7th Feb 2008 07:03
AQUARIUS PLATINUM
Half Year Financial Results (December 2007)
Highlights of the half year
Net Profit up 25% to $106.6 million (US 41.6 cents per share)
Production stable at 277,813 PGM ounces attributable
Interim dividend up 150% to US 10 cents per share
Operational
Kroondal margins stable despite increased development and K5 ramp-up
Increased production at Marikana as underground operations ramp-up
Continued ramp-up at Everest lifts production and profit margins
Mimosa Phase V expansion near completion
Financial
Average basket prices increased 24% to $1,502 per PGM ounce
Revenues up 28% to $423.7 million
Net profit up 25% to $106.6 million (US 41.6 cents per share)
Consolidated cash balances at period end $368.7 million, up $81 million since June 2007
Strategic
Binding offer for the acquisition of a 50% interest in Platinum Mile Resources (Pty) Limited accepted
Wedza Phase V expansion 85% complete, commissioning on 4 March 2008
Three-for-one share split completed
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said, "In the face of a difficult six months from an operational point of view, I am pleased to be reporting results with a 25% increase in net profits and a solid increase in our interim dividend.
The operating environment has been troubled by safety issues and poor industrial relations management by certain of our contractors, whilst power issues in both Zimbabwe and South Africa have reared their head to a greater degree. Equipment failure issues at Kroondal and Mimosa were also a negative feature of the half year.
Despite these problems, production was maintained on a period on period basis and coupled with rising metals prices, the groups profitability has risen most satisfactorily.
The coming half year will be most challenging (as already reported to shareholders), although the ongoing rise in prices will ameliorate this impact. Until the power situation in both South Africa and Zimbabwe settles, it is rather difficult to predict where the year's full production will end up.
On a brighter note, I am pleased to report, the announcement, following our recent Board meeting, of the acquisition of a 50% interest in Platinum Mile Resources, a tailings retreatment operation, already in production. Following completion of documentation, the meeting of conditions precedent and regulatory approvals, we are pleased to welcome Mvelaphanda Holdings as a shareholder and both parties are committed to exploring further opportunities in the field of platinum group metal production from tailings."
Financial results: Half Year to 31 December 2007
Aquarius Platinum Limited announces consolidated earnings for the half year to 31 December 2007 of $106.6 million (US 41.6 cents per share), up 25% on the previous corresponding six month period to December 2006.
Revenues from ordinary activities for the period rose 28% to $423.7 million (comprising sales revenue of $411.5 million and interest and other income of $12.2 million) up from $330.4 million (sales revenue $322.3 million and interest and other income of $8.0 million) in the previous corresponding period. The increase in revenue was driven largely by higher PGM basket prices. PGM basket prices increased an average 24% for the group: 25% in South Africa and 13% in Zimbabwe. Strong base metal prices boosted earnings in Zimbabwe (with nickel up 39% and copper up 2%) contributing approximately 35% of revenue at Mimosa.
Total on mine PGM production for the period decreased 2% to 460,067 PGM ounces, however, production attributable to Aquarius increased a quarter of a percent (0.25%) to 277,813 PGM ounces due to the increased contribution from Everest. The total cost of production was $175.6 million, up 23%, in part due to a weaker US Dollar.
Amortisation and depreciation at $24.2 million (December 2006: $18.8 million) was higher in-line with the expansion program at AQPSA and also the increased rehabilitation provisions at Kroondal and Marikana being amortised. Net finance income for the period of $3.3 million, comprised $12.2 million of interest income and $8.9 million in interest expense.
The Directors have declared an interim dividend of US 10 cents per share (2006: US 4 cents per share) payable on 21 March 2008 to shareholders registered on 29 February 2008.
The cash balance at 31 December 2007 was $368.7 million.
Group Financials by Operation
$ million Kroondal Marikana Everest Mimosa CTRP Corporate Total
PGM ounces (4E) 104,017 36,472 95,560 39,016 2,748 - 277,813 (attributable)
Revenue 158.4 53.9 144.4 53.2 4.2 9.6 423.7
Cost of sales (64.0) (36.6) (55.4) (18.0) (1.6) (0.1) (175.7)
Gross profit 94.4 17.3 89.0 35.2 2.6 9.5 248.0
Other Income 0.4 0.2 0.6 Corporate admin & - - - (0.1) - (3.7) (3.8) other costs
Foreign currency (4.8) (1.5) (1.8) (4.0) 0.2 3.8 (8.1) gain/(loss)
Finance charges - - - - - (8.9) (8.9)
Profit/(loss) 89.6 15.8 87.2 31.1 3.2 0.9 227.8 before tax Tax Expense - - - - - (59.2) (59.2) Profit/(loss) 89.6 15.8 87.2 31.1 3.2 (58.3) 168.6 after tax Minority interest - - - - - (62.0) (62.0) Profit/(loss) after minority 89.6 15.8 87.2 31.1 3.2 (120.3) 106.6 interest
Group Cash Costs & Amortisation
Kroondal Marikana Everest Mimosa CTRP Average Total Cash Costs (Rand per 3,720 5,742 3,493 2,993* 1,983 3,770 - PGM ounce) Cash Costs ($ per PGM 536 828 504 414 286 544 - ounce) Amortisation & 8.3 6.4 7.4 2.0 0.1 - 24.2 Depreciation ($m)
*Mimosa costs are accounted for in US Dollars. For the purposes of this table, they have been translated into Rand at an exchange rate of USD1=ZAR6.93
Aquarius Half Year Group Attributable Production
Production
Total on mine PGM production for the period decreased 2% to 460,068 PGM ounces, however, production attributable to Aquarius increased a quarter of a percent (0.25%) to 277,813 PGM ounces due to the increased contribution from Everest.
At the start of the financial year, the Group was targeting annual production of 600,000 PGM ounces in FY2008, an increase of 13% on last year's record production. However, as already notified to shareholders (visit www.aquariusplatinum.com), the Group has suffered production losses since the start of the fiscal year as a result of industrial relations, safety related issues and power outages. In common with the rest of the industry, Aquarius faces ongoing issues with power supply in both South Africa and Zimbabwe. In view of the ongoing work to identify power savings, and the continuing production issues at the Everest Mine, new production guidance is difficult.
Production by Mine and Attributable to Aquarius
Mine Attributable to Aquarius PGMs (4E)
Half Year ended Half Year ended Half Year ended Half Year ended
Dec 2006 Dec 2007 Dec 2006 Dec 2007 Kroondal 238,902 208,035 119,451 104,017 Marikana 69,941 72,944 34,970 36,472 Everest 82,908 95,560 82,908 95,560 Mimosa 76,078 78,032 38,039 39,016 CTRP 3,576 5,496 1,788 2,748 Total 471,405 460,067 277,156 277,813 Foreign Exchange
The Rand strengthened marginally over the 6 months to December 2007, averaging 6.93 and closing at 6.81, though subsequently weakening into 2008. For the previous corresponding period to December 2006 the Rand averaged 7.23, strengthening from 7.10 at the start of the period to 7.01 at the end of the period.
Platinum Group Metal Prices
The PGMs reported strong price increases over the first half of the financial year, with platinum closing 20% higher at $1,530 per ounce, rhodium 10% higher at $6,850, gold increasing 28% to $837 per ounce, although palladium was flat at $364 per ounce. Platinum and rhodium prices continued to benefit from heightened concerns over supply constraints in South Africa. Furthermore, gold benefited from the weak US dollar and the flight to precious metals as an alternative asset class in the face of recessionary concerns. As we have moved into 2008, all the PGMs have risen materially from their year-end price levels, as power disruptions in South Africa and Zimbabwe have increased the likelihood of supply shortfalls.
PGM basket prices for the Group reached record levels over the first half of the financial year. At our South African operations, the four element basket price broke through R10,000 per ounce, averaging R10,894 per ounce, equal to $1,572 per ounce. In Zimbabwe, the average achieved basket price for the first half of the financial year averaged $1,074 per ounce. This resulted in a group basket price equivalent of $1,502 per PGM ounce or R10,409* per PGM ounce. The nickel price, however, fell significantly to close $13.41/lb. This impacted on revenue at the Mimosa mine where nickel is a significant by-product.
*Mimosa basket prices are accounted for in US Dollars. For the purposes of thiscalculation they have been translated into Rand at an exchange rate of USD1=ZAR6.9Financials Aquarius Platinum Limited Consolidated Income Statement For the Half Year ended 31 December 2007 $'000 Half Year Ended Year Ended Note: 31/12/07 31/12/06 30/6/07 Production: (attributable PGM 277,183 277,156 530,726ounces) Revenue (i) 423,657 330,388 709,184 Cost of sales (including D&A) (ii) (175,662) (142,578) (300,833) Gross profit 247,995 187,810 408,351 Other income 595 386 1,618 Corporate Admin & other costs (iii) (3,822) (3,574) (8,952) Finance costs (iv) (8,908) (7,322) (15,218)
Foreign exchange gains/(losses) (v) (8,068) 1,684 (1,341)
Profit before tax 227,792 178,984 384,458 Income tax expense (vi) (59,178) (46,175) (90,861) Profit after tax 168,614 132,809 293,597 Minority interest vii) (61,968) (47,438) (106,374) Net profit 106,646 85,371 187,223
Earnings per share (basic - cents) (viii) 41.58 33.46 72.84
Notes on the Consolidated Income Statement
Sales revenue increase reflects higher PGM basket price achieved
Increase in cost of sales reflects impact of inflation, on mine cash cost increases and higher amortisation charges
Relates to administration costs of the Aquarius Group
Increase in finance costs reflects increased pipeline finance on higher metal prices and increase in the unwinding of the interest on the rehabilitation provisions.
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 ($7.7 million) and revaluation of net monetary assets including impact of depreciating Zimbabwean Dollar ($0.4million)
Income tax expense for the period for AQPSA and Mimosa
Minority interests reflect 46% outside equity interest of the Savannah Consortium (SavCon) and Impala Platinum Holdings Limited (Implats) in AQPSA.
Earnings per share is calculated on the post share split (3:1) as approved by shareholders in November 2007.
Aquarius Platinum Limited Consolidated Cash Flow Statement Half year ended 31 December 2007 $'000 Half year ended Year ended Note: 31/12/07 31/12/06 30/06/07 Net operating cash inflow (i) 205,152 159,026 164,214 Net investing cash outflow (ii) (32,996) (25,489) (68,201) Net financing cash outflow (iii) (95,297) (36,895) (69,649) Net increase in cash held 76,859 96,642 26,364 Opening cash balance 287,663 162,425 263,563
Exchange rate movement on cash (iv) 4,160 4,496 (2,264)
Closing cash balance 368,682 263,563 287,663
Notes on the Consolidated Cash Flow Statement
Net operating cash flow includes $238 million inflow from operations, income tax paid $40 million and $6 million net finance income
Reflects payments for mine development and development costs
Reflects repayments of shareholder loans and share premium account (AQPSA level) $69 million, and payment of dividends of $25 million
Reflects movement of Rand against the US dollar
Aquarius Platinum Limited Consolidated Balance Sheet At 31 December 2007 $'000 Half year ended Year ended Note: 31/12/07 31/12/06 30/06/07 Assets Cash assets 368,682 263,563 287,663 Current receivables (i) 107,282 71,245 100,573 Other current assets (ii) 38,591 27,610 26,127 Property, plant and equipment (iii) 214,043 212,140 207,360 Mining assets (iv) 316,408 279,145 311,425 Other non-current assets (v) 13,230 8,571 12,026 Total assets 1,058,236 862,274 945,174 Liabilities Current liabilities (vi) 68,128 48,237 50,676 Non-current payables (vii) 2,391 124,410 54,228
Non-current interest-bearing liabilities (viii) 33,731 34,843 35,321
Other non-current liabilities (ix) 181,215 132,813 172,404 Total Liabilities 285,465 340,303 312,629 Net assets/(liabilities) 772,771 521,971 632,545 Equity Parent entity interest 542,199 392,814 456,138 Minority interest 230,572 129,157 176,407 Total Equity 772,771 521,971 632,545
Notes on the Consolidated Balance Sheet
Reflects debtors receivable on PGM concentrate sales.
Reflects PGM concentrate inventory.
Represents fixed assets within the Group.
Increase in mining assets reflects Kroondal, Marikana, Mimosa and Everest mining assets.
Includes tax payable ($22 million) and creditors ($46 million).
Includes recoverable portion of rehabilitation provision from Anglo Platinum ($12.8 million), investments in unlisted entities ($0.4 million)
Reflects Angloplats right of recovery of rehabilitation provisions. Decrease in non-current payables from pcp reflects repayment of shareholder loans since June 2007 of $54 million.
Includes interest bearing debt payable to RMB ($27 million), embedded lease re: Everest Mine $8 million.
Reflects deferred tax liabilities $109 million, provision for closure costs $72 million.
OPERATIONS
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 54%)
P&SA1 at Kroondal
Safety
The 12-month rolling average DIIR improved to 0.44 during the half year.
Regrettably a fatality occurred on 6 July 2007 at East Shaft, in which Mr Ernst Mower, a hydraulic fitter was electrocuted as a result of inter alia not following standard lock-out procedures. Further, on 21 November 2007 at Central Shaft. Mr Johannes Tseliso Nthunya, an underground load haul dumper operator, employed by contractor Murray and Roberts Cementation was fatally injured following a fall of ground accident. The mine was voluntarily shut down for 5 days for retraining of the underground workforce.
Mining
Significant primary development continues to improve face-availability and mining flexibility
Underground tonnages increases marginally to 3.2 million and open pit tonnages declined in line with plan to 133,000.
Head-grade averaged 2.68 g/t for the first half, down 6% compared to the first half 2007
Processing
Plant processed 3,152,000 tonnes, 6% lower that the first half 2007 largely due to smaller contribution from open-pit mining
Concentrator recoveries steady at 77%
Production down 13% compared to 208,035 PGM ounces
Revenue
The PGM basket price for the half was good at $1,586 per PGM ounce. Despite lower production, higher commodity prices lifted revenue to R2.1 billion (Aquarius share: R1.1 billion). The on-mine cash margin for the half year to December 2006 was steady at 64% compared with the first half to December 2006.
Operations
Production for the first six months decreased 13% compared with the first half 2006, totaling 3.3 million tons: 3,196,000 tons from underground operations and 133,000 tons from open pit operations.
Production was adversely affected by 9-day shut down of the K2 mill to repair both of the mill girth gears, the voluntary shut down of the mine following the fall of ground fatality, Eskom power outages and a one day national NUM strike. It is estimated that this reduced production by 7,000 PGM ounces (Aquarius share: 3,500 PGM ounces). Furthermore, the direction of the K5 declines had to be changed due to adverse geological anomalies, which negatively affected production.
Primary development increased by 8.1% over the period to a total 7,558 metres.
At the end of period, the stockpile had increased to 123,000 tons in preparation for the Christmas close and to mitigate the Q3 holiday impact.
Tons processed decreased 6% to 3.152 million tons. The plant head grade fell to 2.68g/t. for the first half due to mining width and dilution of ore whilst negotiating faults. PGM production decreased by 13% to 208,035 PGM ounces for the half year (Aquarius attributable: 104,017 PGM ounces).
Operating Cash Costs
Cash costs for the first half increased to R245 per ROM ton and $536 per PGM ounce.
Kroondal: Operating Cash Costs
4E (Pt+Pd+Rh+Au) 6E 6E net of by-products (Ni& (Pt+Pd+Rh+Ir+Ru+Au) Cu) Kroondal R 3,720 per PGM R 3,063 per PGE R 2,920 per PGE ounce ounce ounce
Kroondal Operating Cash Costs Reconciliation
Rand per PGM ounce (4E) 1H (Dec 2007) 1H (Dec 2006) Variance Cash costs 3,720 2,866 +30%
Ledging and primary development costs (627) (395) +59%
Secondary development costs (143) (49) +192%
Engineering infrastructure costs (196) (236) -17%
Cash cost after adjustments 2,754 2,186 +26% P&SA2 at MarikanaSafety
The 12-month rolling average DIIR for the half year improved to 0.33 compared with 0.43 in the previous corresponding period.
Regrettably, a fatality occurred on 11 December 2007 at One Shaft when Mr. Thabiso Chaka, an underground load haul dumper operator, employed by mining contractor Murray and Roberts Cementation, was fatally injured following a load haul dumper accident. The DME, together with AQPSA Management has conducted an inquiry into the accident.
Mining
Underground production ramp-up progressing well, totaling 558,000 tons for the period
Open pit production reduced in line with plan to 630,000 tons
Head grade decreased to 3.02 g/t due to changes in geology, notably the opencast reef intersecting areas of excessive internal waste.
Processing
Record 1,180,000 tons processed during the quarter, a 19% increase compared to the first half 2007
Recoveries fell to 64%, though increasing in the second quarter compared to the first quarter
72,944 PGM ounces produced (Aquarius attributable 36,472 PGM ounces), a 4% increase compared to the first half 2007
Revenue
The PGM basket price for the half year increased 22% period on period to $1,559 per PGM ounce. Revenues increased nearly 28% to R744 million from R580 million in the previous corresponding period. The gross margin for the first half was 44%, down from 46% in the previous corresponding period as a result of increased production costs.
Operations
Total production for the first six months increased to 1,187,000 million tons, made up of 558,000 underground tons and 630,000 open pit tons.
Production was adversely affected by industrial action of the underground contractor's (Murray & Roberts Cementation) employees. Due to an ongoing dispute over bonus payouts the workforce embarked on a slow strike which culminated in a seven day unprotected industrial action towards the end of the period. The workforce further participated in a one day national stay away. The estimated production loss as a result of the above was 3,000 PGM ounces. (Aquarius share: 1,500 PGM oz).
The surface stockpile (predominantly comprising oxidised material) decreased to 172,000 tons at the end of the period.
During the first six months, a total of 1,180,000 tons were processed, a 19% increase period on period.
The plant head grade averaged 3.02g/t for the first six months. Plant recoveries fell 8% to 64%, resulting in production of 72,944 PGM ounces, up 4% compared to the first six months to 2007.
Operating Cash Costs
Cash costs averaged R355 per ROM ton for the period. Cash costs per PGM ounce increased by 30% to R5,742 compared to the first six months to 2007. Cash costs in the second quarter, however, showed some improvement, reducing 18% to R5,203 per PGM ounce compared to the first quarter
Marikana: Operating Costs 4E (Pt+Pd+Rh+Au) 6E 6E net of by-products (Ni& (Pt+Pd+Rh+Ir+Ru+Au) Cu) Marikana R5,742 per PGM R4,765 per PGE ounce R 4,533 per PGE ounce ounce
Contractor dispute with Moolman Mining
AQPSA has received a response from Moolman Mining to AQPSA's answering affidavit in Moolman Mining's counter-application in the motion proceedings instituted by AQPSA. AQPSA's application is to stay the Arbitration proceedings instituted by Moolman Mining in the "rise and fall" formula dispute, pending the outcome of the action proceedings instituted by AQPSA against Moolman Mining to set aside the mining contract by reason of Moolman Mining's misrepresentation when the mining contract in question was originally concluded. The response has not changed AQPSA's view of the merits of the matter in any respect.
AQPSA has served a plea to Moolman Mining's counterclaim in the abovementioned action proceedings. AQPSA denies that any amounts whatsoever are owing to Moolman Mining because such claims arise either directly out of the mining contract or as a result of a finding that AQPSA was not entitled to rescind the mining contract. A finding that there was a misrepresentation at the instance of Moolman Mining will have the effect that none of the amounts in the counter-claim will be payable.
All pleadings in the matter are now closed and the legal teams will be meeting in the near future to discuss a time table and procedural issues for the hearing of the matter.
Everest Platinum MineSafety
The 12 month rolling average DIIR for the half year improved to 0.84 compared with 0.52 in the previous corresponding period.
Regrettably two fatalities occurred during the quarter. On Tuesday 23 October, Mr. Juao Jose Paulo, an Utility Vehicle Driver employed by the mining contractor, Shaft Sinkers Mining Ltd, was fatally injured in an accident resulting from being trapped between two vehicles on surface. On Saturday 24 November, Mr. Tete Tlali, a Rockdrill Operator employed by the mining contractor, Shaft Sinkers Mining Ltd, died following a fall of ground accident. The DME, together with AQPSA Management has conducted inquiries into both the accidents. The results of the enquiries are still pending.
Mining
The continuing ramp-up in underground ramp operations resulted in a 43% increase in production to 1,159,000 tons
Opencast production fell in line with plan to 135,000 tons
Head grade increased to 2.97 g/t
Processing
Total 1,266,000 tons processed
Significant improvement in recoveries to 79% reflecting increased underground to open pit production blend
Production ramps up to 95,560 PGM ounces
Revenue
The PGM basket price increased by 31% to $1,553 per PGM ounce compared to the ‚´ previous corresponding period. The strong increase in prices, combined with significantly higher volumes as the operation continues to ramp up resulted in revenues increasing 53% to of R995 million. The cash margin increased to 66%.
Operations
Operational ramp-up continued with opencast and underground producing a total 1,294,000 tons. Through the period, the production of underground to open pit ore shifted firmly in favour of the higher quality underground ore.
Underground production was affected by voluntary stoppages due to the fatal accidents, a two day unprotected work stoppage and a national one day protected stay-away. 2,000 PGM ounces were lost (Aquarius share: 2,000 PGM ounces), due to the voluntary closure of the mine as a result of the fatal accident on 24 November 2007. Complex geological ground conditions requiring additional support also adversely affected production on the northern side of the mine.
Concentrator throughput was 1,266,000 tons milled for the period. At the end of the period, the surface stockpile totalled 44,000 tons.
Metallurgical recoveries improved to 79% for the first six months compared with 72% in the previous corresponding period, reflecting the larger underground contribution in the feed blend.
Production for the first six months totalled 95,560 PGM ounces.
Operating Cash Costs
Cash costs for the period increased to R264 per ROM ton milled, Consequently, cash costs per PGM ounce for the period increased by 8% to 3,493 per PGM ounce. Encouragingly, cash costs for the second quarter decreased by 4% to R3,417 compared to the first quarter.
Everest Operating Costs
4E (Pt+Pd+Rh+Au) 6E 6E net of by-products (Ni& (Pt+Pd+Rh+Ir+Ru+Au) Cu)
Everest R 3,493* per PGM R 2,837 per PGE ounce R 2,651 per PGE ounce
ounce
*Included in the cash cost is R164 per PGM ounce due to IFRIC-4 (determining whether an arrangement contains a lease).
Mimosa Mine (Aquarius 50%)
Safety
The 12-month rolling average DIIR improved to 0.11 for the period.
Mining
Wedza Phase V Expansion Project 85% completed
Underground production increased to 971,000 tons
The surface stockpile increased by 36% to 418,000 tons at the end of the period
Processing
Tons processed increased 7% to 896,000 tons despite plant shutdowns
Average concentrator plant recoveries fell to 76%
Total mine production increased 3% to 78,032 (Aquarius attributable: 39,016 PGM ounces)
Revenue
The PGM basket price for the period averaged $1,074 per PGM ounce, a 13% increase compared to the first six months in the previous financial year. The nickel price over the period averaged 39% higher at $15.66 per pound and copper 2% higher at $3.46 per pound compared to the previous corresponding period. Base metals contributed approximately 35% of gross revenue. Sales revenue for the period was $107.3 million (Aquarius attributable: 50%), a 17% increase compared to the previous corresponding period. The cash margin was steady at 71%. In mid-December logistical problems with the movement of concentrate tons to South Africa resulted in 1,300 tons of concentrate with an approximate sales value of $6.0 million (US Dollars) being in transit at cut-off date. This revenue will therefore be apportioned to the third quarter and second half of the 2008 financial year.
Revenue in the second quarter was affected by a negative sales adjustment of $6 million as a result of the falling nickel price on the pipeline.
Operations
During the period mining operations hoisted 971,000 tons compared with 935,000 tons in the previous corresponding period. Tons milled during the quarter totalled 895,000 tons, with the surface stockpile at the end of the period 418,000 tons.
The average plant head grade for the period fell slightly to 3.57 g/t. The decline was attributable to low blasted grades in the month of October as a result of the effects of reduced mining width and dilution of ore whilst negotiating faults. Stringent controls on the mining width, optimisation of the mined slice and control of secondary blasting of oversize material have resulted in improvements in the feed grades.
Recoveries for the period were steady at 76.1%. Despite experiencing temporary plant shutdowns, due to power supply issues production for the period increased 3% to 78,032 PGM ounces (Aquarius attributable: 39,016 PGM ounces.
Operating Cash Costs
Cash costs for the period remained steady at $36 per ROM ton and increased by 5% to $414 per PGM ounce compares to the previous corresponding period. It should be noted, however, that cash costs for the second quarter decreased by 10% compared to the first quarter to $392 per PGM ounce. This was mainly due to high production throughput and mine wide stringent cost control measures during the second quarter.
Net of by-products, however, cash costs fell five-fold to -$110 per PGM ounce, a significant windfall, primarily due to the prevailing nickel prices.
Mimosa Operating Costs 4E (Pt+Pd+Rh+Au) 6E 4E net of by-products (Ni, Cu& (Pt+Pd+Rh+Ir+Ru+Au) Co) Mimosa $414 per PGM $394 per PGE ounce ($110) per PGE ounce ounce
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%)
Safety
The DIIR is zero. No lost-time accidents have occurred since the project commenced.
Processing
Feed processed doubles to 141,000 tons
Average recoveries for the period at 26%
5,496 PGM ounces produced (Aquarius attributable: 2,748 PGM ounces) a 54% increase compared with the previous corresponding period
Revenue
The PGM basket price for the period increased 17% to $1,874 per PGM ounce. The CTRP enjoys a high rhodium content hence the higher basket prices achieved. Higher volumes and the strong basket price resulted in revenues increasing 61% to R56 million (Aquarius attributable: 50%, and the cash margin widening from 78% to 81% compared to the previous corresponding period.
Operations
Feed increased from 70,000 to 141,000 tons. During the half year, a mill was installed ahead of the flotation plant resulting in an improved performance. The head grade over the first half averaged 4.8 g/t and recoveries at 26%. This resulted in production increasing by 54% to 5,496 PGM ounces produced (Aquarius attributable: 2,748 PGM ounces) compared with the previous corresponding period
Operating Costs
Cash costs decreased by 9% to R1,983 per PGM ounce due to higher volumes and the improved grade.
4E (Pt+Pd+Rh+Au) 6E (Pt+Pd+Rh+Ir+Ru+Au) 6E net of by-products
CTRP R 1,983 per PGM ounce R 1,388 per PGE ounce R 1,309 per PGE ounce
CORPORATE MATTERSShare Split Completed
On 5 December 2007, the shareholders of the Company at general meeting approved the subdivision of the issued capital of the Company on the basis that every one (1) fully paid common share be subdivided into three (3) fully paid common shares and that options on issue be adjusted in accordance with the Australian Stock Exchange Listing Rules, Aquarius
Following the share split there are 256,534,266 shares in issue and 3,059,061 unlisted options.
The new ISIN for shares on the Australian Securities Exchange, The London Stock Exchange and the JSE Limited is BMG0440M1284 and for the ADRs remains US03840M2089.
Bakgaga
Following the intersection of rock types resembling Merensky Reef (awaiting confirmatory assay) as reported in the first quarter, a complete geological review of the 2D seismic data relating to the relevant farms has been completed. The results of the drill hole data, coupled with two dimensional seismic interpretation are encouraging as to the presence of Merensky and UG2 reefs on the property.
It is proposed that ACS will now commit an amount of R13 million over the next two years to continue with further geological work, including completing of an aeromagnetic survey and drilling of up to five holes on the properties.
Post Period Event
Acquisition of 50% Interest in Platinum Mile Resources (Pty) Ltd
Aquarius Platinum announces that it has entered into a binding agreement for the acquisition of a 50% interest in Platinum Mile Resources (Pty) Ltd. The shareholding will be acquired from a consortium of private investors and Mvelaphanda Holdings (Pty) Ltd.
Platinum Mile operates a tailings re-treatment facility which is located in Rustenburg, North West Province. It is situated within RPM's Lease Area, adjacent to Kroondal.
The plant processes certain RPM mine tailings. The concentrates produced by Platinum Mile are combined and sold to RPM and RPM enjoys a profit share arrangement with Platinum Mile. The Platinum Mile plant currently produces approximately 20,000 ounces of PGM (4E) per annum and production ramp-up plans and technological innovations should see the production from the operation increase to above 35,000 ounces of PGM (4E) per annum. It is the strategic intent of the parties to grow the business and the parties will explore current in-house opportunities as well the acquisition of similar operations within the industry.
The consideration payable to the shareholders of Platinum Mile for 50% of the issued share capital amounts to R420 million. The payment comprises of R210 million in cash and R210 million in Aquarius Platinum shares, issued on the South African register, at a fixed price of R78.33 ( ¢â€°Ë† January 2008 VWAP).
Following completion of the transaction documentation, completion of conditions precedent and regulatory approvals, Aquarius and Mvelaphanda Holdings will have joint control of Platinum Mile. The company will become, where practicable, the exclusive vehicle for the development and operation of all tailings re-treatment opportunities identified by, or available to, the parties.
More information will be provided to shareholders following conclusion of this transaction, which is expected by the end of May 2008
More information on all the corporate matters can be found at www.aquariusplatinum.com
Statistics Kroondal P&SA1 Marikana P& Everest Mimosa CTRP SA2 6 6 6 6 6 6 6 6 6 6 Unit months months months months months months months months months months Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Safety Rate/ DIIR 200,000 0.44 0.93 0.33 0.43 0.84 0.52 0.11 0.47 0 0 man hrs Revenue Gross Millions 2,138 1,917 744 580 995 652 107.3 91 56 35 revenue PGM basket $/oz 1,586 1,299 1,559 1,276 1,553 1,188 1,074 949 1,874 1,606 Price Gross cash % 64 64 44 47 66 59 71 72 81 78 margin Nickel $/lb 13.47 14.11 13.47 14.11 13.47 14.11 15.66 11.27 13.47 14.11 Price Copper $/lb 3.38 3.35 3.38 3.35 3.38 3.35 3.46 3.40 3.38 3.35 Price Ave R/$ 6.93 7.23 6.93 7.23 6.93 7.23 - - 6.93 7.23 rate Cash Costs (On Mine) R/ton 245 204 355 312 264 212 - - 77 111 Per ROM ton $/ton 35 28 51 43 38 29 36 36 11 15 Per PGM R/oz 3,720 2,866 5,742 4,405 3,493 3,234 - - 1,983 2,172 (3E+Au) $/oz 536 396 828 609 504 447 414 395 286 300 Per PGE R/oz 3,063 2,359 4,765 3,623 2,837 2,735 - - 1,388 1,510 (5E+Au) $/oz 442 326 687 501 409 378 394 374 200 209 Capex
Current/ R'000s 175,639 124,651 35,238 25,507 24,614 71,190 - 5,533 - Sustaining
100% $'000s 25,331 17,241 5,082 3,528 3,550 9,846 3,371 5,123 798 -
Expansion R'000s - - 7,184 90,996 - 21,117 - - - 100% $'000s - - 1,036 12,586 - 2,921 9,573 1,453 - - Processed Tons
Underground ton 3,033 3,103 512 343 1,149 809 895 883 - -
'000s Open Pit ton 120 255 668 645 117 456 - - - - '000s Total ton 3,152 3,358 1,180 988 1,266 1,265 895 883 70 '000s 141 Grade
Plant Head g/t PGM 2.68 2.86 3.02 3.18 2.97 2.80 3.57 3.66 4.80 4.04
Recoveries % 77 77 64 69 79 72 76 78 26 48 PGM Production Platinum Ozs 124,586 143,761 45,829 42,215 56,787 46,954 39,641 38,423 3,423 2,155 Palladium Ozs 60,380 68,914 19,667 20,162 28,062 27,624 30,098 29,342 1,231 783 Rhodium Ozs 22,079 24,974 6,953 7,039 9,946 7,535 3,079 2,987 830 631 Gold Ozs 990 1,253 495 526 765 795 5,214 5,326 12 7 Total PGM Ozs 208,035 238,902 72,944 69,941 95,560 82,908 78,032 76,078 5,496 3,576 (3E+Au) Iridium Ozs 8,570 9,726 3,093 2,715 3,911 2,698 2,708 2,905 417 317 Ruthenium Ozs 36,065 41,594 11,874 12,383 18,183 12,441 1,395 1,476 1,936 1,250 Total PGE Ozs 252,670 290,222 87,911 85,040 117,654 98,047 82,135 80,459 7,849 5,143 (5E+Au) Base Metal Production Nickel Tons 208 230 113 121 149 113 1,078 1,023 8 2 Copper Tons 93 100 62 65 72 57 888 852 3 4 Chromite Tons 164 197 80 57 - - 32 31 - - (000) '000s Aquarius Platinum LimitedIncorporated in BermudaExempt company number 26290Board of Directors
Nicholas 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 SibleyNomination Committee
The full Board comprises the Nomination Committee
Company SecretaryWilli BoehmAQPSA Management
Stuart Murray - Executive Chairman
Anton Wheeler - Managing Director
Ayanda Khumalo - Financial Director
Graham Ferreira - General Manager Group Admin & Company Secretary
Rudi Rudolph - General Manager Kroondal
Wessel Phumo - General Manager Marikana
Jacques Pretorius - General Manager Everest
Gordon Ramsay - General Manager Metallurgy
Hugo HĦll - General Manager Projects & Transformation
Gabriel de Wet - General Manager Engineering
Willie Byleveld - General Manager Technical Services
Mimosa Mine Management
Winston Chitando - Managing Director
Herbert Mashanyare - Technical Director
Peter Chimboza - Operations Director
Issued Capital
At 31 December 2007, the Company had in issue:
256,534,266 fully paid common shares and 3,059,061 unlisted options
Substantial Shareholders 31 December 2007 Number of Shares Percentage
Impala Platinum Holdings Ltd 21,381,828 8.33 Nutraco Nominees Limited 17,009,579 6.63 Trading Information
ISIN number remains unchanged following the share split 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
54% Owned
(Incorporated in the Republic of South Africa)
Registration Number 2000/000341/07
Block A, 1st Floor, The Great Wall Group Building, 5 Skeen Boulevard, Bedfordview, South Africa 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]$ Australian Dollar Aquarius Aquarius Platinum Limited ABET Adult Basic Education Training programme APS Aquarius Platinum Corporate Services Pty Ltd AQPSA Aquarius Platinum (South Africa) Pty Ltd
ACS(SA) Aquarius Platinum (SA) (Corporate Services) (Pty) Limited
CTRP Chromite Ore Tailings Retreatment Operation DIFR Disabling Injury Incidence Rate - being the number of lost-time injuries expressed as a rate per 1,000,000 man-hours worked DIIR Disabling Injury Incidence Rate - being the number of lost-time injuries expressed as a rate per 200,000 man-hours worked DME South African Government Department of Minerals and Energy Affairs Dollar United States Dollar or $ EMPR Environmental Management Programme Report Everest Everest Platinum Mine Great A PGE bearing layer within the Great Dyke Complex in Zimbabwe Dyke Reef g/t Grams per tonne, measurement unit of grade (1g/t = 1 part per million) JORC Australasian code for reporting of Mineral Resources and Ore code Reserves JSE JSE Securities Exchange South Africa Kroondal Kroondal Platinum Mine or P&SA1 at Kroondal LHD Load Haul Dump machine Marikana Marikana Platinum Mine or P&SA2 at Marikana Mimosa Mimosa Mining Company (Private) Limited MRC Murray & Roberts Cementation NOSA National Occupational Safety Association NUM South African National Union of Mineworkers PGE(s) Platinum Group Elements plus Gold. Five metallic elements (6E) commonly found together which constitute the platinoids (excluding Os (osmium)). These are Pt (platinum), Pd (palladium),Rh (rhodium), Ru (ruthenium), Ir (iridium) plus Au (gold) PGM(s) Platinum Group Metals plus Gold. Aquarius reports the PGMs as(4E) comprising Pt+Pd+Rh plus Au (gold) with the Pt, Pd and Rh being the most economic platinoids in the UG2 Reef P&SA1 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Kroondal P&SA2 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Marikana R South African Rand RK1 Consortium comprising Aquarius Platinum (SA) (Corporate Services) (Pty) Limited (ASACS), Ivanhoe Nickel and Platinum Limited and Sylvania South Africa (Pty) Ltd (SLVSA). ROM Run of Mine. The ore from mining which is fed to the concentrator plant. This is usually a mixture of UG2 ore and waste. RPM Rustenburg Platinum Mines Limited SavCon The Savannah Consortium. The principal Black Empowerment Investor in Aquarius Platinum TKO TKO Investment Holdings Limited Ton 1 Metric tonne (1,000kg)
UG2 Reef A PGE bearing chromite layer within the Critical Zone of the
Bushveld Complex Z$ Zimbabwe Dollar
For further information please contact:
In Australia:Willi Boehm+61 (0)8 9367 5211
In the United Kingdom and South Africa
Nick Bias+ 44 (0)7887 920 [email protected]
AQUARIUS PLATINUM LIMITEDRelated Shares:
AQP.L