27th Oct 2005 09:49
AQUARIUS PLATINUM LIMITEDQUARTERLY REPORT 30 SEPTEMBER 2005ROBUST production profile, coupled with rising pgm pricesdelivers strong profit results * Quarterly cash profit climbs strongly to $17.7 million, resulting in a net profit of $9.9 million * Record group attributable production: 103,869 PGM ounces, marginally up from the last quarter * Expansion projects on track * Cold commissioning commenced at the new Everest Mine * New senior debt facility in place Highlights of the QuarterKroondal (PSA1) * Expanded operation produced 115,362 PGM ounces (Aquarius attributable 57,681 PGM ounces) * Underground operations produced a record 1.59 million tons * New No. 4 decline on schedule * Underground production ramp up on schedule to 540,000 tons per month by December 2005 Marikana * Production increased marginally to 27,322 PGM ounces * Operating cash margin of 8% for the quarter, Mine reports a net profit in September month * Trial underground mining continues, reporting favourable mining conditions * Marikana P&SA2 (signed with Anglo Platinum in July 2005) approvals in process Mimosa * Production increased to a record 36,368 PGM ounces (Aquarius attributable 18,184 PGM ounces) * Wedza Phase IV upgrade commenced * Cash costs decreased 7% to $361 per PGM ounce and to $106 per PGM ounce after by-product credits * Currency devaluation restores margins, new monetary policy issued in October Everest * Construction activities proceed on schedule and within budget * Ore stockpile at 220,000 tons * Cold commissioning of the plant has commenced * Hot commissioning in December 2005, ahead of schedule CTRP * Production disappoints due to problems feeding dump material into circuits, with lower than anticipated recoveries on certain feeds * Alternative process equipment to be fitted during the second quarter to improve throughput and recovery Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said,"Aquarius has worked hard, and I am encouraged to see that our efforts toexpand production and enhance efficiencies at all our operations are finallyresulting in significant improvements to the bottom line. The results of thisquarter are set to continue going forward, and I am confident this will be agood year for shareholders."Production by MinePGMs (4E) Quarter Ended Dec 2004 Mar 2005 Jun 2005 Sept 2005 Kroondal 71,523 69,051 116,669 115,362 Marikana 24,019 26,509 26,940 27,322 Mimosa 30,386 33,529 35,644 36,368 CTRP - 644 1,473 1,363 Total 125,928 129,733 180,726 180,415Production by Mine Attributable to AquariusPGMs (4E) Quarter Ended Dec 2004 Mar 2005 Jun 2005 Sep 2005 Kroondal 35,761 34,526 58,335 57,681 Marikana 24,019 26,509 26,940 27,322 Mimosa 15,193 16,765 17,822 18,184 CTRP - 322 737 682 Total 74,973 78,122 103,834 103,869Aquarius announces consolidated earnings for the quarter to 30 September 2005of $9.9 million (US 11.9 cents per share) as the Group's expansion programcontinues to deliver increased profits. Cash earnings (before depreciation andamortisation) were $17.7 million.Aquarius Attributable Production and Net Profit Summary Qtr Mar 2005 Qtr June 2005 Qtr Sept 2005 PGM Production (attributable ounces) 78,122 103,834 103,869 Net Profit After Tax & Outside Equity $6.0 m $8.9 m $9.9 mInterests Production of PGMs attributable to shareholders of Aquarius was 103,869 PGMounces, up slightly from the previous quarter ended June 2005, with all minesachieving consistent performance.Revenue for the quarter, net of currency adjustments, was $78.7 million. Netfinance charges for the quarter were $0.6 million comprising interest expenseof $1.6 million, offset by interest income of $1.0 million.Depreciation was higher at $5.8 million due to capital expenditure on thedevelopments and expansions at Kroondal and Marikana. Amortisation arising fromthe fair value uplift of mineral rights at $2.0 million reflects increasedproduction.Aquarius Group cash balances at 30 September 2005 were $102.6 million, anincrease of $27.3 million. Material items other than mine operations thataffected cash balances during the quarter included a redraw from the debtfacility of $25.3 million and capital expenditure of $32.1 million.Over the quarter, the US Dollar was on average 3% stronger against the Rand atan average exchange rate of R6.52 to the US Dollar. This coupled with increasedproduction and higher US dollar PGM basket prices achieved during the quarterall contributed to the improved quarterly profit performance.Kroondal's mining cash costs, excluding development costs for the quarterincreased marginally. Costs per ROM ton increased 5.1% to R155. Costs per PGMounce increased 3.1% to R2,012. Reported cash costs, however, on a per ROM tonbasis increased by 11% to R181 compared to the previous quarter and cash costper PGM ounce increased by 13% to R2,489 per PGM ounce. The increase isattributed to a 73% increase in development cost to ensure the productionbuild-up to 540,000 tons/month, and higher than normal escalation charges,impacted by higher fuel prices and annual wage increases.Marikana returned a gross margin of 8% despite cash costs being impacted bysome "one-off" costs. These "one-off" costs involved additional stripping dueto the unanticipated change in location of Pit A reef sub-outcrop as well asthe removal of clay layers found in Pit A as a contingency against heavyrainfall. Cash costs were R280 per ROM and R4,268 per PGM ounce.Operating costs at the Mimosa Mine decreased 7% to $358 per PGM ounce, and $106per PGM ounce after by-product credits. This decrease in cash costs ispredominantly attributed to a devaluation of the Zimbabwean currency toZ$26,002 to the Dollar.Foreign ExchangeRandOver the quarter, despite the Rand weakening on average, the spot rates for theRand strengthened marginally to close the quarter at R6.36 to the Dollar,having started the quarter at R6.52 to the Dollar.Zimbabwe DollarThe Zimbabwean dollar devalued to Z$26,002 to the Dollar during the quarter.This largely compensated for the abolition of the FOB export credit and costinflation.Metals PricesThe value of the basket continued to rise during the quarter to close at R5,721per PGM ounce. This represents a 40% increase since January 2005 when thebasket price was below R4,000 per PGM ounce. Encouragingly, this upward movehas continued into the current quarter, having at one point already brokenthrough R 6,000 per PGM ounce.The platinum price closed for the quarter at a twenty-five year high of $929per ounce, having risen 14% since January 2005. The rhodium price wasparticularly strong, increasing by 43% to $2,740 per from $1,920 per ounce inthe previous quarter . Palladium also demonstrated positive gains, increasing7% to $194 per PGM ounce from $181 per PGM ounce.The basket price for the operations in South Africa improved from R4,716 ($746)to R5,262 ($807) at AQPSA, due to a strong rise in the rhodium price.Significantly the South African basket price broke through R6,000 per PGM ouncenear the quarter's end.The basket price for the operations in Zimbabwe improved from $603 to $614, dueto the improvement in the platinum price. Mimosa mine in Zimbabwe producessignificant nickel/copper as a by-product, contributing approximately 30% ofMimosa's revenue. Base metal prices remained strong during the quarter, withnickel falling back lightly from recent highs to $6.92 per pound and coppercontinuing to advance, increasing 3% to $1.50 per pound, since the previousquarter.Aquarius Platinum LimitedConsolidated Income StatementQuarter ended 30 September 2005US$'000 Quarter Quarter Financial ended* ended year ended 30/09/05 30/09/04 30/06/05 Aquarius PGM Production (attributable 103,869 67,486 327,669ounces) Note Revenue (i) 80,992 45,591 222,327 Forex sales adjustments (ii) (2,325) (363) 2,797 Total revenue 78,667 45,228 225,124 Cost of sales (iii) (55,859) (42,749) (174,936) Gross profit 22,808 2,479 50,188 Amortisation of fair value uplift of (1,958) (941) (6,745)mineral properties Gross profit after amortisation of fair 20,850 1,538 43,443value uplift Admin & other costs (1,144) (1,173) (5,976) Finance costs (iv) (1,644) (2,113) 484 FX movements (v) (480) 1,963 (9,889) Profit before tax 17,582 215 28,062 Income tax expense (3,940) (1,306) (3,446) Profit after tax 13,642 (1,091) 24,616 Minority interest (vi) (3,780) 1,136 (3,666) Net profit for the period 9,862 45 20,950 Earnings per share (basic - cents) 11.9 0.05 25.3* UnauditedNotes on the Consolidated Income Statement i. Revenue is up 78% from the previous corresponding quarter due to increased production and higher PGM prices ii. Reflects effects of adjusting revenue recorded at time of production to cash received at the end of the four month pipeline iii. Cost of sales on a per PGM ounce basis are lower from the previous corresponding quarter due to increased level of low cost ounces from Kroondal production iv. Finance costs reflect interest expense on Group interest bearing borrowings v. Reflects foreign exchange movements on translation of net monetary assets vi. Minority interests reflects 29.5% and 20% outside equity interest of Savannah Consortium and Impala Platinum Holdings Limited (Implats) in AQPSA Aquarius Platinum LimitedConsolidated Cash Flow StatementQuarter ended 30 September 2005US$'000 Quarter Financial year ended * ended 30/09/05 30/06/05 Note Net operating cash inflow (i) 31,264 31,458 Net investing cash outflow (ii) (32,103) (88,152) Net financing cash inflow (iii) 25,923 54,921 Net increase (decrease) in cash held 25,084 (1,773) Opening cash balance 75,251 77,942 Exchange rate movement on cash 2,297 (918) Closing cash balance 102,632 75,251* UnauditedNotes on the Consolidated Cash Flow Statement i. Net operating cash flow includes $31.1 million net inflow from operations, $0.9 million net finance costs and $0.9 million income tax payments ii. Reflects payments for mine construction costs of $32.1 million, relating mainly to the new Everest operation iii. Reflects proceeds from redraw of finance facilities of $25.3 million, conversion of options $0.4 million and repayment of share plan loans $0.1 million Aquarius Platinum LimitedConsolidated Balance Sheetat 30 September 2005US$'000 Quarter Financial year ended * ended Note 30/09/05 30/06/05 Assets Cash assets (i) 102,632 75,251 Current receivables (ii) 42,548 44,695 Other current assets (iii) 19,732 16,312 Non-current receivables (iv) 2,735 2,928 Mining assets (v) 444,645 408,765 Other non-current assets 1,106 541 Total Assets 613,398 548,492 Liabilities Current liabilities (vi) 39,615 35,480 Non-current payables (vii) 157,738 150,735 Non-current interest-bearing (viii) 45,028 16,037liabilities Other non-current liabilities (ix) 82,353 78,315 Total Liabilities 324,734 280,567 Net Assets 288,664 267,925 Equity Parent entity interest 250,479 235,352 Minority interest 38,185 32,573 Total Equity 288,664 267,925* UnauditedNotes on the Consolidated Balance Sheet i. Cash balance is up due to redraw on finance facilities, $25 million during the quarter ii. Reflects debtors receivable on PGM concentrate sales iii. Increase reflects stockpile build up to accommodate the P&SA expansion. iv. Reflects employee share plan loans v. Increase in mining assets mainly relates to Everest construction vi. Includes tax payable ($12 million) and creditors ($28 million) vii. Reflects deferred income from BEE transaction ($10.6 million) and portion of Implats and Savcon non interest bearing shareholder loans ($148.5 million) viii. Reflects non-current portion of Investec debt and Savcon interest bearing shareholder loan ix. Reflects deferred tax liabilities $56 million, provision for closure costs $26 million AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 50.5%)Kroondal Platinum MineSafetyThe DIIR for the quarter was unchanged from the previous quarter at 0.65. The12 month rolling DIIR has improved to 0.67, reflecting the improved longer-termsafety performance.Mining * P&SA expansion nears completion, underground operations produced a record 1.59 million tons * New No. 4 decline is on schedule * Underground production is on schedule for ramping up to 540,000 tons per month by December 2005 Kroondal: Metal in concentrate produced (PGM ounces)Quarter ended Pt Pd Rh Au PGMs (4E) PGMs (4E) attributable to Aquarius Sep-05 69,129 33,420 12,250 563 115,362 57,681 Jun 05 69,875 33,728 12,499 567 116,669 58,335 Mar 05 41,366 19,971 7,408 306 69,051 34,526 Dec 04 42,659 20,815 7,723 326 71,523 35,761Processing * DMS feed increased by 1.0% to 1.59 million tons * Production decreased by 1.1% to 115,362 PGM ounces * Overall recovery increased by 1.3% to 78.3% OperationsOperations produced 1,583,000 tons from underground and 125,000 tons fromopencast mining.Development and equipping of additional underground mining areas continued atthe Central, East and No. 3 decline shafts. In addition, underground mining atthe new No. 4 decline shaft continues on schedule.In total, 1,265 metres of development were completed during the quarter.The increase in mining area as a result of down-dip development as part of theP&SA project has had a marked positive effect on production, with an average of2.2km of dip face length mined every month.Surface stockpiles were depleted due to the early completion of the K2concentrator and the rapid tonnage build-up during the ramp-up phase.The head grade to the plant reduced marginally to 2.88g/t from 2.99g/t in theprevious quarter. This was due to development material from underground and alower in-situ grade of the surface stockpile material.PGM Production decreased slightly by 1.1% to 115,362 4PGE ounces for thequarter (Aquarius attributable 57,681 PGM ounces, largely as a result of thelower than expected head grades at number 3 shaft and significant developmenttonnages.It is anticipated that total underground mining production will reachsustainable steady state production of 540,000 tons per month by December 2005.Remaining work on the P&SA expansion, notably the surface and undergroundinfrastructure at the No 4 decline shaft, is scheduled for completion byDecember 2005.Both plants (K1 and K2) continued to perform well, with recoveries improving by1.3% overall. The plants processed 1,590,000 tons during the quarter at 77% and79% recovery respectively for K1 and K2 concentrators. Recoveries, thoughbetter by 1.3 % than the previous quarter, were affected by reduced head gradeand the processing of open cast tons.K1 plant continued to perform above design capacity of 250,000 tons permonthand strong improvements in grind were achieved following a complete relineof the ball mill during July 2005.The K2 plant continued to perform at above designed tonnage capacity withrecoveries improving from 76% during commissioning to 79% during the quarter.This improvement is attributed to optimisation of the DMS plant, fines handlingcircuit, and primary mill grinding. The K2 spiral plant has also beencommissioned and is producing on-specification chrome.Mining cash costs, excluding development costs for the quarter increasedmarginally by 5.1% to R155 per ROM ton and by 3.1% to R2,012 per PGM ounce.Reported cash costs, however, on a per ROM ton basis increased by 11% to R181compared to the previous quarter and cash cost per PGM ounce increased by 13%to R2,489 per PGM ounce. The high cost increases can be attributed to a 73%increase in development cost to ensure the production build-up to 540,000 tpmis achieved, and higher escalation charges, impacted by annual wage increasesand high fuel prices.The PGM basket price increased quarter on quarter by 9% from $745 per PGM oz to$813 PGM oz at an average ZAR / US$ exchange rate of R6.52.P&SA1 PROJECTThe P&SA expansion works continued well and are nearing completion. Allconveyor installations are complete, with electrical installations nearingcompletion. At the new No.4 Shaft, the materials handling system (silo, silotruck load-out facility, silo feed belt, transfer station, decline belt andunderground decline tip) was completed to schedule. .The final capital cost is expected well below budget. The figures presentedbelow include mining, plant and infrastructure portions of the project. Theestimated final cost is R689.2 million (100% basis), R132.5 million below theescalated budget largely due to deferment into future ongoing capital. R587.2million has been paid to date.Environmental ManagementEnvironmental management at Kroondal continues to be a fundamental element ofthe day to day operations.Minimising dust pollution from tailings dams is a considerable challenge forall mining operations in the region. Following numerous trials on differentmethods of dust suppression on the K1 tailings dam, an overhead water sprayingsystem was installed. The system was commissioned on 1 September 2005 withexcellent results, and will now be rolled out to the remaining two tailingsdams. This is an industry first that third parties, including government areobserving with interest.During the quarter, specific attention was also given to: * Environmental management of all contractors at Kroondal * Community/Stakeholder liaison in terms of dust management and rehabilitation * Water management Marikana Platinum MineSafety¢â‚¬¢ Two lost time injuries were reported for the quarter. The 12 month rollingDIIR reduced slightly from 0.81 to 0.80 for the current quarter. The FY06 DIIRrate stands at 0.57 for the quarter.Mining¢â‚¬¢ Both opencast mining contractors delivered against revised mining schedules.¢â‚¬¢ Stockpiles at the end of the quarter totalled 66,000 ROM tons.¢â‚¬¢ Trial underground mining has extended some 60m down dip of the portals.Processing¢â‚¬¢ 417,043 ROM tons were processed during the period, an increase of 3% on theprevious quarter.¢â‚¬¢ Concentrator plant recoveries for the period were 62% overall and in linewith expectations despite high variability in the feed.¢â‚¬¢ A record 27,322 PGM ounces were produced.¢â‚¬¢ End of quarter ROM stockpiles contain an estimated recoverable 2,900 PGMounces.OperationsPGM production increased quarter-on-quarter by 1.4% to a new record of 27,322PGM ounces.Marikana made a modest 8% cash margin for the quarter, and realized a modestnet operating profit in September 2005 for the first time since commencement ofoperations.Cash cost for the quarter was R280 per ROM ton and R4,268 per PGM ounce.Increases on the previous quarter are 17% and 19% respectively.The increase in cash costs is largely attributed to the two new pits, pit "A"and "SW"; currently being opened up to sustain production. These had a negativeimpact on mining rates and costs. Oxidized reef from Pit A extended anapproximate 15m deeper than expected. Hence the ratio of oxidized to fresh reefratio was higher than planned which impacted negatively on recovery, but moreimportantly, on planned plant throughput. Due to the clay-like nature of theoxidized reef, this reef can only be processed effectively and efficiently whenblended with more competent reef at ratios in the order of 5% - 10%. The effectof this is, however, reflected by stockpiles of approximately 66,000 ROM tonswith an estimated recoverable 2,900 ounces locked up within them, available atthe end of the quarter.Approximately 50% of the cash cost increase was due to an authorized increasein strip ratio during July 2005 to allow for additional stripping due to theunanticipated change in location of Pit A reef sub-outcrop, as well as theremoval of clay layers found in Pit A as a contingency against heavy rainfall.These costs are deemed as one-off and not on-going.The PGM basket price increased quarter-on-quarter by 10.5% from R4,722 per PGMounce to R5,216 per PGM ounce at an average R/$ exchange rate of R6.52.Marikana: Metal in concentrate produced (PGM ounces)Quarter ended Pt Pd Rh Au PGMs (4E) Sep-05 17,244 7,409 2,466 203 27,322 Jun 05 16,893 7,402 2,428 217 26,940 Mar 05 17,230 6,759 2,324 196 26,509 Dec 04 15,808 6,214 1,800 197 24,019Marikana Pool & Share Agreement (P&SA2)On 13 July 2005, AQPSA announced a second Pooling and Sharing Agreement withAnglo Platinum. In terms of this agreement the Marikana ore-body andconcentrator plant will be pooled with Rustenburg Platinum Mines (RPM)underground UG2 ore reserves on the farm Brakspruit. At the Marikanaconcentrator a dense media separation plant (DMS) will be added allowing anincrease in throughput to 250,000 tpm.The P&SA2 will see Kroondal P&SA reserves associated with No 4 Shaft move toMarikana, while these reserves are replaced with reserves from RPM's Townlandsproperty. This leaves the Kroondal P&SA ounce neutral. Once the P&SA2 iseffective this exchange of reserves will have little or no impact on Kroondal P&SA production.The P&SA2 is subject to a number of conditions precedent and regulatoryapprovals. With good progress made during the quarter, it is expected that alloutstanding requirements will be met during the second quarter.The finalisation of the agreement will result in a revised Business Plan forMarikana. Underground mining production from No.4 shaft and Marikana, willgradually replace opencast mining production at Marikana at significantly loweroperating costs.Trial Underground MiningPoor ground conditions were experienced within 15m into the high wall in bothportals which necessitated the installation of steel sets and concrete tostabilise the area. This delayed sinking of the declines by a month. Conditionsunderground to date are favourable and the outlook is positive for achievingfuture planned tonnage build upContractor dispute with Moolman MiningAquarius Platinum (South Africa) (Proprietary) Limited ("AQPSA"), is currentlyengaged in arbitration proceedings instituted against AQPSA by Moolman Mining,a division of Grinaker LTA Limited ("Moolman Mining"), relating to theapplication of a "rise and fall formula" provided for in the opencast miningcontract concluded between Moolman Mining and AQPSA for AQPSA's Marikana Mine.At the request of Moolman Mining, AQPSA agreed to postpone the arbitrationproceedings indefinitely to adhere to a request from Moolman Mining to auditthe weightings in the rise and fall formula by KPMG, who would also investigatethe basis for the original weightings inserted in the mining contract at therequest of Moolman Mining.A leading forensic auditor, Professor Harvey Wainer, was appointed by AQPSA tomonitor the auditing process and to investigate the conduct of Moolman Miningwhen the mining contract was concluded.In AQPSA's view, KPMG has inferred that the weightings inserted in the miningcontract by Moolman Mining were materially defective and significantly, KPMGdisclaimed any view on Moolman Mining's explanation for the gross "error" intheir calculations in the following words -"Basis for disclaimer of conclusionWe obtained a schedule detailing the various categories of expenses per theoriginal tender of R799 million, as well as a schedule allocating the variousexpense categories to the cost elements (as per appendix B), however we werenot able to obtain sufficient appropriate evidence to substantiate the basis onwhich Moolman Mining allocated the expenses included in the tender to the costelements of "fuel", "local" and "foreign".Disclaimer of conclusionBecause of the significance of the matter described in the preceding paragraph,we do not express an opinion on the calculation and determination of theoriginal weightings for "fuel", "local" and "foreign" as reflected in theagreement."AQPSA views the matter in a very serious light. The disclaimer in the KPMGreport, suggests that there may have been a material misrepresentation of thefacts by Moolman Mining at the time when the mining contract was concluded,which induced AQPSA to agree to the terms proposed by Moolman Mining. AQPSA is,however, awaiting the report from its advisors, before a final decision istaken on the matter.AQPSA has received a "pro forma" invoice from Moolman Mining for escalation,based on a proposed revision of the original contractual weightings. MoolmanMining relied on the KPMG audit in compiling this pro forma invoice. Thevalidity of this pro forma invoice is under investigation by AQPSA's advisors,as part of the enquiry into the apparent misrepresentation of facts by MoolmanMining at a time when they caused the original weightings to be inserted intothe mining contract.Everest Platinum MineSafetyThe DIIR for the quarter rose to 0.41 from 0.39 in the previous quarter as aresult of three lost time injuries.Highlights * Construction activities are on schedule and within budget * Opencast mining and underground mining activities on programme, with 220,000 tons on stockpile * Plant commissioning is set for December 2005 MiningOpencast mining progressed well during the period, with opencast productionfrom both the North and South pits. Opencast mining is ahead of programme, witha total of 145,720 opencast ROM tons produced during the quarter.The decline development in the footwall was completed during the period, withreef intersection on programme. Underground services have been fullycommissioned and 18,000 tons of underground ROM tons were produced. Combinedopencast and underground mining have yielded a stockpile of 220,000 ROM tons,approximately 10,000 ROM tons more than planned.ProgressThe Everest construction programme is proceeding as planned. Earthworks, civilconstruction and erection of steel structures are complete, with piping,electrical and instrumentation and tailings dam construction continuing duringthe period. Engineering, design and procurement activities are proceeding inparallel and project execution is on track for hot commissioning duringDecember 2005.Everest will mine and process 250,000 tons per month of UG2 ore to produce225,000 ounces of PGMs per annum at steady state, with full production to beattained by the end of 2006.The implementation of Social Upliftment and Sustainable Livelihood projects isongoing. Contractor recruitment of local labour is proving beneficial with 523local people employed during the period.The Everest capital budget is R819 million including a R33 million allowancefor escalation. The Everest project capital expenditure commitments were R622million at the end of the quarter with capital expenditure paid to date of R413million.MIMOSA INVESTMENTSMimosa Mine (Aquarius 50%)SafetySafety performance improved by 65% achieving a DIIR of 0.12 for the quartercompared to a DIIR of 0.34 for the previous quarter. The rolling 12 months DIIRclosed at 0.22 down from 0.31 as at the end of June 2005.ProductionSatisfactory results were achieved in all operations with ROM and PGMproduction increasing 10% and 2% respectively compared to the previous quarter.ROM production at 433,000 dry metric tons achieved during the quarter was inline with the increase in lashing capacity following the delivery of additionalunderground vehicles. The PGM feed grade improved was constant at 3.75g/t. A 1%improvement in the recovery rate to 78% resulted in an increase in the totalPGM ounces produced to a record 36,368 (previous quarter 35,644).Mimosa: PGMs in concentrate produced (ounces)Quarter ended Pt Pd Rh Au PGMs (4E) PGMs (4E) attributable to Aquarius Sep-05 18,548 13,915 1,407 2,498 36,368 18,184 Jun 05 18,269 13,518 1,406 2,451 35,644 17,822 Mar 05 17,189 12,665 1,343 2,332 33,529 16,765 Dec 04 15,557 11,514 1,198 2,117 30,386 15,193Mimosa: Base metals in concentrate produced (tons)Quarter ended Mine Production Attributable to Aquarius Ni Cu Co Ni Cu Co Sep-05 512 422 15 256 211 8 Jun 05 514 420 15 257 210 8 Mar 05 491 407 14 245 203 7 Dec 04 444 374 13 222 187 6RevenueThe gross revenue realized for the quarter was up by 20% to US$27.6 millioncompared to US$23.0 million for the previous quarter. The increase is directlyattributable to 2% increase in both the PGM basket price and PGM ounce producedto US$614 per ounce and 36,368 respectively.Operating CostsCash costs per PGM ounce for the quarter decreased by 7% to US$361 compared toUS$389 for the quarter ending 30 June 2005. After by-product credits cash costsper ounce were 36% lower at US$105 compared to US$164 in the previous quarter.The reduction in the cash costs was attributable to a 49% devaluation ofZimbabwean dollar during the quarter from Z$17,500 to US$1.00 down to Z$26,002to US$1.00. However the full benefits of this devaluation were partly eroded bya cost push inflation of local costs and the scrapping of 25% Export IncentiveScheme by the Reserve Bank of Zimbabwe.Wedza Phase IV UpgradeThe mine embarked on the Wedza Phase IV upgrade project to increase productionby 25% to 170,000 PGM ounces (86,000 platinum ounces). The project followsfinalization of the Account Management Agreement with the Reserve Bank ofZimbabwe (RBZ) in terms of the Enhanced Platinum Sector Regime (EPSR), thegranting of a project status by the Ministry of Finance and the conclusion of aUS Dollar based loan facility with the Merchant Bank of Central Africa (MBCA).The project is due for completion by June 2006.Foreign exchangePost the closure of the quarter ended September; the Reserve Bank of Zimbabwe(RBZ) issued its 2005 3rd Quarter Momentary Policy Statement on 20 October2005. The policy relaxed controls on foreign exchange management by introducinga new Tradable Foreign Currency Balances System (TFCBS) to replace the highlyregulated Foreign Exchange Auction Floor System. The new regime together withthe Enhanced Platinum Sector Regime allows platinum exporters to retain foreigncurrency in FCA's for 45 days. Any balance not utilised in the 45 days isexchanged at the ruling inter bank market rate. The new regime is favourable toexporters and should assist mine profitability going forward.AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTDChromite Tailings Retreatment Plant (CTRP) (Aquarius 50%)SafetyNo lost time injuries occurred during the quarter.Processing * Throughput during the quarter remained low due to problems in feeding certain dump material into the process. The installation of cyclones to remove excess water from the Xstrata feed helped to raise throughput during September. * Production was lower than the previous quarter due to a decrease in PGM recovery. The drop off in recovery is a result of excessive water in the circuit, which has been rectified by the installation of the cyclones. Recovery of the dump material is still below expectation and negatively affecting overall plant recovery. OperationsCash costs per PGM ounce for the quarter were $448. Costs are above planestimates and are expected to reduce once steady state production is achieved.Despite current high production costs, the operation is cash positive andreturns a small profit. Optimisation of the flotation circuit continued duringSeptember. During the second quarter additional process equipment will betested with the aim of solving the feed problems, improving density control andincreasing recoveries. Significant improvements in production are expected fromthe third quarter.CORPORATE MATTERSNew 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 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 will be 190 basis points above bothJIBAR and LIBOR.Existing debt facilityR175 million ($25.3 million) was redrawn against the existing debt facility forproviding assurances of funding capacity as the Company enters into P&SA2. Thisdebt will be repaid and cancelled by drawing on the RMB facility.Statistical Information: Kroondal P&SA1: (Aquarius 50%) Data reflects Current Previous % Change Current Previous 100% of mine operations Unit Quarter Quarter Quarter 3 months 3 months Sept 2005 June on to Sept to Sept 2005 Quarter 05 04 Safety DIIR Rate/200,000 0.65 0.65 - 0.65 0.94 man hours Revenue Gross Revenue R'M 573 466 23 573 257 PGM basket Price $/oz 813 745 9 813 672 Gross cash % 50 45 11 50 36 margin Nickel Price $/lb 6.60 7.44 (11) 6.60 6.00 Copper Price USc/lb 170 154 10 170.00 129 Ave R/$ rate 6.52 6.33 3 6.52 6.34 Cash Costs Per ROM ton R/ton 181 163 11 181 189 $/ton 28 26 7 28 30 Per PGM oz R/oz 2,489 2,208 13 2,489 2,436 $/oz 382 349 9 382 384 Per PGM oz after R/oz 2,362 2,070 14 2,362 2,333 by-product credit $/oz 362 327 11 362 368 Capex Current R'000s 16,522 18,453 (10) 16,522 1,455 $'000s 2,534 2,915.00 (13) 2,534 229 Expansion R'000s 32,635 67,198 (51) 32,635 115,420 $'000s 5,005 10,616 (53) 5,005 18,199 Mining Processed Underground ROM Ton '000 1,465 1,519 (4) 1,465 803 Open Pit ROM Ton '000 125 59 112 125 65 Total ROM Ton '000 1,590 1,578 1 1,590 868 Grade Plant Head g/t 2.88 2.99 (4) 2.88 3.02 Recoveries % 78 77 1 78 80 PGM Production Platinum Ozs 69,129 69,875 (1) 69,129 40,389 Palladium Ozs 33,420 33,728 (1) 33,420 19,471 Rhodium Ozs 12,250 12,499 (2) 12,250 7,285 Gold Ozs 563 567 (1) 563 342 Total Ozs 115,362 116,669 (1) 115,362 67,487 Base Metals Production Nickel Tonnes 110 119 (8) 110 63 Copper Tonnes 48 53 (9) 48 27 Chromite (000) Tonnes (000) 275 261 5 275 50 Data reflects 100% +/- % YTD of mine operations Unit Year on Year 3 months to Sept 2005 Safety DIIR Rate/200,000 man (31) 0.65 hours Revenue Gross Revenue R'M 123 573 PGM basket Price $/oz 21 813 Gross cash margin % 39 50 Nickel Price $/lb 10 6.60 Copper Price USc/lb 32 170 Ave R/$ rate 3 6.52 Cash Costs Per ROM ton R/ton (4) 181 $/ton (7) 28 Per PGM oz R/oz 2 2,489 $/oz (1) 382 Per PGM oz after R/oz 1 2,362 by-product credit $/oz (2) 362 Capex Current R'000s 1,036 16,522 $'000s 1,007 2,534 Expansion R'000s - 32,635 $'000s - 5,005 Mining Processed Underground ROM Ton '000 82 1,465 Open Pit ROM Ton '000 92 125 Total ROM Ton '000 83 1,590 Grade Plant Head g/t (5) 2.88 Recoveries % (3) 78 PGM Production Platinum Ozs 71 69,129 Palladium Ozs 72 33,420 Rhodium Ozs 68 12,250 Gold Ozs 65 563 Total Ozs 71 115,362 Base Metals - Production Nickel Tonnes 75 110 Copper Tonnes 78 48 Chromite (000) Tonnes (000) 450 275 Statistical Information: Marikana: (Aquarius 100%) Data reflects 100% of Current Previous % Change YTD Previous mine operations Unit Quarter Quarter Quarter 3 months 3 months Sept 2005 June on to Sept to Sept 2005 Quarter 05 04 Safety DIIR Rate/ 0.80 0.81 (1) 0.80 0.80 200,000 man hours Revenue Gross Revenue R'M 127 105 21 127 82 PGM basket Price $/oz 800 746 7 800 685 Gross cash margin % 8 8 - 8 (37.8) Nickel Price $/lb 6.60 7.44 (11) 6.60 6.35 Copper Price USc/lb 170 154 10 170 129 Ave R/$ rate 6.52 6.33 3 6.52 6.34 Cash Costs Per ROM ton R/ton 280 239 17 280 282 $/ton 43 38 (5) 43 44 Per PGM oz R/oz 4,268 3,578 19 4,268 5,198 $/oz 655 565 16 655 820 Per PGM ounce after by R/oz 4,051 3,342 21 4,051 5,100 product credit $/oz 621 528 18 621 804 Capital expenditure Current R'000s 3,434 6,053 (43) 3,434 5,100 $'000s 527 956 (45) 527 804 Expansion R'000s - - - - $'000s - - - - Processed Underground ROM Ton 8 - 8 - '000 Open Pit ROM Ton 409 403 1 409 400 '000 Total ROM Ton 417 403 3 417 400 '000 Grade Plant Head g/t 3.26 3.20 2 3.26 3.72 Recoveries % 62 65 (5) 62 45 PGM Production - Platinum Ozs 17,244 16,893 2 17,244 13,937 Palladium Ozs 7,409 7,402 0 7,409 6,039 Rhodium Ozs 2,466 2,428 2 2,466 1,509 Gold Ozs 203 217 (6) 203 209 Total Ozs 27,322 26,940 1 27,322 21,694 Base Metals Production Nickel Tonnes 40 45 (11) 40 23 Copper Tonnes 24 27 (11) 24 13 Chromite (000) Tonnes 60 66 (9) 60 61 (000) Data reflects 100% of Previous YTD mine operations Unit Year on Year 3 months to Sept 05 Safety DIIR Rate/200,000 man - 0.80 hours Revenue Gross Revenue R'M 55 127 PGM basket Price $/oz 17 800 Gross cash margin % n/a 8 Nickel Price $/lb 4 6.60 Copper Price USc/lb 32 170 Ave R/$ rate 3 6.52 Cash Costs Per ROM ton R/ton (1) 280 $/ton (3) 43 Per PGM oz R/oz (18) 4,268 $/oz (20) 655 Per PGM ounce after by R/oz (21) 4,051 product credit $/oz (23) 621 Capital expenditure - Current R'000s (33) 3,434 $'000s (34) 527 Expansion R'000s - $'000s - Processed Underground ROM Ton '000 8 Open Pit ROM Ton '000 2 409 Total ROM Ton '000 4 417 Grade Plant Head g/t (12) 3.26 Recoveries % 38 62 PGM Production Platinum Ozs 24 17,244 Palladium Ozs 23 7,409 Rhodium Ozs 63 2,466 Gold Ozs (3) 203 Total Ozs 26 27,322 Base Metals Production Nickel Tonnes 73 40 Copper Tonnes 84 24 Chromite (000) Tonnes (000) - 60 Statistical Information: Mimosa (Aquarius 50%) Data reflects 100% Current Previous % Change YTD Previous of mine operations Unit Quarter Quarter Quarter 3 months 3 months Sept 2005 June on to Sept to Sept 2005 Quarter 05 04 Safety DIIR Rate/ 0.12 0.34 (65) 0.12 0.54 200,000 man hours Revenue - Gross Revenue US$M 27.60 23.0 20 27.60 20 PGM basket Price $/oz 614 603 2 614 571 Gross cash margin % 57 57 - 57 62 Nickel Price $/lb 6.92 7.11 (3) 6.92 6.06 Copper Price USc/lb 150 146 3 150 97 Cash Costs Per ROM ton $/ton 34 36 (6) 34 29 Per PGM oz after $/oz 361 389 (7) 361 321 by-product credit Per PGM oz after $/oz 106 164 (35) 106 111 by-product credit Capital expenditure Current $'000s 2,432 2,245 8 2,432 5,650 Expansion $'000s - 370 (100) - 321 Mining Underground ROM Ton 433 395 10 433 329 '000 Grade Plant Head g/t 3.76 3.75 0 3.76 3.68 Recoveries % 78 77.2 1 78 77.0 PGM Production Platinum Ozs 18,458 18,269 1 18,458 15,727 Palladium Ozs 13,915 13,518 3 13,915 11,562 Rhodium Ozs 1,407 1,406 0 1,407 1,210 Gold Ozs 2,498 2,451 2 2,498 2,109 Total Ozs 36,278 35,644 2 36,278 30,608 Base Metals Production Nickel Tonnes 512 514 (0) 512 447 Copper Tonnes 422 420 0 422 362 Cobalt Tonnes 15 15 - 15 14 Data reflects 100% of +/- % YTD mine operations Unit Year on Year 3 months to 30 Sept 05 Safety DIIR Rate/200,000 man (78) 0.12 hours Revenue - Gross Revenue US$M 38 27.60 PGM basket Price $/oz 8 614 Gross cash margin % (8) 57 Nickel Price $/lb 14 6.92 Copper Price USc/lb 55 150 Cash Costs Per ROM ton $/ton 17 34 Per PGM oz after $/oz 12 361 by-product credit Per PGM oz after $/oz (5) 106 by-product credit Capital expenditure Current $'000s (57) 2,432 Expansion $'000s (100) - Mining Underground ROM Ton '000 32 433 Grade Plant Head g/t 2 3.76 Recoveries % 1 78 PGM Production Platinum Ozs 17 18,458 Palladium Ozs 20 13,915 Rhodium Ozs 16 1,407 Gold Ozs 18 2,498 Total Ozs 19 36,278 Base Metals Production Nickel Tonnes 15 512 Copper Tonnes 17 422 Cobalt Tonnes 7 15 Statistical Information: Chromite Tailings Retreatment Program (Aquarius 50%) Data reflects 100% of Current Previous % Change Current Previous mine operations Unit Quarter Quarter Quarter 3 months 3 months Sept 2005 June on to Sept to Sept 2005 Quarter 05 04 Safety DIIR Rate/ - - - - - 200,000 man hours Revenue Gross Revenue R'M 1.0 0.9 16 1.0 - PGM basket Price $/oz 940 840 12 940 - Gross cash margin % 45 52 (13) 45 - Nickel Price $/lb - - - - - Copper Price USc/lb - - - - - Cash Costs Per ROM ton $/ton 16 14 17 16 - Per PGM oz $/oz 448 339 32 448 - Per PGM ounce after by $/oz - - - - - product credit Capital expenditure Current $'000s - - - - - Expansion $'000s 55 0.1 - 55 - Feed Processed ROM Ton 37 37 - 37 - '000 Grade Plant Head g/t 2.91 2.58 13 2.91 - Recoveries % 40 47 (14) 40 - PGM Production Platinum Ozs 864 920 (6) 864 - Palladium Ozs 282 303 (7) 282 - Rhodium Ozs 215 247 (13) 215 - Gold Ozs 3 3 - 3 - Total Ozs 1,364 1,473 (7) 1,364 - Data reflects 100% of mine % Change YTD operations Unit Year on Year 3 months to Sept 05 Safety DIIR Rate/200,000 man - - hours Revenue Gross Revenue R'M - 1.0 PGM basket Price $/oz - 940 Gross cash margin % - 45 Nickel Price $/lb - - Copper Price USc/lb - - Cash Costs Per ROM ton $/ton - 16 Per PGM oz $/oz - 448 Per PGM ounce after by $/oz - - product credit Capital expenditure - Current $'000s - - Expansion $'000s - 55 Feed Processed ROM Ton '000 - 37 Grade Plant Head g/t - 2.91 Recoveries % - 40 PGM Production Platinum Ozs - 864 Palladium Ozs - 282 Rhodium Ozs - 215 Gold Ozs - 3 Total Ozs - 1,364 Aquarius Platinum LimitedIncorporated in BermudaExempt company number 26290Board of DirectorsNicholas Sibley - Non-executive ChairmanStuart Murray - Chief Executive OfficerDavid Dix - Non-executiveEdward Haslam - Non-executiveCatherine Markus - Non-executiveSir William Purves - Non-executivePatrick Quirk - Non-executiveZwelakhe Sisulu - Non-executiveAudit/Risk CommitteeSir William Purves (Chairman)David DixEdward HaslamNicholas SibleyRemuneration/Succession Planning CommitteeEdward Haslam (Chairman)Catherine MarkusNicholas SibleyNomination CommitteeThe full Board comprises the Nomination CommitteeCompany SecretaryWilli BoehmIssued CapitalAt 30 September 2005, the Company had on issue:82,854,892 fully paid common shares3,756,402 unlisted optionsSubstantial Shareholders 30 June 2005 Number of Shares Percentage Impala Platinum Holdings Ltd. 7,141,966 8.63 J P Morgan Nominees Australia Limited 6,260,225 7.56 Chase Nominees Limited (FISL) 5,672,576 6.85 National Nominees Limited 4,548,856 5.50 ANZ Nominees Limited 4,469,982 5.40 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)Nedbank Capital135 Rivonia RoadSandown, Sandton 2196Telephone: +27 (0)11 294 3601Facsimile: +27 (0)11 294 8602Aquarius Platinum (South Africa) Aquarius Platinum Corporate Services (Proprietary) Ltd. Pty Ltd 50.5% Owned 100% Owned (Incorporated in the Republic of South (Incorporated in Australia) Africa) ACN 094 425 555 Registration Number 2000/000341/07 Level 4, Suite 5, South Shore Centre,Block A, 1st Floor, The Great Wall Group Building 85 The Esplanade, South Perth, WA 6151, 5 Skeen Boulevard, Bedfordview Australia South Africa 2007 PO Box 485 P O Box 1282 South Perth, WA 6151, Australia Bedfordview South Africa 2009 Telephone: +61 (0)8 9367 5211 Telephone: +27 (0)11 455 2050 Facsimile: +61 (0)8 9367 5233 Facsimile: +27 (0)11 455 2095 Email: [email protected] Email: [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 - General Manager GlossaryA$ Australian Dollar Aquarius Aquarius Platinum Limited ABET Adult Basic Education Training programme APS Aquarius Platinum Corporate Services Pty Ltd AQPSA Aquarius Platinum (South Africa) Pty Ltd ASACS Aquarius Platinum (SA) (Corporate Services) (Pty) Limited 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 DMS Dense Media Separation EMPR Environmental Management Programme Report Everest Everest Platinum Mine Great Dyke Reef A PGE bearing layer within the Great Dyke Complex in Zimbabwe g/t Grams per tonne, measurement unit of grade (1g/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 Pt (platinum), Pd (palladium), Rh (rhodium), RU (ruthenium), Ir (iridium) and Os (osmium) PGM(s) (4E) Platinum Group Metals. Aquarius reports the composite grade comprising Pt+Pd+Rh+Au (gold), the Pt, Pd and Rh being the most economic platinoids in the UG2 Reef. P&SA1 Kroondal Pooling & Sharing Agreement between AQPSA and RPM Ltd P&SA2 Marikana Pooling & Sharing Agreement between AQPSA and RPM Ltd R South African Rand RK1 Consortium comprising Aquarius Platinum (SA) (Corporate Services) (Pty) Limited (ASACS), GB Mining and Exploration (SA) (Pty) Limited (GB) and Sylvania South Africa (Pty) Ltd (SLVSA). ROM Run of Mine. The ore from mining which is fed to the concentrator plant. This is usually a mixture of UG2 ore and waste. RPM Rustenburg Platinum Mines Limited TKO TKO Investment Holdings Limited Ton 1 Metric tonne (1,000kg) UG2 Reef A PGE bearing chromite layer within the Critical Zone of the Bushveld Complex $ United States Dollars Z$ Zimbabwe Dollar Further information please contact:In Australia: Willi Boehm Aquarius Platinum Corporate Services Pty Ltd +61 (0)8 9367 5211 In United Kingdom: Nick Bias BuckBias Limited + 44 (0)7887 920 530 Alex Buck BuckBias Limited +44 (0)7392 740 452 In South Africa: Stuart Murray Aquarius Platinum (South Platinum) (Pty) Ltd +27 (0)11 455 2050 Charmane Russell Russell & Associates +27 (0)11 880 3924 or visit: www.aquariusplatinum.com ENDAQUARIUS PLATINUM LIMITEDRelated Shares:
AQP.L