Aquarius Platinum Limited
Financial and Production Results to 31 March 2015
Highlights
Attributable production for the quarter from operating mines was 84,792 PGM
ounces - 6% higher compared to the previous corresponding period ended March
2014 (pcp), quarter-on-quarter production decreased 5% due to a shorter
production quarter
Group production for year to date remains ahead of guidance
Cash costs increases at Kroondal remained below inflationary targets increasing
1% for the nine months ended March 2015 compared to the nine months ended March
2014, although quarter-on-quarter costs increased 7%, driven by less production
shifts and stock pile reduction over Christmas holidays
Cash costs at Mimosa significantly lower, 8% for the nine months ended 31 March
2015 compared to the nine months ended March 2014, while quarter-on-quarter
costs increased 2%
Average PGM basket price decreased 4% quarter-on-quarter in Dollar terms, down
9% compared to the pcp
The Rand weakened against the US Dollar by 5% on average quarter-on-quarter -
down 8% compared to pcp
Revenue down 2% to $50 million (Q2 2015: $51 million) in line with lower
production and low prices
Mine EBITDA marginally up at $4.4 million (Q2 2015: $3.6 million), down $6.7
million compared to pcp due to a $6 million negative sales adjustment caused by
lower PGM prices
Attributable cash balance increased by $2 million during the quarter to $174
million (of which $13 million is held in JV entities)
Q3 2015 Operating Results
Summary
Kroondal Mimosa Platinum Mile
4E PGM Production
Total (100% basis) 107,089 57,391 2,552
Attributable 53,544 28,696 2,552
4E Basket Price
R/oz 12,446 12,187
$/oz 1,062 1,036 1,039
Cash Costs (4E
basis)
R/oz 9,560 9,327
$/oz 815 799 795
Cash Margin (%) 6 21 3
Stay-in-Business
Capex
R/oz 698 0
$/oz 90 119 0
Commenting on the results, Jean Nel, CEO Aquarius Platinum said:
Despite the challenging operating and macro environment, Aquarius recorded
another credible operating result and made progress on a number of strategic
initiatives during the quarter. Most importantly both Kroondal and Mimosa
delivered production ahead of guidance and managed to contain annualised cost
increases well below inflation, whilst continuing to improve its longer term
safety record.
Kroondal delivered a record 9th consecutive quarter of PGM production in excess
of 105,000 ounces with annualised cost increases well below inflation, a
credible result that could have been much better had it not been for the
113,000 tonnes of lost production (valued at R73 million) due to six Section 54
stoppages imposed on Kroondal by the DMR in the quarter.
In Zimbabwe, Mimosa's strong production record continued uninterrupted while
costs were maintained below $800 PGM ounce for the second consecutive quarter.
The combined operational efforts at Kroondal and Mimosa contributed to the
company increasing its cash levels slightly to $174 million on an attributable
basis, despite the Dollar metal basket price reducing during the quarter by 4%.
During the quarter work on fulfilling the conditions precedent to the sale of
the Everest mine to Northam, first announced on 10 February 2015, also
continued and Part A of the sale become unconditional on 22 April 2015 with the
result that Aquarius is entitled to receive the Part A proceeds of R400 million
on 26 June 2015.
A critical work stream during the quarter entailed the three platinum producers
in Zimbabwe continuing their engagement with the Government of Zimbabwe aimed
at resolving the 15% royalty on the export of unrefined platinum which was
introduced in January 2015. Although not yet resolved Aquarius is satisfied
with progress made to date and remain optimistic that the matter will be
resolved in due course.
Management's focus in the short term will remain consistently on maintaining
safety, production and cost discipline, a view informed by our assessment that
at a macro level there is little suggesting that Dollar metal prices may
strengthen materially in the short term.
Production by mine
Quarter ended
PGMs (4E)
Mar 2015 Dec 2014 % Change Mar 2014 % Change
Kroondal 107,089 111,115 (4) 107,818 (1)
Mimosa 57,391 60,842 (6) 51,907 11
Platinum Mile 2,552 2,996 (15) 289 783
Total 167,032 174,953 (5) 160,014 4
Production by mine attributable to Aquarius (Operating mines)
Quarter ended
PGMs (4E)
Mar 2015 Dec 2014 % Change Mar 2014 % Change
Kroondal 53,544 55,557 (4) 53,909 (1)
Mimosa 28,696 30,421 (6) 25,954 11
Platinum Mile 2,552 2,996 (15) 289 783
Total 84,792 88,974 (5) 80,152 6
Aquarius Group quarterly attributable production (PGM ounces) to 31 March 2015
See www.aquariusplatinum.com for graph
Market Summary
After an initial rise at the start of January, the price of platinum continued
its recent downward trend falling to its lowest level in over 5 years, ending
the quarter at $1,141 per ounce (down 6%). Palladium also struggled across the
quarter, weighed down by a weak end to March which saw the metal finish 8%
lower over the period closing at $736 per ounce.
More recently, Platinum imports into China fell by 58% year on year to 91.2koz
across the last week of March, the weakest since November 2008, impacted in
particular by a lack of demand for jewellery from China. Given the weakness in
China's recent trade data and the weak volumes on the Shanghai Gold Exchange,
the near term looks uncertain for platinum, but in the longer term demand
outside of the jewellery sector should provide support for prices. Gold prices
finished the quarter marginally higher after rallying throughout January to
highs of $1,300 per ounce, however a sharp fall in February saw the metal close
only 0.2% higher over the quarter at $1,184 per ounce.
Palladium along with the rest of the PGM complex suffered as evident from the
latest weekly import data - Palladium imports fell 54% year on year to 33.2koz
in the last week of March, the lowest since January 2009. Palladium imports
have trended lower since the middle of last year as auto sales growth slowed,
falling 0.2% in February year on year, declining for the first time since
February 2013. The precious metal did however form a small rally during the
period climbing to $829 per ounce by early March, however this was not
sustained moving back into negative territory.
The average Rand-Dollar exchange rate weakened during the quarter by 5% from
R11.53 to R12.14. Since then, the Rand has weakened further 1% in the first
two weeks of April, and trending around a level of R12.2.
12-month individual PGM prices to March 2015 (US$/oz)
12-month PGM basket prices to March 2015
(US$ and ZAR per PGM basket ounce)
12-month Rand-Dollar exchange rate to March 2015
(ZAR/US$)
See www.aquariusplatinum.com for graph
Average PGM basket prices achieved at Aquarius operations
Quarter ended
US$ per PGM ounce (4E)
Mar 2015 Dec 2014 % Change Mar 2014 % Change
Kroondal 1,062 1,090 (3) 1,179 (10)
Mimosa 1,036 1,100 (7) 1,112 (7)
Platinum Mile 1,039 1,090 (5) 1,179 (12)
Weighted Avg. 1,053 1,097 (4) 1,157 (9)
Financials
Aquarius recorded an on-mine EBITDA profit of $4.4 million from controlled
entities for the quarter ended 31 March 2015, marginally higher compared to the
December 2014 quarter. This was despite a 5% reduction in production in the
March quarter, a shorter production quarter due to the seasonal holidays.
Compared to the pcp (March 2014) EBITDA was adversely impacted by $6 million
adverse negative sales adjustments. The result reflects the material impact
price decreases have on cash flows and results in the present low PGM price
environment. Aquarius recorded a consolidated accounting net loss after tax
(IFRS) of $8 million for the quarter.
Profit & Production Summary
March 2015 Quarter Aquarius JV Total Consolidation Aquarius
operations entities adjustment Group
Mine EBITDA $4.4M $8M $12.4M ($8M) $4.4M
Revenue $50.2M $32M $82.2M ($32M) $50.2M
Cost of sales ($51.2M) ($29M) ($80.2M) $29M ($51.2M)
Net profit/(loss) ($6.3M) ($1.8M) ($8.1M) - ($8.1M)
after tax
PGM ozs production 56,096 28,696 84,792 - 84,792
Revenue was 2% lower quarter on quarter on lower production (due to a shorter
production quarter) and lower prices. Compared to the pcp, revenue was $10
million lower despite an increase in production due to $6 million adverse sales
adjustments caused by decreasing prices. In Rand terms, PGM prices were 1%
lower compared to the pcp and 9% lower in Dollar terms due to a weaker Rand
which depreciated 8% compared to the pcp.
Group production for the quarter was 6% higher compared to the pcp and remains
within guidance for the year. On a quarter on quarter comparison, production
was 5% lower due to the March quarter having less working days due to seasonal
holidays. The Kroondal mine continued to excel maintaining production in excess
of 105,000 PGM ounces (50% attributable to Aquarius) by drawing from stockpile
to mitigate lower production shifts due to the Christmas holiday period.
Production at joint venture entity Mimosa remained strong up 10% compared to
the pcp. Production at PlatMile which resumed in July 2014 and yet to achieve
steady state production was down 15% in the quarter because of planned
maintenance.
Total cost of sales of $51 million was 7% lower compared to the pcp, despite a
6% increase in production, due to a 8% weakening in the Rand/Dollar exchange
rate. In Rand terms, total cost of sales was 1% higher compared to the pcp.
Kroondal's unit costs for the nine months to 31 March 2015 remain within
inflationary targets having increased 1% compared to the pcp. For the quarter
under review, Kroondal's cash costs per ounce in Rand terms increased 7%
quarter on quarter but only 2% in Dollar terms due to the weaker Rand. This
increase in costs was driven primarily by lower production than the record
December quarter, resulting in (as previously guided) increase in reportable
cash costs from the treatment of the ore stock pile during the December
Christmas break. The good production performance at Kroondal was achieved
notwithstanding the mine encountering a number of operational challenges.
Mimosa's unit costs of $799 per PGM ounce for the nine months to 31 March 2015
were 8% lower compared to the pcp in line with efficiency initiatives
introduced during the financial year. For the quarter under review, cash costs
per PGM ounce were $799, a 2% increase quarter on quarter. The 2% increase in
unit costs was due to reduced PGM production (6%) as a result of planned plant
maintenance and a shorter production quarter due to the Christmas holidays.
These challenges notwithstanding Mimosa's production levels continue to exceed
company guidance.
Administrative costs of $1.4 million (of which $0.2 million was non-cash) are
in line with previous quarters, maintaining cost reduction initiatives
previously implemented. Depreciation and amortisation for the quarter of $4.7
million was lower due to an increased resource base resulting from the
extension of Kroondal's mine life, as previously announced. Finance costs
include interest paid on borrowings of $1.4 million, non-cash interest
accretion on convertible bonds of $1.2 million and the unwinding of the
rehabilitation provision of $1.1 million. Finance costs for the quarter were
46% lower compared to the pcp following the $172.6 million bond buy back in May
2014.
Net operating cash outflow for the quarter of $4 million comprised $52 million
inflow from sales, $58 million paid to suppliers and $2 million interest
received. Development and capital expenditure for the quarter was $5 million.
Net financing cash inflows of $8 million related to proceeds from AQPSA finance
leases.
The Group's cash balance of $161 million at the end of the quarter was held as
follows:
AQP $108 million
AQPSA $48 million
ASACS $1 million
Platmile $2 million
Ridge Mining $2 million
Total $161 million*
* Mimosa and Blue Ridge (in which Aquarius has a 50% equity interest) are
accounted for using the equity method. Cash held in these two entities at 31
March 2015 was $26 million and does not form part of the above cash balances.
Under the previous method of proportionately consolidating its investment in
Mimosa and Blue Ridge, 50% of this cash ($13 million) would have been included
in Aquarius' Group cash balance.
Joint venture entities
Mimosa
Mimosa recorded an EBITDA profit attributable to Aquarius of $8 million and a
net profit before tax of $1.8 million for the quarter. The result was achieved
on production of 28,696 PGM ounces attributable to Aquarius.
Mimosa is in discussions with the authorities to have royalties deemed
deductible for tax purposes. The tax liability relating to the non-
deductibility of royalties as at March 2015 (on a 100% basis) was $7.7m ($4.2m
prior year and $3.5m current year). The liability has been accrued in the
financials awaiting the finalisation of negotiations with the authorities and
any legislative amendments.
Cash held in Mimosa at 31 March 2015 was $25 million (100%).
Blue Ridge and Sheba's Ridge
Blue Ridge and Sheba's Ridge recorded a net loss after tax of $0.2 million for
the quarter representing care and maintenance costs incurred.
(The segment note provided on page 10 details the income statement for each
operating division of the Aquarius Group.)
Consolidated Income Statement
Quarter ended 31 March 2015
$'000
Nine
Quarter months Financial Year
Ended Ended
Ended
Note 31/03/15* 31/03/15* 30/06/14
PGM production - Kroondal & 56,096 172,607 220,961
Platmile
PGM production - Mimosa 28,696 88,016 110,681
Total PGM production 84,792 260,623 331,642
Revenue (i) 50,241 163,504 233,056
Cost of sales (including D&A) (ii) (51,203) (160,929) (231,158)
Gross profit/(loss) (962) 2,575 1,898
Other income 41 151 174
Administrative costs (iii) (1,417) (4,655) (7,353)
Foreign exchange gain/(loss) (iv) 164 (239) 1,843
Finance costs (v) (3,783) (11,597) (28,091)
Impairment losses (253) (827) (3,084)
Profit on repurchase of bonds - - 10,925
Profit on sale of assets 13 1,139 653
Closure, transition and rehabilitation - - 5,342
reversal/(cost)
Share of (loss)/profit from joint (vi) (1,783) (50,970) 5,055
venture entities
Loss before income tax (7,980) (64,423) (12,638)
Income tax expense (vii) (122) (415) (544)
Net loss (8,102) (64,838) (13,182)
Net loss is attributable to:
Equity holders of Aquarius Platinum (8,069) (64,900) (13,048)
Limited
Non-controlling interests (viii) (33) 62 (134)
(8,102) (64,838) (13,182)
Earnings per share
Basic loss per share (cps) (0.49) (4.42) (1.38)
* Unaudited
Notes on the March 2015 Consolidated Income Statement
Revenue for the quarter of $50 million was 2% lower than the previous quarter
due to lower production and $2 million negative sales adjustments
Cost of sales of $51 million for the quarter was 4% lower in line with lower
production (down 5%) compared to the previous quarter December 2014
Administrative costs for the quarter of $1.4 million are in line with previous
periods in the current financial year. Costs for the nine months ended March
2015 includes $0.6 million of non-cash expenses
The foreign exchange gain is attributable to revaluation adjustments on cash
balances held in Rand, Australian Dollars and Pound Stirling, and the
revaluation of pipeline debtors in line with movements in the Rand against the
US Dollar
Finance costs include interest paid on borrowings of $1.4 million, non-cash
interest accretion on convertible bonds of $1.2 million and the unwinding of
the rehabilitation provision of $1.1 million
Represents share of (loss)/profit of Mimosa and Blue Ridge, the joint venture
entities. Cumulative share of (loss)/profit from joint venture entities
comprises operating profit of $4 million offset by impairment of Blue Ridge/
Sheba's Ridge of $26 million and discounting of the RBZ receivable of $28.5
million. An accrual of $3.8 million has been taken up for income tax payable
pending conclusion of discussions with the authorities on the tax deductibility
of mine royalties.
Income tax expense consists of AQPSA deferred tax and royalties
Non-controlling interests reflect the 8.3% non-controlling interest of Platinum
Mile Resources (Pty) Ltd
Consolidated Statement of Cash Flows
Quarter ended 31 March 2015
$'000
Quarter Nine
months Financial Year Ended
Ended ended
Note 31/03/15* 31/03/15* 30/06/14
Net operating cash (outflow)/inflow (i) (4,075) 1,948 21,092
Net investing cash (outflow)/inflow (ii) (4,870) 9,885 (27,224)
Net financing cash inflow (iii) 8,393 22,009 62,271
Net decrease/(increase) in cash held (552) 33,842 56,139
Opening cash balance 164,211 136,820 77,773
Exchange rate movement on cash (3,040) (10,043) 2,908
Closing cash balance (iv) 160,619 160,619 136,820
* Unaudited
Notes on the March 2015 Consolidated Statement of Cash Flows
Net operating cash flow for the quarter includes $52 million inflow from sales,
$58 million paid to suppliers and $2 million interest received
Comprises $5 million of development and plant & equipment expenditure at AQPSA
Consists of proceeds from AQPSA finance leases
Mimosa and Blue Ridge (in which Aquarius has a 50% equity interest) are
accounted for using the equity method
Cash held in these two entities at 31 March 2015 was $26 million and does not
form part of the above cash balances. Under the previous method of
proportionately consolidating its investment in Mimosa and Blue Ridge, 50% of
this cash would have been included in the Aquarius' Group cash balance
Consolidated Balance Sheet
At 31 March 2015
$'000
As at As at
Note
31/03/15* 30/06/14
Assets
Cash and cash equivalents 160,619 136,820
Current receivables (i) 29,125 30,104
Other current assets (ii) 12,505 15,246
Investments in joint venture entities (iii) 151,633 230,410
Mining assets (iv) 191,310 209,211
Intangible asset (v) 46,799 54,499
Other non-current assets (vi) 40,450 41,185
Total assets 632,441 717,475
Liabilities
Current liabilities (vii) 157,354 40,123
Non-current interest-bearing liabilities (viii) 1,651 118,919
Other non-current liabilities (ix) 78,762 84,665
Total liabilities 237,767 243,707
Net assets 394,674 473,768
Equity
Issued capital 75,134 73,216
Treasury shares (25,872) (26,239)
Reserves 765,053 781,692
Accumulated losses (425,350) (360,450)
Total equity attributable to equity holders of
Aquarius Platinum Limited 388,965 468,219
Non-controlling interests (x) 5,709 5,549
Total equity 394,674 473,768
* Unaudited
Notes on the March 2015 Consolidated Balance Sheet
Reflects debtors receivable on PGM concentrate sales
Reflects PGM concentrate inventory, consumables, stores and critical spares
Represents the investment in Mimosa, Blue Ridge and Sheba's Ridge. Reduction in
investments in joint venture entities reflects impairment of Blue Ridge/Sheba's
Ridge of $26 million and discounting of the RBZ receivable of $28.5 million as
reported in December 2014.
Includes Group mining assets at Kroondal, Marikana, Everest, CTRP and Platmile
Includes intangibles relating to contract value acquired on the acquisition of
equity interest in Platinum Mile Resources (Pty) Ltd
Includes the recoverable portion of the rehabilitation provision from Anglo
Platinum of $9 million, carrying amount of receivable from Blue Ridge $5
million, investments in rehabilitation trusts of $14 million and deferred tax
assets of $12 million
Includes convertible bonds of $121 million, trade creditors of $27 million,
AQPSA finance leases of $2 million, tax payable of $3 million and annual leave
provision of $4 million
Comprises AQPSA equipment leases of $2 million
Includes deferred tax liabilities of $16 million, provision for closure costs
of $61 million and other payables $2 million
Reflects the 8.3% non-controlling interest of Platinum Mile Resources (Pty) Ltd
Segment Note
Quarter ended 31 March 2015
$'000
Kroondal Marikana Everest Mimosa Plat CTRP
Mile
Revenue 46,895 53 23 31,959 2,007 17
Cost of sales
- mining, processing and administration (43,640) (287) (553) (23,557) (2,024) (4)
- depreciation and amortisation (4,934) (13) 950 (5,258) (648) (47)
Gross profit/(loss) (1,679) (247) 420 3,144 (665) (34)
Other income - - (329) - -
Administrative costs - - - - - -
Foreign exchange gain/(loss) 2,316 - - (4) 110 -
Finance costs - - - - - -
Impairment losses - - - - - -
Profit on sale of assets - - - - - -
Community share ownership trust - - - (1,050) - -
Share of loss from joint venture entities - - - - - -
Profit/(loss) before income tax 637 (247) 420 1,761 (555) (34)
Income tax (expense)/benefit - - - - - -
Net profit/(loss) from ordinary activities 637 (247) 420 1,761 (555) (34)
On-mine EBITDA 5,180 (266) (534) 7,996 79 (4)
Blue Corporate/ Segment Reconciliation Consolidated
Ridge
Unallocated Result to
Consolidated
Information
Revenue 9 1,246 82,209 (31,968) 50,241
Cost of sales
- mining, processing and administration (183) - (70,248) 23,740 (46,508)
- depreciation and amortisation - (3) (9,953) 5,258 (4,695)
Gross profit/(loss) (174) 1,243 2,008 (2,970) (962)
Other income 4 37 (288) 329 41
Administrative costs - (1,446) (1,446) 29 (1,417)
Foreign exchange gain/(loss) - (2,259) 163 1 164
Finance costs - (4,691) (4,691) 908 (3,783)
Impairment losses - (253) (253) - (253)
Profit on sale of assets - 13 13 - 13
Community share ownership trust - - (1,050) 1,050 -
Share of loss from joint venture entities - - - (1,783) (1,783)
Profit/(loss) before income tax (170) (7,356) (5,544) (2,436) (7,980)
Income tax (expense)/benefit - (2,558) (2,558) 2,436 (122)
Net profit/(loss) from ordinary activities (170) (9,914) (8,102) - (8,102)
On-mine EBITDA (179) - 12,272 (7,825) 4,447
Income tax expense for the nine months to March 2015 includes a $1.8m accrual
for non-deductibility of royalties at Mimosa.
Operating Review Summary (all numbers on 100% basis)
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum - 100%)
P&SA 1 at Kroondal (Aquarius Platinum - 50%)
12-month rolling average DIIR per 200,000 man hours deteriorated slightly to
0.65 from 0,62
Production decreased to 1,576,000 tonnes from 1,807,000 tonnes predominantly
due to section 54 stoppages and the less production shifts due to the year-end
holidays
Head grade improved from 2.41 g/t to 2.46 g/t
Recoveries improved by 1% to 80%
Volumes processed decreased to 1,688,000 tonnes, down 7% quarter-on-quarter
Stockpiles at the end of the quarter totalled approximately 47,000 tonnes, down
113,000 tonnes
PGM production decreased by 4% to 107,089 PGM ounces
Revenue increased by 4% to R1,093 million quarter-on-quarter due to weakening
of the exchange rate
Mining cash costs increased by 11% to R606 per tonne, due to lower volumes and
stock pile milling during the Christmas holidays. Unit cost per PGM ounce only
increased by 7% to R9,560 per PGM ounce due to improved quality
Kroondal's cash margin for the period increased from 5% to 6% due to an
improved Rand basket price
Kroondal: Production, Cash Cost and Price Analysis
See www.aquariusplatinum.com for graph
Commentary
There were no fatalities during the quarter. The number of injuries decreased
from 29 to 16 quarter on quarter and the 12 Rolling DIIR Rate deteriorated from
0.62 to 0.65. The deterioration in safety took place despite a focused safety
campaign throughout the quarter. Safety campaigns were re-energised in January
2015. During the quarter, six Section 54 instructions were issued resulting in
approximately 113,000 tonnes of lost production.
Tonnes mined for the quarter was 13% lower at 1,676,000 tonnes due primarily to
the six Section 54 instructions issued by the DMR. In spite of these factors,
Kroondal achieved its ninth consecutive +105,000 PGM production quarter.
Operations at K6 Shaft remained challenging due to poor ground which
necessitated rehabilitation in order to get the belt infrastructure installed
as well as high incidence of poor ground conditions in the stoping panels.
Kwezi shaft experienced poor ground conditions which resulted in all ends being
reduced for safety. Simunye shaft replaced part of its old generation fleet
load haul dumpers, as well as engineering organisational changes. Efficiencies
continue to be pursued with the critical focus being the management of the TMM
fleet. Bambanani is scheduled to have its chairlift commissioned in Q4 in
order to reduce face time lost due to long travelling to the working places.
Kopaneng shaft experienced some poor ground challenges in the decline as well
as the western part of the mine, which resulted in some ventilation challenges.
Various trials to mitigate the treating of iron-rich ultramafic pegmatite
(IRUP) ore being mined at Kwezi has resulted in potential solutions comprising
blending the material, changing reagents and increasing the floatation
retention time in the process plants. Recoveries improved by 1% quarter on
quarter. Further work will continue in Q4 2015.
A recognition agreement was concluded with AMCU in January 2015, negotiations
of which were conducted in a cordial manner.
P&SA2 at Marikana (Aquarius Platinum - 50%)
There has been no change to the Marikana operations which remain on care and
maintenance until further notice.
Everest Mine
There has been no change to the Everest operations which remains subject to the
conclusion of a sale contract. The conditions precedent to Part A of the sale
agreement were fulfilled on 22 April 2015 which results in Aquarius being
entitled to the Part A proceeds of R400 million by 26 June 2015. The fulfilment
of the additional condition required to render Part B unconditional, being
Section 11 approval by the DMR, is expected to materialise before the end of
the 2015 calendar year following which Aquarius would be entitled to a further
R50 million.
AQPSA Operating cash costs per ounce (Rand)
4E 6E 6E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu)
Kroondal 9,560 7,835 7,642
Capital expenditure
Kroondal
(R'000 unless otherwise stated) Total Per 4E oz
Ongoing establishment of infrastructure 69,854 652
Project capital (K6 shaft) 4,853 45
Mobile equipment 40,866 382
Total 115,573 1,079
Kroondal mine: reconciliation of cash costs per 4E ounce
Cost per 4E ounce
(Rand)
Q2 2015 Q3 2015
Total operating expenditure 10,213 10,106
Less:
Ongoing capital expenditure & mobile equipment (1,195) (1,034)
Project capex (K6 shaft) (59) (45)
Transferred (to)/from stockpile (34) 533
On mine cash costs 8,925 9,560
MIMOSA INVESTMENTS (Aquarius Platinum - 50%)
Mimosa Platinum Mine
12-month rolling average DIIR was constant at 0.05 per 200,000 man hours worked
Production decreased by 8% to 610,929 tonnes as result of lower operating days
(82 days) in the third quarter compared to 88 days worked in the 2nd quarter.
This was due to 4 public holidays in the third quarter as well as a shorter
February month (2 days less)
Head grade improved slightly to 3.65 g/t
Recoveries improved to 78.7% from 78.3% in the second quarter
Volumes processed deteriorated by 7% to 621,586 tonnes as result of lower
milling days (81 days) in the third quarter compared to 84 days worked in the
2nd quarter. The milling days were affected by a shorter February month as well
as planned maintenance shut downs in the third quarter
Stockpile at the end of the quarter was approximately 170,600 tonnes
PGM production deteriorated by 6% to 57,391 PGM ounces in line with reduced
milled volumes as explained above
Revenue was the same as the previous quarter
Mining cash costs per tonne increased to $75 in line with reduced milled
tonnage as explained above
Stay-in-business capital expenditure was $119 per PGM ounce for the quarter
Mimosa: Production, Cash Cost and Price Analysis
See www.aquariusplatinum.com for graph
Commentary
Safety, Health and Environment
No fatalities or LTIs occurred at Mimosa during the quarter.
Operations
The Mimosa mine operated very well during the quarter, enjoying cordial
industrial relations and meeting most of its production targets. Mimosa
continues to implement cost containment initiatives and have managed to operate
within budget.
Regulatory and fiscal environment
As reported in the previous quarter, the following regulatory issues have asignificant bearing on the operations of the mine:
Indigenisation
Mimosa continues to interact with the Ministry of Indigenization and Ministry
of Mines to work towards a sustainable solution.
15% Export Levy on un-beneficiated PGMs
Discussions with the authorities continued during the quarter to find a way
forward with regards to this issue. The company has not yet made provision for
this levy in the financials. If the levy were to be implemented, it would have
a significant impact on the financial position of the company.
Royalties
The company is continuing engagements with the authorities to have royalties
deductible for tax purposes. The tax liability relating to the
non-deductibility of royalties as at March 2015 (on a 100% basis) was $7.7m
($4.2 m prior year and $3.5m current year). The liability has been accrued in
the financials awaiting the finalisation of negotiations with the authorities
and any legislative amendments.
Operating cash costs per ounce
Unit cash cost per PGM ounce (before by-product credits) was 2% higher compared
to the previous quarter mainly as a result of decreased production.
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 799 754 566
Capital expenditure
The total capital expenditure for the second quarter amounted to $7 million.
Expenditure was mainly incurred on mobile equipment, drill rigs and LHD,
conveyor belt extension and down dip development.
TAILINGS OPERATION
Platinum Mile (Aquarius Platinum - 91.7%)
Material processed decreased 9% to 1.2 million tonnes
Head grade increased to 0.59 g/t from 0.55 - quarter on quarter
Recoveries decreased to 12%, down from 13% quarter on quarter
Production decreased to 2,552 PGM ounces as explained below
Cash costs increased to R9,327 per PGM ounce
Revenue was lower at R25 million for the quarter
Cash margin for the quarter was 3%, down from 14% in the previous quarter
Commentary
Platinum Mile
The results for the quarter were lower than those of the previous quarter
because of planned maintenance resulting in operational downtime. Anglo
Platinum has as yet not started their tailings re-treatment operations and
therefore the opportunity was utilised to do critical maintenance. It is
anticipated that the Anglo
Platinum tailings project should increase feed volumes by some 275,000 tonnes
of Merensky tailings material per month. Once full production ramp-up is
achieved the operation should increase production substantially in relative
terms.
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 9,327 7,851 7,311
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum - 50%)
There has been no change to the CTRP operations which remain on care and
maintenance until further notice.
CORPORATE MATTERS
Everest Sale (announcement date 10 February 2015 / 3 March 2015)
As announced on 23 April 2015 the conditions precedent in respect of the Part A
disposal process of the sale of Everest were fulfilled on 22 April 2015. Part A
of the disposal process is now unconditional and the consideration of R400
million is due and payable by Northam on 26 June 2015.
Part B of the disposal process is subject to the consent of the Minister of
Mineral Resources in terms of section 11 of the Mineral and Petroleum Resources
Development Act. The section 11 application has been submitted to the
Department of Mineral Resources.
Should the Ministerial Consent not be obtained the first part of the Disposal
will not be unwound.
Zimbabwe Royalty Update
As previously announced, in 2013 the Government of Zimbabwe proposed an export
tax on unrefined platinum, with a view to encouraging platinum mining companies
to invest in smelting and refining capacity in Zimbabwe. This export tax, at a
rate of 15% of revenue, was deferred to take effect from 1 January 2015. In the
2015 National Budget statement made in December 2014, the Minister of Finance
announced that the Government had deferred the export tax on un-beneficiated
platinum until 1 January 2017. However, the 2015 Finance Bill, which was
gazetted on 9 January 2015, does not provide for the deferral of the tax. The
platinum mining companies, represented by the Chamber of Mines, are in the
process of engagement with the Government of Zimbabwe to resolve the matter.
Although the matter has not yet been resolved substantial progress was made
during the quarter and Aquarius and Mimosa are hopeful that the matter will be
resolved in due course.
More information on all corporate matters can be found at
www.aquariusplatinum.com
Statistical Information: Kroondal P&SA1
See www.aquariusplatinum.com for table
Statistical Information: Mimosa
See www.aquariusplatinum.com for table
Statistical Information: Platinum Mile
See www.aquariusplatinum.com for table
Aquarius Platinum Limited
Incorporated in Bermuda
Exempt company number 26290
Board of Directors
Sir Nigel Rudd Non-executive Chairman
Jean Nel Chief Executive Officer
David Dix Non-executive
Tim Freshwater Non-executive (Senior Independent Director)
Edward Haslam Non-executive
Kofi Morna Non-executive
Zwelakhe Mankazana Non-executive
Sonja De Bruyn Sebotsa Non-executive
Audit/Risk Committee
David Dix (Chairman)
Tim Freshwater
Edward Haslam
Kofi Morna
Sir Nigel Rudd
Remuneration Committee
Edward Haslam (Chairman)
David Dix
Zwelakhe Mankazana
Sir Nigel Rudd
Nomination Committee
Sonja De Bruyn Sebotsa (Chairman)
Tim Freshwater
Edward Haslam
Kofi Morna
Willi Boehm
Chief Operating Officer
Robert Schroder
Company Secretary
Willi Boehm
AQPSA Management
Robert Schroder Managing Director
Jean Nel Executive Director
Benjamin Gaseemelwe Acting General Manager: Kroondal
Mimosa Mine Management
Winston Chitando Chairman
Peter Chimboza Resident Director
Fungai Makoni Managing Director
Platinum Mile Management
Richard Atkinson Managing Director
Paul Swart Financial Director
Issued Capital
At 31 March 2015, the Company had on issue: 1,502,695,183 fully paid common
shares.
Substantial Shareholders 31 March 2015 Number of Shares Percentage
HSBC Custody Nominees (Australia) Limited 107,881,143 7.18
JP Morgan Nominees Australia Limited 55,479,748 3.69
Primary Australian Securities Exchange Trading Information
Listing: (AQP.AX)
Premium London Stock Exchange (AQP.L) ISIN number BMG0440M1284
Listing:
Secondary JSE Limited (AQP.ZA) ADR ISIN number US03840M2089
Listing:
Convertible Bond ISIN number
XS0470482067
Broker (LSE)
Broker (ASX) Sponsor (JSE)
Barclays Rand Merchant Bank
Euroz Securities (A division of FirstRand Bank
5 The North Level 18 Alluvion Limited)
Colonnade 58 Mounts Bay Road, 1 Merchant Place
Perth WA 6000 Cnr of Rivonia Rd and Fredman
Canary Wharf Telephone: +61 (0) 8 Drive, Sandton 2196
9488 1400 Johannesburg, South Africa
London E14 4BB
Tel: +44 (0) 20 7623
2323
Telephone: +44 (0)20
7628 1000
Aquarius Platinum (South Africa) (Proprietary) Ltd
100% Owned
(Incorporated in the Republic of South Africa)
Registration Number 2000/000341/07
1st Floor, Block C, Rosebank Office Park, 181 Jan Smuts Avenue, Rosebank, South
Africa
Postal Address: PO Box 7840, Centurion, 0046, South Africa
Telephone: +27 (0) 10 001 2848
Facsimile: +27 (0) 12 001 2070
Aquarius Platinum Corporate Services Pty Ltd
100% Owned
(Incorporated in Australia)
ACN 094 425 555
Level 1, Suite 6, South Point, 100 Mill Point Road, 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: info@aquariusplatinum.com
For further information please visit www.aquariusplatinum.com or contact:
In the United Kingdom and South Africa: In Australia:
Jean Nel
+27 (0) 10 001 2848 Willi Boehm
+61 (0) 8 9367 5211
Glossary
A$ Australian Dollar
Aquarius Aquarius Platinum Limited
or AQP
APS Aquarius Platinum Corporate Services Pty Ltd
AQPSA Aquarius Platinum (South Africa) (Pty) Ltd
ACS(SA) Aquarius Platinum (SA) Corporate Services (Pty) Ltd
BEE Black Economic Empowerment
BRPM Blue Ridge Platinum Mine
CTRP Chrome 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 frequency 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 formerly South African Government Department of Minerals and Energy
DMR South African Government Department of Mineral Resources, formerly the
DME
Dollar United States Dollar
or $
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 Limited
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
nm Not measured
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
PlatMile Platinum Mile Resources (Pty) Ltd
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 Limited
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.
Tonne 1 Metric tonne (1,000kg)
TARP Trigger Action Response Procedure
UG2 Reef A PGE-bearing chromite layer within the Critical Zone of the Bushveld
Complex