settlement proceeds ($10.5 million) and non interest bearing portion of AQPSA shareholder loans (Implats $66 million and Savcon $81.5 million) vii. Includes interest bearing debt payable to RMB ($27 million), interest bearing shareholder loan Savcon ($17 million) viii. Reflects deferred tax liabilities $59.9 million, provision for closure costs $25.8 million OperationsAQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 50.5%)Kroondal Platinum MineSafetyThe (12-month rolling average) DIIR deteriorated to 0.96 during the half year.Action has been initiated to reduce the number of disabling injuries on themine.Mining * Underground operations hoisted a record 2.9 million tons from underground with a further 285,000 tons from opencast for the half year * The new No. 4 decline was established and was transferred as of 21st December 2005, as part of the boundary adjustments with the Marikana P&SA2 in exchange for the RPM Townlands Block Processing * Plant feed increased to a record 3.2 million tons * Plant head grade and recoveries fell marginally to 2.92g/t PGM and 78% respectively * Record production of 232,537 PGM ounces, a 67% increase period on period RevenueThe PGM basket price for the half year increased 28% period on period to $879per PGM ounce, resulting in mine revenue of R1.226 billion for the half year(AQPSA share 50%). The on-mine cash margin for the half year to December 2005rose to 53% compared to 38% for the first half to December 2005.OperationsPGM production increased by 67% to a record 232,537 PGM ounces for the halfyear (Aquarius attributable 116,269 PGM ounces). Plant head grade fellmarginally to 2.92g/t PGM in the half year. The K1 and the new K2 plant bothperformed well, processing a combined record of 3.2 million ROM tons, an 83%increase period on period. 131,000 ROM tons remained on the surface stockpileat the end of the half year.An increase in the opencast blend from 8% to 10% at the end of the half yearmarginally reduced recoveries to 78% for the half year. The blend ratio wasrequired to allow for a build up of an underground stockpile in preparation forthe Christmas and New Year holiday season. During the half year some processupgrades were completed at the K1 Plant.Cash costs per ROM ton decreased by 3.2% to R179 period on period. Cash costsper PGM ounce increased 5.8% to R2,459 per PGM ounce period on period, acredible performance over the 12 months. It should be noted that includes acombination of costs for development and ledging operations as a result ofdeepening the P&SA1 declines (R391 per PGM ounce), and higher costs associatedwith the increase in open cast blend, notably from deeper open pit tons.Kroondal Operating Costs ReconciliationR per PGM ounce 6 months Dec 6 months Dec Variance 2005 2004 Cash costs 2,459 2,323 (136) P&SA1 decline development (270) (267) 3 Grade dilution owing to decline (121) (R40) 81 development Cash costs after adjustments 2,069 2,016 52 Development and equipping of additional underground mining areas continued atthe Central, East,No. 3 and No. 4 decline shafts. This will ensure steady state production goingforward, even though the No. 4 decline will now form part of the Marikana P&SA2. A substantial total of 2,050 meters of development was completed.AQPSA's commitments on the P&SA1 expansion project totalled R322 million at 31December 2005 with R306 million paid. The expected final expansion capital costto AQPSA of the P&SA1 is estimated at R345 million (escalated) comparingfavourably to the cost of R370 million (unescalated) estimated at the time ofthe P&SA1 announcement in June 2003. Future capital expenditure at P&SA1 willbe largely of a sustaining nature to maintain steady-state operations.Marikana Platinum MineSafetyThe 12 month rolling average DIIR for the half year improved to 0.76.Mining * The contract with Moolman Mining South Africa (MMSA) was rescinded on 19th December 2005 on grounds of material misrepresentation by MMSA at time of tender * MCC were appointed in MMSA's stead, commencing operations in January 2006 * Stockpiles at the end of the half year totalled 54,000 ROM tons * Trial underground mining extended 140 meters down dip of the portals Processing * 700,000 ROM tons were processed from the pits during the period * Overall concentrator recoveries for the half year were 62% * 48,111 PGM ounces were produced (Aquarius attributable 37,716 PGM ounces) RevenueThe PGM basket price for the half year increased 25% period on period to $863per PGM ounce. AQPSA's Marikana revenues for the half year were R197 million,greater than 50% of mine revenues for the period owing to:(a) the P&SA2 becoming effective retrospectively to September 22nd 2005; and(b) pipeline payment effectsCash costs for the half year were negatively impacted as a result of nearnormal stripping ratios coupled with under delivery of reef. A high strip ratioof 35:1 during the half year, coupled with the increased proportion of poorrecovery ores, resulted in a cash cost of R4,642 per PGM ounce, a reduction of1.3% period on period.AQPSA's cash margin for the half year improved from -30% to 14% owing to higherbasket prices and a marginal improvement in cash costs to R4,642 per PGM ounce.The margin figure was enhanced by pipeline effects owing to prices over theperiod.OperationsMine reef tons fell to 736,000 tonnes. However, improvements in recoveries to62% resulted in a 5% increase in production to 48,111 PGM ounces (Aquariusattributable 37,716 PGM ounces).A zone of large boulders was encountered in Pit A which resulted in low diggingrates in this area. The issue was resolved by revising the drilling pattern.Extended depth of weathering in Pits A and SW affected PGM recoveries fromthese ores thereby requiring blending with unoxidised ore and thus affectingoverall plant throughput. This resulted in a ROM stockpile of 54,000 tons ofweathered material containing an estimate recoverable 2,400 PGM ounces.Marikana Pool & Share Agreement (P&SA2)The P&SA2 between AQPSA and Anglo Platinum was retrospectively implemented inSeptember 22nd 2005. Production is anticipated in January 2006 from No. 4shaft, transferred from Kroondal P&SA. The upgrading of the metallurgical plantat Marikana to a capacity of 250,000 tons per month will commence shortly.Currently down-dip developments on the No. 4 shaft declines as well as lateraldevelopment to the West are on schedule.Trial Underground MiningThe portals were successfully established and sinking has progressed to 140meters down-dip. The dip of the Marikana ore body is flatter than initiallyenvisaged which will allow for more conventional bord and pillar mining and isexpected to positively impact on the production ramp-up rates of the P&SA2.All lateral development for ventilation purposes was completed to the east ofthe declines and underground development has progressed to the extent thatmechanical installations commenced in January 2006.Moolman Mining DisputeOn 19 December 2005, Aquarius Platinum (South Africa) (Pty) Ltd, AQPSA,rescinded the Marikana Mining contract with Moolman Mining ("Moolmans").Moolmans was replaced by MCC Mining, an already established contractor at boththe Kroondal and Everest Mines. Production at Marikana has thus continuedwithout any untoward interruption.Rescission of the Moolmans' contract was based on the recent discovery,following an audit by KPMG, that Moolmans misrepresented material facts whichinduced AQPSA into concluding that contract. The decision to resile from thecontract was taken after careful consideration of external forensic accountingand legal advice. AQPSA should not continue in business with an essentialsupplier who has proved unreliable.AQPSA has instructed its attorneys vigorously and expeditiously to pursue legalproceedings against Moolmans for recovery of all damages caused by Moolmans.These are estimated to amount to approximately ZAR1 billion. Preparatory workhas already commenced and it is anticipated that formal High Court proceedingswill be launched not later than May 2006.Moolmans has alleged the following counterclaims against AQPSA:a) a claim for escalation ("rise and fall") of R218.5 million, excludinginterest;b) a claim for a so-called `early termination penalty' of R70 million.These claims alleged by Moolmans will be defended. There is, in AQPSA's view,no reasonable prospect of success for any of Moolmans' claims and no liabilityhas been recognised.Everest Platinum MineSafetyThe (12 month rolling average) DIIR for the first half was 1.18 for the halfyear. Regrettably on 17th October 2005 an assistant pipe fitter suffered fatalinjuries when he fell from a steel structure 8 metres high. An investigationhas been completed by the Department of Minerals and Energy; however, thereport has not yet been issued. The preliminary indications are that theassistant pipe fitter was issued and trained in the use of a safety harness;however, he failed to secure himself. All employees working at height have beenretrained.Mining * Opencast operations ahead of schedule with 279,000 tons produced during the period * Underground development continuing, producing 85,000 tons in the period * Stockpiles at the end of the half year totalled 472,000 tons Processing * Concentrator plant hot commissioned ahead of schedule * 128,757 tons were processed * 7,111 PGM ounces produced * In line with the commissioning period, concentrator plant recoveries were 55% RevenueThe PGM basket price for the period was $886 per PGM ounce. Revenue for thehalf year was R31 million which will be credited to the capital cost of theproject.As a result of the more rapid ramp-up of operations and the prospect ofmaintaining the mine in positive net profit territory from hereon, the minewill convert to operational status from 1st January 2006.OperationsOpencast mining remained ahead of programme, with a total of 279,000 tonsproduced during the half year. The opencast mining area continues to performwell in terms of production and costs, providing the bulk of the reefstockpile.Underground mining progressed well during the period, with on-reef declinedevelopment and the first stoping sections being established. Undergroundproduction tonnages were as planned, with 85,000 tons of underground ROM tonsproduced. Equipping of the underground mining is on track with conveyorinstallations, ventilation and mining services completed on schedule. Theunderground mining is ramping up as planned within budget, and no significantgeological or mining problems have been experienced. The combined opencast andunderground mining have yielded a cumulative stockpile of 472,000 ROM tons.The Everest construction programme finished approximately a month ahead ofschedule with hot commissioning commencing at the end of November 2005. Hotcommissioning proceeded very well with 128,757 tons milled during the Decemberproduction month to produce 7,111 PGM ounces. The plant performed withinexpectations for the commissioning period with a recovery of 55%. Plant feedconsisted predominantly of open cast ore at a head grade of 3.12 g/t PGM.Process plant availability and throughput is encouraging and a steady ramp-upin tonnage throughput is anticipated in the current quarter.Project Capital ExpenditureThe capital expenditure budget is R819 million including a R33 millionallowance for escalation. The project capital expenditure commitments were R622million at the end of the December 2005 with capital expenditure spent to dateof R413 million. It is anticipated that the project will now incur capitalexpenditure of approximately R707 million as a result of: * Direct project savings identified of R23 million; * Escalation allowance of R33 million not utilised; and * Early project start savings at R56 million as a result of no longer capitalising working costs for from January 2006. Mimosa Mine (Aquarius 50%)SafetyThe mine recorded a significant improvement in safety performance. The (12month rolling average) DIIR for the half year was 0.12.Mining * Underground operations hoisted 862,000 tonnes, a 31% increase period on period Processing * Plant feed increased to a record 3.2 million tons * Plant head grade and recoveries improved marginally to 3.74g/t PGM and 78% respectively * Production of 71,762 PGM ounces (Aquarius attributable 35,881 PGM ounces) RevenueThe PGM basket price for the half year increased by 10% period on period to$637 per PGM ounce. Together with the contribution from base metals(approximately 29% of gross revenue), this generated sales revenue for the halfyear of $55.4 million, with a gross cash margin increase of 61%.OperationsDuring the half year mining operations hoisted a total of 862,000 ROM tonscompared. The average plant head grade for the half year improved 2% period onperiod to 3.74g/t PGM. Production for the half year improved 18% period onperiod to a record 71,762 PGM ounces.The plant optimisation programme continued during the half year, focusing onthe use of alternative grinding media and reagents. The objectives of thetrials were to improve metal recovery rates and identify a reliable supplier ofmaterials. Following the trials, appropriate and cost effective reagents andgrinding media have been selected.Cash costs per PGM ounce rose for the period by 7.5% to US$343 per PGM ounce.The cash cost net of by-product credits fell by 5% to US$100 per PGM ounce. Thesecond quarter saw a strong improvement in cash costs to $325 per PGM ounce($94 per ounce after by-product credits) in part owing to a relaxation ofcontrols on foreign exchange management through the Tradeable Foreign CurrencyBalance System (TFCBS).Dividend receipts from Mimosa continue to be passed through to shareholders.Wedza Phase IV UpgradeWork on the Wedza Phase IV Upgrade project to take production from 120,000 tonsto 150,000 tons milled per month commenced during the half year following thegranting of all requisite approvals by government. The project is on track forcommissioning in May 2006, ramping to full production in July 2006.AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTDChromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%)SafetyNo accidents were reported during the period.Processing * 98,000 tons processed during the half year * 2,897 PGM ounces produced OperationsThroughput of current arisings from the Kroondal Chrome Mine and dump materialfrom the Bayer Chrome Mine rose to above planned levels during the half year.The additional Bayer related feed rates had a negative impact on recoverieswhich dropped as low as 20% at times. It has been determined that the dumpmaterial requires further upgrading prior to being fed to the CTRP. Thequantity of dump material has since been restricted and will remain so untilfurther metallurgical work is completed. By December, recoveries on the currentarisings had improved to over 40%.Test work at Mintek was commissioned to better understand the metallurgicalcharacteristics of the various feed sources. Preliminary results are providinga strong basis for improved performance in the future but the challenges aremore complex than initially predicted. The project planning for the retrofit ofadditional process equipment is underway and designs will be finalisedfollowing the final results of the Mintek test work.Cash operating costs per ton were R95 per ton treated, and R3,187 per PGMounce. A cash margin of 44% was achieved.CORPORATE MATTERSAQP DirectorateSubsequent to the end of the half year, Ms Cathie Markus tendered herresignation from the Board of Directors of Aquarius Platinum Limited. The Boardwish to record its appreciation of Ms Markus' contribution towards the growthof the Company during her tenure as director.AQPSA DirectorateIt is with great sadness that the Board of Directors of Aquarius Platinum SouthAfrica announces the death of Bruce Sutherland on 27 October 2005. Bruce wasinvolved with Aquarius since its inception, formerly as a Director of KroondalPlatinum Mines Limited and subsequently as an AQPSA Director and miningconsultant. He was a force in guiding the management of this young company andhis contributions will be sorely missed.AQPSA is pleased to announce the appointment of Peter Ledger as a Non-ExecutiveDirector and mining consultant to the Board of Aquarius Platinum South Africaas of January 2006. Peter was previously an Executive Director of Lonmin plc,responsible for its South African mining operations, retiring from thisposition in January 2005.Conversion of South African mining and prospecting rights a. Mining Rights The applications for Kroondal and Marikana have been passed on by the regionaloffice of the Department of Minerals and Energy to its Head Office in Pretoria.The Everest conversion is still with the regional office and it is anticipatedthat this should be passed on to Head Office by the end of March 2006. b. Prospecting Rights Two new order applications have been granted: Hoogland and Chieftains Plain.New debt facilityAQPSA has entered into a new debt facility with Rand Merchant Bank to refinanceits existing debt facilities on significantly improved terms. The new facilityof R700 million will provide AQPSA with the requisite funding for any futuregrowth opportunities and for balance sheet optimisation. It reflects thesubstantially improved operational profile of AQPSA in comparison to that inexistence when the Investec facility was originally entered into in 2002.The facility has been structured as a 6 year amortising senior loan andprovides AQPSA with a large degree of flexibility in managing its funding costand financial risk. The facility can be denominated in either Rands or USDollars at AQPSA's election and AQPSA is entitled at any time during thefacility term to repay and or redraw principle amounts subject to theamortising facility limit not being breached.The margin payable on the new facility is 190 basis points above both JIBAR andLIBOR.Per PGM (3E+Au)Per PGE (5E+Au)Expansion 100%Statistics Kroondal P&SA1 Marikana P&SA2 Everest Unit 6 6 6 6 6 6 months months months months months months Dec Dec Dec Dec Dec Dec 2005 2004 2005 2004 2005 2004 Safety DIIR Rate/200,000 0.96 0.66 0.76 0.75 1.18 - man hours Revenue Gross revenue Millions 1,227 521 197 165 31 - PGM basket Price $/oz 879 686 863 688 886 - Gross cash % 53 38 14 (30) 28 - margin Nickel Price $/lb 6.17 6.37 6.17 6.36 6.09 - Copper Price $/lb 1.83 1.35 1.83 1.35 2.08 - Ave R/$ rate 6.52 6.23 6.52 6.23 6.35 - Cash Costs on mine Per ROM ton R/ton 179 185 303 281 168 - $/ton 27 30 47 45 27 - R/oz 2,458 2,323 4,642 4,699 3,136 - $/oz 377 373 712 755 494 - R/oz 2,025 - 3,857 - 2,695 - $/oz 311 - 592 - 424 - Capex Current/ R'000s 33,525 1,497 6,746 7,148 - - Sustaining 100% $'000s 5,145 236 1,035 1,148 - - R'000s 57,936 313,347 8,147 - 349,189 - $'000s 8,891 50,593 1,250 - 55,026 - Mining Processed Underground ROM ton `000s 2,911 1,595 36 - 39 - Open Pit ROM ton `000s 285 151 700 764 89 - Total ROM ton `000s 3,195 1,746 736 764 129 - Grade Plant Head g/t PGM 2.92 3.09 3.25 3.75 3.12 - Recoveries % 78 80% 62 50% 55 - PGM Production Platinum Ozs 138,959 83,048 30,131 29,745 4,161 - Palladium Ozs 67,752 40,286 13,288 12,253 2,351 - Rhodium Ozs 24,672 15,008 4,327 3,309 532 - Gold Ozs 1,155 667 365 406 67 - Total PGM Ozs 232,537 139,009 48,111 45,713 7,111 - (3E+Au) Total PGE Ozs 282,268 - 57,887 - 8,223 - (5E+Au) Base Metals Production Nickel Tons 222 130 72 49 13 - Copper Tons 98 57 41 26 5 - Chromite (000) Tons `000s 258 119 104 124 - - *Data reflects 100% of operationsPer PGM (3E+Au)Per PGE (5E+Au)Expansion 100%Statistics Mimosa CTRP Unit 6 months 6 months 6 months 6 months Dec 2005 Dec 2004 Dec 2005 Dec 2004 Safety DIIR Rate/200,000 man 0.12 0.40 0 - hours Revenue Gross revenue Millions 55.40 40 17 - PGM basket Price $/oz 637 580 1,024 - Gross cash margin % 61 62 44 - Nickel Price $/lb 6.53 6.11 6.17 - Copper Price $/lb 1.60 1.08 1.83 - Ave R/$ rate - - 6.52 - Cash Costs on mine Per ROM ton R/ton - - 95 - $/ton 32 29 15 - R/oz - - 3,268 - $/oz 343 319 501 - R/oz - - 2,318 $/oz - - 356 - Capex Current/Sustaining R'000s - - - - 100% $'000s 4,327 9,154 - - R'000s - - 378 - $'000s 3,581 656 58 - Mining Processed Underground ROM ton `000s 862 656 - - Open Pit ROM ton `000s - - - - Total ROM ton `000s 862 656 98 - Grade Plant Head g/t PGM 3.74 3.66 2.95 - Recoveries % 78 76.9 33 - PGM Production Platinum Ozs 36,509 31,284 1,801 - Palladium Ozs 27,497 23,076 632 - Rhodium Ozs 2,797 2,408 458 - Gold Ozs 4,959 4,226 6 - Total PGM (3E+Au) Ozs 71,762 60.994 2,897 - Total PGE (5E+Au) Ozs - - 4,085 - Base Metals Production Nickel Tons 1,000 891 - - Copper Tons 832 736 - - Chromite (000) Tons `000s 30 26 - - Aquarius Platinum LimitedIncorporated in BermudaExempt company number 26290Board of DirectorsNicholas Sibley Independent Non-executive ChairmanStuart Murray Chief Executive OfficerDavid Dix Independent Non-executiveEdward Haslam Independent Non-executiveSir William Purves Senior Independent Non-executive DirectorPatrick Quirk Independent Non-executiveZwelakhe Sisulu Non-executiveCatherine Markus Non-Executive Director (resigned 17th January 2006)Audit/Risk CommitteeSir William Purves (Chairman)David DixEdward HaslamNicholas SibleyRemuneration/Succession Planning CommitteeEdward Haslam (Chairman)Nicholas SibleyNomination CommitteeThe full Board comprises the Nomination CommitteeCompany SecretaryWilli BoehmIssued CapitalAt 31 December 2005, the Company had on issue:82,864,892 fully paid common shares3,746,402 unlisted optionsSubstantial Shareholders 31 December 2005 Number of Shares Percentage Impala Platinum Holdings Ltd 7,141,966 8.6 National Nominees Limited 5,788,271 7.0 J P Morgan Nominees Australia Limited 4,750,117 5.7 ANZ Nominees Limited 4,343,794 5.2 Broker (LSE)Williams de Broƒ«6 BroadgateLondon EC2M 2RPTelephone: +44 (0)20 7588 7511Facsimile: +44 (0)20 7588 8860Broker (ASX)Euroz SecuritiesLevel 14, The Quadrant1 William StreetPerth WA 6000Telephone: +61 (0)8 9488 1400Facsimile: +61 (0)8 9488 1478Sponsor (JSE)Investec Bank Limited100 Grayston DriveSandown Sandton 2196Telephone:+27 (0)11 286 7326Facsimile:+27 (0)11 291 1066Aquarius Platinum (South Africa) (Proprietary) Aquarius Platinum Corporate Ltd Services Pty Ltd 50.5% Owned 100% Owned (Incorporated in the Republic of South Africa) (Incorporated in Australia) Registration Number 2000/000341/07 ACN 094 425 555 The Great Wall Group Building Level 4, Suite 5 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 (0)8 9367 Bedfordview South Africa 2009 5211 Telephone: +27 (0)11 455 2050 Facsimile: +61 (0)8 9367 5233 Facsimile: +27 (0)11 455 2095 Email: Email: [email protected] [email protected] AQPSA Management Stuart Murray - Executive Chairman Gert Ackerman - Managing Director Ayanda Khumalo - Finance Director Neil Collett - General Manager Business Development Graham Ferreira - General Manager Finance & Company Secretary Hugo Hƒ¶ll - General Manager Everest Robert Mallinson - General Manager Marikana Gordon Ramsay - General Manager Projects Dave Starley - General Manager Kroondal Gabriel de Wet - General Manager Engineering Mimosa Mine Management Alex Mhembere - Managing Director Winston Chitando - Finance Director Herbert Mashanyare - Technical Director Peter Chimboza - Operations Director 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 PGM 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(s) (6E) 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) (5E+Au) Platinum Group Metals. Five metallic elements commonly found together which constitute the payable platinoids plus gold. These are platinum (Pt), palladium (Pd), rhodium (Rh), ruthenium (Ru), iridium (Ir) and gold (Au) PGM(s) (3E+Au) Platinum Group Metals as reported by Aquarius Platinum. These are platinum (Pt), palladium (Pd), rhodium (Rh) and gold (Au) constituting the majority of payable metal 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), 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 (0)7392 740 452 + 44 (0)7887 920 530 In South Africa: Charmane Russell Stuart Murray Russell & Associates Aquarius Platinum (South Platinum) +27 (0)11 880 3924 (Pty) Ltd +27 (0)11 455 2050 or visit: www.aquariusplatinum.com ENDAQUARIUS PLATINUM LIMITEDRelated Shares:
AQP.L