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Production Results to 30 June 2012

23rd Jul 2012 07:02

Fourth Quarter 2012 Aquarius Platinum Limited

Aquarius Platinum Limited Production Results to 30 June 2012 Highlights

Average PGM Dollar prices decreased in Q4 - platinum and palladium fell 6% and 8% respectively while rhodium fell 9%

The Rand weakened against the US Dollar by 5% on average quarter-on-quarter

Attributable production for the fourth quarter increased slightly quarter-on-quarter to 98,143 4E ounces

Stronger production from Kroondal compared to the previous quarter

Marikana and Everest mines placed on care and maintenance during the quarter

Intermittent unlawful industrial action impacting Kroondal's Kwezi Shaft inJuly Q4 2012 Operating Results Summary Kroondal Marikana Everest Mimosa CTRP Plat. Mile 4E PGM Production Total (100% basis) 82,212 21,533 15,281 54,588 1,732 2,830 Attributable 41,106 10,766 15,281 27,294 866 2,830 4E Basket Price R/oz 9,799 9,977 9,811 - 9,982 9,423 $/oz 1,218 1,240 1,219 1,239 1,240 1,159 Cash Costs (4E basis) R/oz 9,160 10,842 15,657 - 6,106 6,188 $/oz 1,138 1,347 1,945 740 758 761 Cash Margin (%) -24 -49 -99 51 20 20 Stay-in-Business Capex R/oz 1,118 1,162 1,419 - - - $/oz 139 144 176 269 - -

Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said:

"The overall production figure for the fourth quarter was marginally better than that recorded in the prior period. Although this is a positive result, it includes the impact of winding down and suspending operations at Marikana and Everest, and as a result obscures the more material improvement in production volumes from Kroondal. We are confident that the new operational configuration of AQPSA will enable the Company to withstand the continuing downturn, and we expect that production from Kroondal will continue to improve, complemented as always by robust production from Mimosa and the modest margin contribution from our tailings operations. Our cash reserves of US$180 million at 30 June provide us with sufficient funds to manage our operating mines over the next twelve months. The Everest Extension (Buttonshope) acquisition remains outstanding pending completion of various conditions precedent - the funding of this asset acquisition will be considered if and when the need arises.

Unfortunately, as has been well flagged by many industry participants, the likelihood of industrial action over the South African winter is high, largely as a result of inter-union rivalries. Aquarius is by no means immune to this threat, and intermittent unlawful industrial action has occurred at one of Kroondal's four shafts in July. We are working hard to resolve this in order to return to uninterrupted production as soon as possible."

Production by mine Quarter ended PGMs (4E) June 2012 Mar 2012 % Change June 2011 % Change Kroondal 82,212 76,935 7 89,196 -8 Marikana 21,533 26,405 -18 21,411 1 Everest 15,281 15,926 -4 26,954 -43 Blue Ridge - - - 3,021 - Mimosa 54,588 52,053 5 55,605 -2 CTRP 1,732 1,413 23 685 153 Platinum Mile 2,830 3,474 -19 4,694 -40 Total 178,176 176,206 1 201,566 -12

Production by mine attributable to Aquarius

Quarter ended PGMs (4E) June 2012 Mar 2012 % Change June 2011 % Change Kroondal 41,106 38,467 7 44,598 -8 Marikana 10,766 13,203 -18 10,705 1 Everest 15,281 15,926 -4 26,954 -43 Blue Ridge - - - 1,510 - Mimosa 27,294 26,026 5 27,803 -2 CTRP 866 706 23 343 152 Platinum Mile 2,830 3,474 -19 2,347 21 Total 98,143 97,802 0 114,260 -14

Aquarius Group attributable production (PGM ounces) to 30 June 2012

[For graph see www.aquariusplatinum.com]

Market Summary

Metals prices

The prices of all of the PGMs declined relatively uniformly over the quarter under review, becoming more volatile in June. Prices continue to be driven lower by poor investor sentiment on the back of the European economic malaise and evidence of slowing growth in China. These macroeconomic factors are exacerbated by the market's well-placed doubt that the major platinum producers will cut supply meaningfully. Prices continued to be set largely by ETF inflows and outflows rather than fundamental industrial demand, and surpluses across the entire suite of metals remain in the system at present.

The average platinum price declined by 6%, while palladium and rhodium prices fell broadly in line quarter-on-quarter, by 8% and 9% respectively. Gold fell by 5% on average. Platinum closed the quarter down 13% at $1,428 per ounce, while palladium fell by 12% to $578 per ounce and rhodium by 11% to $1,250 over the same period. Gold fell 5% to $1,577 per ounce.

Rand-Dollar exchange rate

The average Rand-Dollar exchange rate weakened during the quarter, falling by 5% from R7.76 to R8.12 to the US dollar, largely tracking Euro weakness. The Rand closed the quarter 8% weaker at R8.24 to the Dollar.

The average Rand basket price fell by 5% quarter-on-quarter, and the spot price by 5% over the period. The US Dollar weighted average group basket price decreased by 5% to $1,225 per 4E PGM ounce compared to the previous quarter.The average South African basket price at AQPSA's operations was R9,843 per PGM ounce for the period.

12-month individual PGM prices to June 12-month PGM basket prices to June

2012 2012 (US$/oz) (US$ and ZAR per PGM basket ounce)

[For graph see www.aquariusplatinum.com]

12-month Rand-Dollar exchange rate to June 2012

(ZAR/US$)

[For graph see www.aquariusplatinum.com]

Average PGM basket prices achieved at Aquarius operations

Quarter ended US$ per PGM ounce (4E) Jun 2012 Mar 2012 % Change Jun 2011 % Change Kroondal 1,218 1,321 -8 1,519 -20 Marikana 1,240 1,330 -7 1,523 -19 Everest 1,219 1,311 -7 1,484 -18 Blue Ridge - - - 1,511 - Mimosa 1,239 1,199 3 1,392 -11 CTRP 1,240 1,425 -13 1,636 -24 Platinum Mile 1,159 1,338 -13 1,487 -22 Weighted Avg. 1,225 1,289 -5 1,480 -17

Operating Review Summary (all numbers on 100% basis)

AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum - 100%)

P&SA 1 at Kroondal (Aquarius Platinum - 50%)

12-month rolling average DIIR deteriorated to 1.20 per 200,000 man hours from 1.08 in the previous quarter

Production increased to 1,374,000 tonnes

Head grade deteriorated from 2.39 g/t to 2.38 g/t

Recoveries improved by 2%

Volumes processed increased to 1,356,000 tonnes

Stockpiles at the end of the quarter totalled approximately 37,000 tonnes

PGM production increased by 7% to 82,212 PGM ounces

Revenue deteriorated by 20% to R605 million quarter-on-quarter due to lower basket prices and the resulting negative sales adjustment

Mining cash costs increased by 3% to R555 per tonne, and costs per PGM ounce by 2% to R9,160

Kroondal's cash margin for the period deteriorated from 9% to -24%

P&SA2 at Marikana (Aquarius Platinum - 50%)

12-month rolling average DIIR improved to 0.47 per 200,000 man hours from 0.50 in the previous quarter

Production decreased by 36% to 316,000 tonnes

Head grade increased by 14% to 2.51 g/t

Recoveries increased by 9% to 81%

Volumes processed decreased by 34% to 330,000 tonnes

PGM production decreased by 18% to 21,533 ounces

Revenue decreased by 41% to R156 million quarter-on-quarter, due to lower production as well as lower basket prices and the resulting negative sales adjustment

Mining cash costs increased by 28% to R708 per tonne, and costs per PGM ounce by 3% to R10,842

Marikana's cash margin deteriorated from -5% to -49%

Everest Mine (Aquarius Platinum - 100%)

12 month rolling DIIR deteriorated to 2.24 per 200,000 man hours from 2.01 in the previous quarter

Production decreased by 12% to 269,000 tonnes

Head grade improved from 2.10 g/t to 2.16 g/t

Recoveries remained stable at 79%

Volumes processed decreased by 7% to 278,000 tonnes

PGM production decreased by 4% to 15,281 PGM ounces

Revenue decreased by 29% compared to the previous quarter to R120 million

Mining cash costs increased by 19% to R861 per tonne, and costs per PGM ounce increased by 16% to R15,657

Everest's cash margin deteriorated from -27% to -99%

Commentary

Kroondal: Production at Kroondal improved over the quarter under review, but remained disrupted by the current hangingwall support regime. Plans were put in place to rectify this issue after the quarter end, as disclosed in the operational update on 4 July. Production at Kroondal is expected to trend back towards full capacity by the end of the calendar year.

Unlawful strike action has occurred intermittently at Kroondal's Kwezi Shaft during July, accompanied by incidents of intimidation and violence as a result of the continuing tensions between rival mining unions on the Western Limb of the Bushveld. Kwezi Shaft accounts for approximately 25% of Kroondal's production and to date approximately 100,000 tonnes have been lost in the July production month. AQPSA is in the process of obtaining a second court order to end the strike and dismiss the instigators.

Marikana: As disclosed during the quarter, the remaining shaft (No. 4 Shaft) and the processing plant at Marikana have been placed on care and maintenance until further notice, as a result of the current low Rand basket prices.

Everest: As disclosed during the quarter, the Everest mine has been placed on care and maintenance until further notice, as a result of the current low Rand basket prices, temporary geological problems and unstable labour relations.

AQPSA Operating costs per ounce

4E 6E 6E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu) Kroondal 9,160 7,520 7,391 Marikana 10,842 8,887 8,663 Everest 15,657 12,875 12,418 Capital expenditure Kroondal Marikana Everest

(R'000 unless otherwise stated) Total Per 4E oz Total Per 4E oz Total Per 4E oz

Ongoing Infrastructure Establishment 52,011 633 25,023 1,162 18,837 1,233

Project Capital 39,902 485 - - 2,840 186 Mobile Equipment 64,623 786 (31,297) (1,453) - - Total 156,536 1,904 (6,274) (291) 21,676 1,419

The Company continues to develop the K6 shaft at Kroondal and conduct design and drill work at Everest. Almost all other project and growth capital expenditure has been placed on hold pending improved market conditions. The Company continues to keep the maintenance capital expenditure required by its operating mines up to date.

The Mobile Equipment Capital is being financed through a lease agreement over the life of the equipment.

MIMOSA INVESTMENTS (Aquarius Platinum - 50%)

Mimosa Platinum Mine

12-month rolling average DIIR deteriorated to 0.25 per 200,000 man hours

Production decreased slightly by 0.14% to 539,446 tonnes

Head grade was almost static at 3.66 g/t

Recoveries improved to 77.26%

Volumes processed increased by 4% to 599,584 tonnes

Stockpiles at the end of the quarter totalled approximately 84,372 tonnes

PGM production increased by 5% to 54,588 PGM ounces

Revenue increased by 37% to US$81 million due to higher metal sales and prices achieved during the quarter

Mining cash costs decreased by 6% to US$67 per tonne, and costs per PGM ounce by 7% to $740

Stay-in-business capital expenditure was $269 per PGM ounce for the quarter

Mimosa's cash margin for the period rose from 31% to 50% due to higher sales revenue

Commentary

The Mimosa mine continues to operate well. Discussions are ongoing with various regulatory bodies in relation to the indigenisation process as well as the increased mining fees and royalties. There have been no material developments since the date of the Company's last disclosure. Following the agreement between Mimosa and ZESA (the power utility company) reached in late March guaranteeing uninterrupted power supply of 20MW for the next five years, Mimosa has experienced no issues with electricity supply. Quarterly meetings are being held with ZESA senior management to discuss potential power disruptions and ways to improve reliability of power supply.

Operating cash costs per ounce

Unit cash costs per PGM ounce (before by-product credits) were 7% lower than those achieved in the previous quarter mainly due to higher metal production and stringent cost control measures.

4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu & Co) Mimosa 740 700 392 Capital Expenditure

The total capital expenditure for the fourth quarter increased from $12.0 million in the third quarter to $15.2 million, mainly due to housing projects.

TAILINGS OPERATIONS

Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum - 50%)

Material processed decreased 9% to 82,000 tonnes

Head grade increased to 2.91 g/t

Recoveries increased from 18% to 22%

Production increased to 1,732 PGM ounces

Cash costs decreased by 3% to R6,106 per PGM ounce

Revenue was R13 million for the quarter

CTRP's cash margin for the period was 20%, a decrease from 25% in the previous quarter

Platinum Mile (Aquarius Platinum - 91.7%)

Material processed increased 21% to 1,225 million tonnes

Head grade marginally increased to 0.54 g/t

Recoveries decreased to 13%

Production decreased to 2,830 PGM ounces

Cash costs increased marginally to R6,188 per PGM ounce

Revenue was R19 million for the quarter

The cash margin for the period was 20%, a decrease from 25% in the previous quarter

Commentary

CTRP: A project to install a thickener at the plant has been started. This should result in finer material being presented to the fine grind mill to improve recoveries. Metallurgical test work on the effects of grinding on recoveries has been completed and the results are due to be presented to the Management Board for approval.

Platinum Mile: During the quarter three used coarse grinding mills were purchased from Anglo Platinum for R10 million. The civil and electrical design work has commenced and these mills should come into operation in February 2013. The coarse grinding circuit should yield an additional 480 ounces per month and the total capital cost for this expansion is expected to be around R20 million. The timing of treating Kroondal tailings at the operation is being revisited in the current difficult economic climate. Different processing and funding alternatives are being evaluated.

Operating cash costs per ounce

4E 6E 4E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni, Cu& Co) CTRP 6,106 5,849 5,750 Platinum Mile 6,188 5,334 4,763

Statistical Information: Kroondal P&SA1