21st Apr 2009 07:02
AQUARIUS PLATINUM LIMITED
Aquarius PlatinumThird Quarter 2009 Financial & Production Results
Highlights of the Quarter
Attributable production 97,212 PGM ounces. A solid performance despite 10 fewer shifts (14%) in South Africa and suspension of operations at Everest Mine. Excellent operational and safety performance at Mimosa.
Group cash costs steady quarter on quarter.
PGM prices improved through quarter, results aided by weaker Rand US Dollar exchange rate.
Gross "cash" profit for the quarter $14.2 million.
Net profit for the quarter was $6.5 million, reversing losses of prior two quarters.
Successful capital raising negotiated including a placement of 46.3 million shares raising £83.4 million, an underwritten rights issue of £47.7 million in progress and a fully underwritten convertible note issue of ZAR500 million.
Commenting on the results, Stuart Murray, CEO of Aquarius Platinum said "The calendar quarter to March is traditionally the lowest average quarterly production for our South African operations because it includes the Christmas and New Year holiday periods. Factoring in 14% fewer shifts than the previous quarter, what at first glance appears to be a quarter of lower production and flat costs actually reveals some good improvements at the operations for the third quarter in a row both in terms of production and costs due to underlying improvements in efficiencies.
The quarter is however, singularly characterised by the successful equity placing that we undertook in March, and the ongoing associated rights issue and convertible bond processes. It was very encouraging to see such good demand for the new equity and correspondingly the confidence that shareholders have placed in Aquarius' future. Funds will be applied with diligence to retiring existing debt, redeveloping the Everest Mine and indeed to new projects once the acquisition of Ridge completes. I would like to take this opportunity to thank shareholders, both old and new for their support of our business."
P&SA1 at Kroondal
PGM production of 104,920 PGM ounces (Aquarius attributable 52,460 PGM ounces), a modest 4% decrease compared to the previous quarter.
Effective cash margin was 38%
P&SA2 at Marikana
PGM production of 38,851 PGM ounces (Aquarius attributable: 19,426 PGM ounces), an 8% decrease compared to the previous quarter before adjusting for 14% fewer shifts.
Effective cash margin was 26%
Mimosa
PGM production up 7% quarter-on-quarter to 46,278 PGM ounces (Aquarius attributable 23,139 PGM ounces) compared to the previous quarter.
Cash margin for the quarter reduced to 24% due to increased costs and negative sales adjustments.
CTRP
PGM production of 1,587 PGM ounces (Aquarius attributable: 793 PGM ounces), an 11% decrease compared to the previous quarter
Effective cash margin increased to 53% compared to -2% in the previous quarter
Platinum Mile
PGM production of 2,788 PGM ounces (Aquarius attributable: 1,394 PGM ounces), a10% decrease compared to the previous quarter due to commissioning difficultieswith the fine grind mills.Effective cash margin of 26%Production by Mine Quarter Ended PGMs (4E) Jun 2008 Sep 2008 Dec 2008 Mar 2009 Kroondal 83,062 101,731 109,707 104,920 Marikana 28,416 38,883 42,451 38,851 Everest* 31,327 32,365 31,703 - Mimosa 38,517 43,638 43,232 46,278 CTRP 2,044 1,764 1,784 1,587 Platinum Mile 5,035 5,983 3,103 2,788 Total 188,401 224,364 231,980 194,424*
Production by Mine Attributable to Aquarius
Quarter Ended PGMs (4E) Jun 2008 Sep 2008 Dec 2008 Mar 2009 Kroondal 41,531 50,866 54,854 52,460 Marikana 14,208 19,442 21,226 19,426 Everest* 31,327 32,365 31,703 - Mimosa 19,258 21,819 21,616 23,139 CTRP 1,022 882 892 793 Platinum Mile 2,517 2,992 1,552 1,394 Total 109,863 128,366 131,843 97,212
* Q3 production not comparable to previous quarter's production due to the temporary closure of the Everest mine in December 2008.
Metals Prices and Foreign Exchange
Metals price performance for our commodities was less volatile over the quarter and characterized by an overall upward trend compared to the low prices experienced in the previous quarter. Platinum closed the quarter back above the $1,000 mark, up 24% over the quarter to a close of $1,124 per PGM ounce. Surplus supply experienced in the previous quarter due to poor autocatalyst demand found new homes in jewellery, in particular in China. In addition, increased demand in the metal as an investment (including ETFs) as an alternative to gold has seen a resurgence in demand, noticeably amongst Japanese retail investors. Palladium closed the quarter up 17% to $215 per ounce. Rhodium traded less volatile, closing the quarter down 6% at $1,175 per ounce. Gold closed the quarter up 6% at $921 per ounce.
Looking at the 4PGE basket prices for the quarter, the average achieved basket for operations in South Africa increased 7% to $797 per ounce (equal to R7,992 per ounce) and at Mimosa the achieved basket price reduced by -31% to $626 per ounce. The average basket price for the group for the quarter reduced 2% to $756 per PGM ounce, or R7,518 per ounce, dragged lower because of the reduction in the achieved basket price in Zimbabwe. It should be noted that the average basket price at the end of quarter, as calculated using market prices was $848 per ounce, equal to R8,068 per ounce using the quarter end Rand Dollar exchange rate of 9.52.
Average PGM basket prices achieved at Aquarius operations: US$ per PGM ounce(4E) Basket Prices (Quarter Ended) Jun 2008 Sep 2008 Dec 2008 March 2009 Kroondal 2,350 1,758 746 795 Marikana 2,311 1,693 744 799 Everest 2,266 1,692 746 - Mimosa 1,607 1,549 905 626* CTRP 2,850 2,251 818 859 Platinum Mile 1,989 1,085 596 810 Aquarius Group Average 2,187 1,684 770 756 Note:
*Production for Mimosa is priced on the average London morning and afternoon prices for the calendar month prior to the month in which refined metals are produced, and consequently the basket price achieved shows a lag of one month compared to the average calendar prices.
The Rand continued to hold its weaker 9 to 10 band against the US dollar, closing 2% weaker at an exchange rate of 9.52 to the US Dollar. The average Rand rate realised at South African operations during the quarter was 9.94 to the US Dollar.
Financials
Consolidated earnings for the quarter to 31 March 2009 was a net profit of $6.5 million (US 2 cents per share). Cash profit was $14.2 million for the quarter. This is a significant improvement from the previous two quarters which recorded losses of $21.5 million in the September '08 quarter and $48.5 million in the December '08 quarter largely as a result of negative sales price adjustments. The March quarter also benefited from improving PGM prices.
Importantly, the improved result is in spite of lower production of 30,000 PGM ounces due to the temporary closure of the Everest mine in December 2008.
For the quarter to 31 March 2009, revenue was $80.5 million, a $43 million increase in revenue compared to the December '08 quarter. The revenue figure is inclusive of positive sales adjustments of $11.8 million due to the flow through of improved PGM prices experienced during the quarter. The $11.8 million positive sales adjustment represents a $68.8 million turn around compared to the December '08 quarter's negative sales adjustment of $57.1 million. The stability and recovery in PGM prices has seen an end to the abnormally high sales adjustments experienced in the December half year.
Table A: Aquarius Attributable Production and Net Profit Summary by Quarter
Quarter Quarter Quarter Quarter ended ended ended ended Jun 2008 Sep 2008 Dec 2008 Mar 2008
4PGE Production (attributable ounces) 109,863 128,366 131,843 97,212
Revenue $217.3m $178.1m $90.0m $66.7m
PGM Sales Adjustments - Realised & $27.3m ($71.9m) ($57.1m) $11.8m Unrealised
Total Revenue $244.6m $106.2m $32.9m $78.5m
Net Profit/(Loss) After Tax & Outside $39.1m ($21.5m) ($48.6m) $6.5m Equity Interests
Reduction in unit costs remains a focus throughout the Group's operations. During FY2009 there has been a 30% reduction in unit costs of which 10% was a reduction of the rand cost base and 20% was due to US dollar strength against the Rand. At Mimosa, unit costs were slightly up following the dollarisation of the Zimbabwean economy. It is too early to gauge the impact of the dollarisation of the Zimbabwean economy on the Mimosa mine operations.
At operations in South Africa, price changes have been experienced in the following input costs:
Table C: Quarterly Price Cost Changes at AQPSA, Q1 FY2009 Compared to Q4 FY2008
Q3 2009 compared to Q2 2009 Labour 0% Diesel -29.6% Chemicals -0.44% Explosives -10.45% Steel -7.9% Electricity* 0%
Looking to the fourth quarter 2009, it is anticipated that reductions in unit costs will be achieved as production increases further due primarily to increased shifts, though also due to falling prices for diesel, chemicals and steel flow through the cost base.
Finance charges for the quarter of $7.9 million included interest payments on the RMB debt facility of $6.4 million and a non-cash component of $1.5 million on the unwinding of the rehabilitation provision.
Subsequent to the end of the quarter on 9 April the RMB facility was reduced to R500 million following the repayment of R1.08 billion of the RMB facility from proceeds of the placement of shares concluded in early April. It is envisaged that the remaining RMB facility (R500 million) will be paid out in the second week of May following conclusion of the issuance of the new convertible loan details of which can be sourced from the offer circular available on the Company website.
Depreciation and amortisation was in line with expectation at $7.7 million.
The Aquarius group cash balance at 31 March 2009 totaled $65.0 million. Net operating cash flow for the quarter comprised $77 million from sales, $67 million paid to suppliers, net finance expenses of $5.5 million and income tax paid of $2.2 million. Material cash flow items (other than mine operations) that affected cash balances during the quarter included capital expenditure of $10.5 million.
Group cash at 31 March 2008 (before proceeds from the placement of 46,330,000shares) was held as follows:AQP $35.0 million AQPSA $16.3 million ACS(SA) $10.2 million Mimosa $ 3.5 million Total $65.0 million*
Placement of 46,330,000 new common shares
Subsequent to the end of the quarter, gross proceeds of £83.4 million were received following the successful completion of the placing of 46,330,000 new common shares as announced to the market on 26 March. These proceeds have been used to retire part of the RMB bridge facility.
Aquarius Platinum Limited Consolidated Income Statement Quarter ended 31 March 2009 $'000 Quarter Nine Months Financial Year Ended Ended Ended Note: 31/03/09* 31/03/09* 30/06/08 Aquarius PGM Production 97,212 357,421 500,203 (attributable ounces) Revenue (i) 78,459 217,638 919,012 Cost of sales (ii) (62,198) (259,519) (359,873) Gross profit/(loss) 16,261 (41,881) 559,139 Other income 379 565 2,109 Admin & other operating (2,013) (6,723) (10,467) costs Other FX movements (iii) (961) (37,260) 14,286 Finance costs (iv) (7,986) (29,576) (28,260) Impairment losses ( ) (121) (12,703) - Profit/(loss) before 5,559 (127,578) 536,807 tax Income tax benefit/ 981 28,144 (173,214) (expense)
Profit/(loss) after tax 6,540 (99,434) 363,593
Minority interest (v) - 35,842 (127,119) Net profit/(loss) 6,540 (63,592) 236,474 EPS (basic - cents per 2.0 (19.44) 91.98 share) * Unaudited
Notes on the March 2009 Consolidated Income Statement
Revenue for the quarter is $42 million higher than the Dec 08 quarter (despite lower production due to the temporary closure of the Everest mine) following stabilization of PGM prices during the quarter. This has resulted in positive sales pipeline adjustments of $11.8 million for the quarter, a $68.8 million turn around from the previous quarter.
Cost of sales per PGM ounce have reduced during the course of FY2009 both in Rand and dollar terms due to increased efficiencies and dollar strength.
Reflects foreign exchange movements on revaluation of net monetary assets.
Finance costs include group debt ($6.4 million) and unwinding of rehabilitation provision ($1.5 million).
Minority interests no longer apply following conclusion of the final phase of the BEE flip in October 2008.
Aquarius Platinum Limited Consolidated Cash flow Statement Quarter ended 31 March 2009 $'000 Nine Quarter Ended Months Financial Year Ended Ended Note: 31/03/09* 31/03/09 30/06/08 * Net operating cash inflow (i) 2,144 (13,736) 339,073 Net investing cash outflow (ii) (10,476) (34,920) (118,048) Net financing cash outflow 14 (30,080) (320,081) Net increase in cash held (8,318) (78,736) (99,056) Opening cash balance 86,953 170,956 287,663 Exchange rate movement on cash (13,582) (27,167) (17,651) Closing cash balance 65,053 65,053 170,956 * Unaudited
Notes on the March 2009 Consolidated Cash flow Statement
Net operating cash flow for the March quarter includes $77 million inflow from sales, $67 million paid to suppliers, net finance expense of $5.5 million and income tax paid of $2.2 million.
Reflects development and plant and equipment expenditure of $10.5 million.
Aquarius Platinum Limited Consolidated Balance Sheet At 31 March 2009 $'000 Financial Quarter Ended Year Ended Note: 31/03/09* 30/06/08 Assets Cash assets 65,053 170,956 Current receivables (i) 85,583 186,964 Other current assets (ii) 43,319 35,941 Property, plant and equipment (iii) 200,037 221,515 Mining assets (iv) 248,954 277,428 Goodwill (v) 47,936 58,505 Other non-current assets (vi) 12,955 15,599 Total assets 703,837 966,908 Liabilities Current liabilities (vii) 209,613 267,517 Non-current payables (viii) 1,992 2,219 Non-current interest-bearing liabilities (ix) 1,761 1,752 Other non-current liabilities (x) 100,029 150,906 Total Liabilities 313,395 422,394 Net assets 390,442 544,514 Equity Parent entity interest 390,442 508,914 Minority interest - 35,600 Total Equity 390,442 544,514 * Unaudited
Notes on the March 2009 Consolidated Balance Sheet
Reflects debtors receivable on PGM concentrate sales
Reflects PGM concentrate inventory, reef stockpiles and consumables stores
Represents plant and equipment within the Group
Mining assets reflects Kroondal, Marikana, Mimosa and Everest mining (mining rights) assets
Platinum Mile Resources acquisition
Includes recoverable portion of rehabilitation provision from Anglo Platinum ($11.9 million), investments in unlisted entities ($0.9 million)
Includes RMB bridge facility $162 million (since reduced on 9th April to $50 million), creditor and other payables $45 million and tax payable $2 million.
Includes rehabilitation obligations on P&SA1 and P&SA2 structures.
Reflects Investec loan at Platinum Mile Resources.
Reflects deferred tax liabilities $47 million, provision for closure costs $53 million.
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum 100%)
P&SA 1 at Kroondal
Safety
The 12-month rolling average DIIR for the quarter improved to 0.71 from 0.77 in the previous quarter. Twelve lost-time injuries were reported during the quarter.
Mining
Production tons decreased by 19% to 1,456,748 tons due to the lower number of operating shifts during the quarter and higher geological losses
Consequently, head grade decreased marginally from 2.60 g/t to 2.56 g/t
Processing
Reduction in mining shifts mitigated by stockpile accumulation
Tons processed decreased by 3% to 1,623,838 tons
Recoveries increased at 78.5%
PGM production decreased by 4% to 104,920 PGM ounces
Revenue
The achieved mine basket price for the quarter averaged $795 per PGM ounce, 7% higher than the previous quarter. The achieved mine Rand Dollar exchange rate averaged 9.94 for the quarter. Revenue at Kroondal increased by 183% to R846 million for the quarter (Aquarius attributable: R423 million).
The decrease in production was in part offset by the gains in the basket price. However, revenue normalised as the impact of negative sales adjustments decreased due to stability and recovery in PGM prices with positive sales adjustments realising in March 2009.
Operations
The third quarter, which includes the Christmas and New Year period; has 14% less mining shifts than the second quarter due to the number of public holidays and associated shift scheduling. This impacted directly on underground production with the total square meters mined decreasing by 11% over the period. However, a higher incidence of geological features such as potholes during the period resulted in a 30% increase in the off-reef square meters mined, which directly reduced the resultant tonnage yield. The bulk of off-reef mining is back-packed to reduce grade dilution and does not reflect as mine production.
Production was further impacted by suspension of activities at the K5 Shaft following the fatal accident at the end of the previous quarter. Although the DME lifted the Section 54 instruction issued to Kroondal operations, Aquarius management decided to suspend operations at K5 shaft pending further representation and remedial measures implemented by Redpath, the K5 shaft underground mining contractor. Operations at the shaft therefore only resumed in January 2009.
As a result of the above factors, Kroondal mining production decreased by 19% to 1,456,748 tons for the quarter.
The 'Areboleleng' (Tswana for "let's talk") industrial relations initiative is ongoing with MRC showing a positive effect on industrial relations, with no industrial action during the quarter. The initiative will be extended to Redpath at K5 Shaft, where minor industrial relations incidents did take place, during the next quarter. Although post-leave returns and absenteeism following the festive period had some production impact it showed significant improvement when compared with the previous year.
Stockpile accumulation in preparation for the period alleviated the reduction in mining production with tons processed decreasing by 3% to 1,623,838 tons. Stockpiles at the end of the quarter were 7,229 tons. Relines on the primary and secondary mills were performed at the K2 concentrator.
The head-grade decreased, averaging 2.56 g/t for the quarter. This was due to the increase in off-reef square meters mined, and the consumption of K5 shaft stockpiles which had lower grades due to the higher relative contribution of lower grade development tons.
Recoveries increased to 78.5% due to improvement initiatives in operational stability and control.
PGM production decreased by 4% to 104,920 PGM ounces (Aquarius attributable: 52,460 ounces) a fair performance given the reduction in operating shifts during the period. PGM production for the quarter showed a 5% improvement above the comparable quarter 3 production for the previous year.
Primary development for the quarter was 1,182 metres.
Kroondal: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Mar 2009 62,281 30,728 11,411 500 104,920 52,460 Dec 2008 65,075 32,161 11,941 531 109,707 54,854 Sep 2008 60,634 29,573 11,068 456 101,731 50,866 Jun 2008 49,621 24,054 9,014 372 83,062 41,531 Operating Cash Costs
Cash costs per ton increased by 2% to R323 and costs per PGM ounce increased by 3% to R4,999 as a result of the lower production units due primarily to the fewer working shifts during the quarter. Offsetting this, stringent cost control measures and efficiency improvements mitigated the fixed cost impact associated with the lower mining production.
Gross revenue increased by 183% to R846 m as a result of the stability and recovery in PGM prices and the close-out of negative sales adjustment. As a result, Kroondal Mine shows a positive cash margin for the period of 38% compared to -78% in the previous quarter
Kroondal: Operating Cash Costs per Ounce
4E 6E 6E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu) Kroondal R 4,999 R 4,096 R 3,993 Capital Expenditure
Capital expenditure for the quarter was R58 million, all ongoing capital. Major items included underground mining infrastructure and trackless mobile mining equipment.
P&SA2 at MarikanaSafety
The 12-month rolling average DIIR for the quarter deteriorated from 0.70 in the previous quarter to 0.88 Ten lost time injuries were reported during the quarter. Two incidents resulted in multiple injuries which compounded the impact on the safety measure.
Regrettably a fatal accident occurred in the open pit mining area on 7 January 2009, when Mr Victor Ndou, a mechanical assistant and employee of open pit contractor MCC Contracts, was fatally injured when he was struck by a sliver of metal expelled from a mechanical failure on the undercarriage of an excavator.
AQPSA has concluded the internal investigation but was issued a Section 54 instruction under the Mine Health and Safety Act, 1996. The instruction resulted in a 4-day stoppage of open pit operations. The Department of Minerals and Energy (DME) has yet to complete the enquiry into the accident.
Mining
Production tons decreased by 24% to 564,851 tons, comprising 302,094 tons from underground and 262,758 tons from open pit operations
Head grade decreased by 2% to 2.85 g/t due to higher percentage of underground material
Processing
Tons processed decreased by 11% to 602,137 tons
Recoveries increased by 7% to 70.46%
PGM production decreased by 8% to 38,851 ounces (Aquarius attributable: 19,426 ounces)
Revenue
The achieved mine basket price for the quarter averaged $799 per PGM ounce, 7% higher than the previous quarter. The achieved mine Rand Dollar exchange rate averaged 9.94 for the quarter. Quarterly revenue at Marikana increased by 199% to R323 million (Aquarius attributable: R161 million)
The decrease in production was in part offset by the gains in the basket price. However, revenue normalised as the impact of negative sales adjustments decreased due to stability and recovery in PGM prices with positive sales adjustments realising in March 2009.
Operations
The third quarter, which includes the Christmas and New Year period has 14% less mining shifts than the second quarter due to the number of public holidays and associated shift scheduling. This had an impact on underground production with the total square meters mined decreasing by 9% over the period. It should be noted, however, that the contribution of underground production continues to increase and now accounts for 54% of total production at Marikana.
At the No.1 Shaft, primary development has made good progress showing a 6% increase on the previous quarter helping to offset geological losses. Re-establishment of sections will contribute to improved production in the next quarter. Stoping sections at No. 4 Shaft showed efficiency improvements during the quarter but reef production was adversely affected by the off-reef primary development and a Section 54 instruction following a blasting incident. Consequently, Marikana underground production decreased by 20% to 302,093 tons for the quarter.
Open pit production showed a decline in accordance with the mine plan as Pit A approached the end of its life towards the end of the quarter, with ongoing open pit production from the ROM Pit and South-west Pit. The open pit stripping ratio made good progress, falling from 24:1 to 20:1 in accordance with the pit optimisation and the Pit A completion. Open pit production was also impacted by the lower number of shifts in the period and a Section 54 instruction issued following the fatality in the open pit area. Consequently, the open pit operations showed a quarter-on-quarter decrease of 28% to 262,758 tons.
The 'Areboleleng' (Tswana for "let's talk") industrial relations initiative is ongoing with MRC showing a positive effect on industrial relations, with no industrial action during the quarter. Post-leave returns and absenteeism following the festive period also showed improvement as compared with the previous year.
Stockpile accumulation in preparation for the period would have alleviated the reduction in mining production but concentrator availability was adversely affected by a failure on the ball mill gearbox and motor and a higher frequency of rod culling on the rod mill as a result of liner wear. Tons processed therefore decreased by 11% to 602,137 tons, comprising 307,047 tons from underground and 295,090 tons of open pit material. The rod mill is scheduled for a reline in the next quarter and improvements in plant availability are anticipated. Stockpiles at the end of the quarter were 86,035 tons, consisting predominantly of open pit material.
The head-grade decreased marginally by 2% to 2.85 g/t.
Recoveries made strong improvements, to 70.4% from 66% in the previous quarter, due to the higher relative processing of underground material and the process control and stability initiatives.
PGM production for the quarter decreased by 8% to 38,851 PGM ounces (Aquarius attributable: 19,426), a good performance given the lower number of shifts and indeed, a 38% improvement above the comparable Quarter 3 production for the previous year.
Marikana: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Mar 2009 23,673 10,908 4,034 236 38,851 19,426 Dec 2008 26,193 11,733 4,256 268 42,451 21,226 Sep 2008 24,182 10,609 3,866 226 38,883 19,442 Jun 2008 17,843 7,649 2,769 155 28,416 14,208 Operating Cash Costs
Cash costs per ton increased by 1% to R395, whilst costs per PGM ounce decreased by 2% to R6,124 as a result of a higher consumption of underground material and ongoing improvement initiatives which served to offset the fixed cost impact of the lower production resulting from the fewer working shifts in the period.
Gross revenue increased by 199% to R323 m as a result of the improvement in PGM prices and the associated unwinding of negative sales adjustment. As a result, Marikana Mine shows a cash margin for the period of 26%.
Marikana: Operating Cash Costs per Ounce
4E 6E 6E net of by-products (Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu) Marikana R 6,124 R 5,012 R 4,831 Capital Expenditure
Ongoing capital expenditure totalled R15.3 million. (AQPSA share R7.65 million). This consisted of primarily of underground infrastructure establishment.
Contractor dispute with Moolman Mining
During March 2009, AQPSA and Moolman Mining agreed that the dispute relating to AQPSA resiling from the contract originally concluded between AQPSA and Moolman Mining on the basis of misrepresentation by Moolman Mining and Moolman Mining's conditional counter claims, would be referred to trial and would not be subject to Arbitration. As a result, the original Arbitration instituted by Moolman Mining against AQPSA relating to the application of the rise and fall formula in that contract, will be indefinitely suspended pending the outcome of the trial proceedings. This agreement was made an order of court with the consent of both parties and provisional dates in September 2010 have been allocated for the trial.
Everest Platinum Mine
Mining operations have been temporarily suspended at the Everest mine. On 8 December 2008 the Company announced the temporary suspension of operations at the Everest mine due to subsidence that resulted in geotechnical instability. Management assessed the situation in conjunction with the DME and a section 54 notice under the Mine Health and Safety Act was issued prohibiting normal mining operations but allowing inspection teams to enter the mine and permitting the care and maintenance activities.
The subsidence has subsequently stabilised and no further subsidence (as measured on surface) was evident as from the 10 February 2009 with seismic activity relating to movement in the collapsed area reduced to a state of equilibrium. Investigation teams have been able to assess the extent of the affected area, confirming that the subsidence is confined to mined-out area in the upper, central area of the mine straddling the decline system.
Rock engineering analysis by an independent rock engineering consultant has confirmed that the geotechnical instability is limited to the subsidence area and that further propagation of the area is extremely unlikely. The subsidence has been linked to abnormally high rainfall which preceded the event, with November and December 2008 being two of the three highest rainfall months recorded in 105 years of available meteorological data which affected ground conditions which are specific to the affected area. The investigation confirms that the stoping and development areas were not affected and that operations can be resumed through establishment of new access to the underground workings.
The CSIR Mineral Resources (Council for Scientific and Industry Research), completed a numerical analysis and rock strength testing of the current pillars and these results will be used by the Consulting Rock Engineers' to design a mine layout and regional and support pillars for the unmined areas. A project team is in process with a technical investigation in assessing alternatives to re-establish declines into the underground workings and design a mine plan based on the Rock Engineers' recommendation to safely resume production. It is anticipated that these studies will be completed during the next quarter.
The design that is being favoured at this stage and that eliminates the risk of future geotechnical instability and that will also have the lowest impact on operating cash flow, is the mining of two boxcuts and the related sets of declines (one north and one south) from the previous opencast areas. Apart from creating flexibility, access to the future west reserve and shorter travelling time for people, this option also includes regional pillars for sustainable mining.
AQPSA considers that there is sufficient ground for a combination of insurance claims for subsidence, loss of earnings and clearance and a claim to this effect has been submitted.
While operations are suspended, the monthly fixed cost of keeping the mine on care and maintenance is approximately R5 million. This cost comprises a small team of employees to keep the concentrator plant and underground mine under care and maintenance, fixed network electricity cost and general expenses such as insurance and security.
MIMOSA INVESTMENTS (Aquarius Platinum 50%)
Mimosa Platinum Mine
Safety
The 12-month rolling average DIIR for the quarter improved from 0.17 in the previous quarter to 0.00. No lost time injuries were reported during the quarter.
Mining
Underground production decreased by 1% to 539,004 tons
Head grade slightly decreased 1% to 3.58 g/t
The surface stockpile decreased to a total 520,660 tons at the end of the quarter, equivalent to almost three-months mill feed
Processing
Concentrator plant recoveries decreased to 73.3% from 74%
Total mine production increased by 7% to 46,278 PGM ounces (Aquarius share: 23,139 PGM ounces)
Revenue
The average achieved PGM basket price for the quarter decreased by 31% to $626 per PGM ounce. The average achieved nickel price over the quarter decreased by 34% to $4.75 per pound from $7.15 per pound in the previous quarter. Revenue for the quarter decreased to $30 million, with base metals accounting for approximately 23% of revenue. The cash margin decreased to 24% from 56% in the previous quarter mainly due to falling achieved metal prices.
Operations
During the quarter mining operations hoisted 539,004 tons compared to 546,891 tons in the previous quarter. Tons milled during the quarter totalled 548,320 tons, with 9,316 tons being taken from the stockpile, which totalled 520,660 tons at the quarter end.
The average plant grade marginally de/creased to 3.58 g/t, compared to 3.63 g/t in the previous quarter.
Tons processed totalled 548,320, a 10% increase compared to the previous quarter, due to deferred Phase 5.5 tie in shutdown. The shutdown is now planned for in the fourth quarter.
Recoveries for the quarter slightly decreased to 73.3% from 74.2%.
PGM production during the quarter increased by 7% to 46,278 ounces (Aquarius attributable: 23,139 ounces).
Mimosa: PGMs in concentrate produced (ounces)
Quarter ended Pt Pd Rh Au PGMs Attributable to Aquarius Mar 2009 23,590 17,905 1,797 2,986 46,278 23,139 Dec 2008 21,903 16,678 1,753 2,898 43,232 21,616 Sep 2008 22,113 16,863 1,770 2,892 43,638 21,819 Jun 2008 19,532 14,821 1,535 2,628 38,517 19,258
Mimosa: Base Metals in concentrate produced (tons)
Mine Production Attributable to Aquarius Quarter ended Ni Cu Co Ni Cu Co Mar 2009 659 545 18 329.5 272.5 9 Dec 2008 615 497 18 307.5 248.5 9 Sep 2008 602 498 17 301 249 8.5 Jun 2008 533 439 15 266 219 7 Operating Cash Costs
Cash costs per ROM ton increased by 2% to $42, whilst costs per PGM ounce increased by 6% to $499. The increase in cash costs for the quarter was attributable to a change in remuneration policy from a Zimbabwean dollar denominated salary base to a US dollar denominated salary base. The liberalisation of foreign currency trading, resulted in a change in services provision tariffs and these are negatively affecting the Mine's costs base, notably new power, water, telephone, license and rates tariffs which have now been dollarised.
The gross cash margin decreased to 24% from 56% in the previous quarter mainly due to falling achieved mine PGM basket prices. Net of by-products, cash costs were $326 per PGM ounce, compared to $181 per PGM ounce in the previous quarter, primarily due to a fall in the prices of base metals.
Mimosa 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) Mimosa $499 $475 $326
Update on Foreign Currency Regime in Zimbabwe
The National Budget and Monetary Policy Statement announced in January 2009 liberalised foreign currency trading in the economy. As a result all companies including parastatals, are now billing in foreign currency. All taxes are also payable in foreign currency. No prior exchange control approvals are now required to trade or remunerate employees in foreign currency. Credit lines and foreign currency supply in the economy however remains a challenge. There are currently a lot of pricing distortions in the economy which are beginning to self-correct.
AQUARIUS PLATINUM (SA) CORPORATE SERVICES (PTY) LTD
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum 50%)
Safety
The DIIR improved to 0 from 4.80 in the previous quarter. No lost time accidents were recorded.
Processing
Material processed increased marginally to 51,000 tons
Grade decreased 5% to 2.15 g/t
Recoveries decreased by 8% to 44%
Production decreased to 1,587 PGM ounces (Aquarius attributable: 793 PGM ounces)
Revenue
The achieved mine basket price for the quarter averaged 859 per PGM ounce, 5% higher than the previous quarter. The achieved mine Rand Dollar exchange rate averaged 9.94 for the quarter.
The decrease in production was in offset by the gains in the basket price and the reduction in operating cost with quarterly revenue increasing by 14% to R6.9 million (Aquarius attributable: R3.4 million).
Operations
Material processed increased to 51,000 tons. This is due to repositioning of the reclamation facilities on the chrome dump source.
The head grade decreased 5% to 2.15g/t as a result of grade variances within the chromite dump source material.
Recoveries decreased 8% to 44% due to the lower head grade and a breakdown on the Deswick mill, which resulting in the mill being bypassed. The problem has been rectified and improved recoveries is expected in the next quarter.
This resulted in production down 9% to 1,587 PGM ounces (Aquarius attributable: 793 ounces). This decrease in production was due to the lower feed grade.
CTRP: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs (4E) Mar 2009 966 351 267 3 1,587 Dec 2008 1,078 404 297 4 1,784 Sep 2008 1,077 388 295 4 1,764 Jun 2008 1,254 452 333 5 2,044 Operating Costs
Cash costs decreased by 39% to R2,043 per PGM ounce, a significant fall due to cost reductions as well as a reversal of unrealised expense accruals made during prior periods. The cash margin for the period of was 53%, an increase from -2% in the previous quarter.
CTRP 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 R 2,043 R 1,385 R 1,361
Platinum Mile (Aquarius Platinum 50%)
The effective date of the acquisition of the 50% interest in Platinum Mile was March 1 2008.
Safety
The DIIR was zero for the quarter. No lost time accidents were recorded.
Processing
Tailings processed remained very constant compared to the previous quarter at 2,009 million tons
PGM grade was 0.65 g/t
Production was 2,788 PGM ounces (Aquarius attributable: 1,394 PGM ounces)
Revenue
The achieved mine basket price for the quarter averaged $810 per PGM ounce, 36% higher than the previous quarter, helping to offset lower production. The achieved mine Rand Dollar exchange rate averaged 9.92 for the quarter. Quarterly revenue decreased by 22% to R25 million (Aquarius attributable: R12.5 million).
Production levels continue to be seriously impacted during the expansion of fine milling capacity due to ongoing commissioning issues with the two new ultra-fine grind mills. It is anticipated that the issues will be resolved during the fourth quarter, paving the way for a ramp up to full annual production of 35,000 PGMs during the 2010 financial year.
Operations
Total feed for the quarter was 2,009,000 tons, a 3,000 ton increase compared to the previous quarter.
During the quarter the feed head grade decreased marginally to 0.65 g/t compared to 0.67 g/t the previous quarter.
Recoveries remained constant at 7% compared to the previous quarter.
As a result, production decreased 10% to 2,788 PGM ounces (Aquarius attributable: 1,394 ounces).
Target production at Platinum Mile remains 35,000 per annum. It is estimated that full monthly production rates will be achieved by July 2009.
Platinum Mile: Metal in concentrate produced (PGM ounces)
Quarter ended Pt Pd Rh Au PGMs (4E) Mar 2009 1,617 864 251 56 2,788 Dec 2008 1,799 962 279 63 3,103 Sep 2008 3,470 1,855 538 120 5,983 Jun 2008 2,920 1,561 453 101 5,035 Operating Costs
Cash costs increased 3% to R5,519 per PGM ounce.
Platinum Mile 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) Platinum Mile R 5,519 nm nm Capital Expenditure
Capital expenditure for the quarter was R15.2 million. The expansion and fine milling project budget of R59 million remains on target, with the total spent to date to R55 million, with R4 million remaining in the fourth quarter to June 2009.
CORPORATE MATTERS
Announcement and completion of equity placing
On 26 March 2009 Aquarius announced the placement of 46,330,000 new common shares in the Company (the "Placing Shares") were placed by Merrill Lynch International and Euroz Securities Limited at a price of £1.80, or A$3.75 per placing share, raising gross proceeds of approximately £83.4 million. The placing shares issued represent approximately 14.2% of Aquarius' issued common share capital prior to the placing. Placement funds were received subsequent to the end of the quarter following the issue and allotment of the placement shares to placees on 1 April 2008. More information can be found at www.aquariusplatinum.com.
Launch of Rights Issue
On 27 March 2009, subsequent to the successful equity placing, Aquarius announced a fully underwritten 1 for 9 rights issue to raise gross proceeds of approximately £47.7 million, through the issue of 41,491,737 new common shares, representing 10% of the enlarged issued common share capital of Aquarius, at a price of £1.15 pence, A$2.39 or ZAR15.83 per new common share. More information and a full prospectus can be found at www.aquariusplatinum.com.
Launch of Placement of up to R650 million secured convertible bonds
On 27 March 2009 following the placing of common shares of Aquarius and the announcement of a proposed rights issue, Aquarius also announced its intention to raise up to R650 million by way of a convertible bond issue, of which R500 million will be fully underwritten by Rand Merchant Bank, a division of FirstRand Bank Limited ("RMB"). More information can be found at www.aquariusplatinum.com.
Recommended All-Share Offer for Ridge Mining plc
On 27 March 2009 Aquarius Platinum Limited and Ridge Mining plc announced that they signed an Implementation Agreement for the possible recommended all-share offer for Ridge by Aquarius. Under the terms of the Implementation Agreement, and subject only to the satisfaction or waiver of the announced pre-conditions Aquarius has agreed to make an all share offer for the entire issued and to be issued share capital of Ridge. More information can be found at www.aquariusplatinum.com.
Aquarius Platinum LimitedIncorporated in BermudaExempt company number 26290Board of DirectorsNicholas 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 Non-executive
Audit/Risk CommitteeSir 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 ManagementStuart Murray Executive Chairman Hugo H¶ll Managing Director H©l¨ne Nolte Director: Finance Hulme Scholes Commercial Director Anton Lubbe Operations Director: West Anton Wheeler Operations Director: East
Graham Ferreira General Manager: Group Admin & Company Secretary
Mkhululi Duka General Manager: Group Human Resources & Transformation Wessel Phumo General Manager: Marikana Jacques Pretorius General Manager: Everest Gabriel de Wet General Manager: Engineering
ACS (SA) Management
Paul Smith Director: New Business
Mimosa Mine Management
Winston Chitando Managing Director Herbert Mashanyare Technical Director Peter Chimboza Operations Director Fungai Makoni Finance Executive & Company Secretary Issued Capital
At 31 March 2009, the Company had in issue: 327,095,634 shares fully paid common shares and 1,680,305 unlisted options. It should be noted that subsequent to the end of the quarter, on 1 April 2009, there was a placement of 46,330,000 shares. Consequently, the number of fully paid common shares in issue following the placement is 373,425,634. The number of fully paid common shares in issue following the rights issue will be 414,917,371.
Substantial Shareholders 31 March 2009 Number of Shares Percentage
Savannah Consortium 61,792,856 18.89%
HSBC Custody Nominees (Australia) Limited 24,395,110 7.46%
Nutraco Nominees Limited 20,569,148 6.29% Chase Nominees Limited 16,763,933 5.13% Trading InformationISIN number BMG0440M1284ADR ISIN number US03840M2089Broker (LSE) (Joint) Broker (ASX) Sponsor (JSE) Merrill Lynch Euroz Securities Investec Bank Limited International Level 14, The Quadrant 100 Grayston Drive 2 King Edward St 1 William Street, Perth Sandown, Sandton 2196 London, EC1A 1HQ WA 6000 Telephone: +27 (0)11 Telephone: +44 (0)20 Telephone: +61 (0)8 9488 286 7326 7628 1000 1400 Investec Securities Limited Investec Bank plc 2 Gresham St, London, EC2V 7QP Telephone: +44 (0)20 7597 5970
Aquarius Platinum (South Africa) (Proprietary) Ltd
100% Owned (At 31 March 2009)
(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 2050 Facsimile: +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, Australia
Postal Address PO Box 485, South Perth, WA 6151, Australia
Telephone: +61 (0)8 9367 5211 Facsimile: +61 (0)8 9367 5233 Email: [email protected]
For further information please visit aquariusplatinum.com or contact:
In AustraliaWilli Boehm+61 (0)8 9367 5211
In the United Kingdom and South Africa
Nick Bias+ 41 (0)79 888 [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 BEE Black Economic Empowerment CTRP Chromite Ore Tailings Retreatment Operation. Consortium comprising Aquarius Platinum (SA) (Corporate Services) (Pty) Limited (ASACS), Ivanhoe Nickel and Platinum Limited and Sylvania South Africa (Pty) Ltd (SLVSA). 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 Reserves code 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 nm Not measured NOSA National Occupational Safety Association NUM South African National Union of Mineworkers PGE(s) Platinum Group Elements plus Gold. Five metallic elements commonly (6E) 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 Ridge Ridge Mining plc 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
vendorRelated Shares:
AQP.L