Aquarius Platinum Half-yearly Results to 31 December 2015
February 09 2016 - 4:00AM
UK Regulatory
TIDMAQP
AQUARIUS PLATINUM LIMITED
Half-Year Results to 31 December 2015
Key Points: Financial
* Revenue of $78 million down 31% compared to the prior corresponding period
(pcp) due to lower PGM prices
* Group mine EBITDA $5 million (H1 2015: $18 million) lower despite
controlled operating costs due to lower PGM prices
* Share of profit from JV entities: EBITDA $3 million
* JV entities contributed a net loss of $53 million after one off non-cash
impairment of $42 million
* Headline loss (before exceptional charges) of $25 million at 1.69 cents per
share (H1 2015: loss of $30 million at 2.07 cents per share)
* Accounting net loss after tax (to IFRS) of $76 million (5.12 cents per
share) (H1 2015: loss of $57 million at 3.93 cents per share)
* Convertible bonds $125 million repaid on maturity in December 2015
* Group cash balance at 31 December 2015 of $42 million, with a further $2
million attributable to Aquarius held in JV entities
Key Points: Operational
* Combined H1 production from Kroondal and Mimosa at 352,107 PGM ounces is
the highest in the company's history
* Continued improvement in Kroondal's safety performance with 12 month LTIFR
improving to 0.50 from 0.62 in the pcp
* Mimosa's 12 month LTIFR deteriorated to 0.13 due to a fatality in August
* Group attributable production increased by 4% to 182,911 PGM ounces (H1
2015: 175,831 PGM ounces)
* Kroondal consistently producing at capacity levels with 12 consecutive
quarters above 105,000 PGM ounces
* Kroondal unit costs well controlled increasing by 2% in Rand terms,
compared to pcp, and decreasing 17% in Dollar terms due to a weaker Rand
* Production in H1 exceeded guidance at both Kroondal and Mimosa
* Mimosa performed strongly again, continuing to produce at capacity
* Mimosa unit costs down 2% compared to the pcp, starting to reflect the
benefits of the cost savings implemented during H1 FY2015
* Mimosa PGM Dollar price weakened further reducing 26% compared to the pcp
* Mimosa production for the half year of 60,214 PGM ounces, up 2% compared to
the pcp
* PlatMile operation continues to build up production - much dependant on
volume and grade of concentrator feed from Anglo Platinum
* The average US Dollar PGM basket price of $825 was 29% lower compared with
the pcp
* The average Rand basket price decreased by 13% compared to the pcp due to a
weaker Rand
* The Rand weakened by 23% on average against the US Dollar compared to the
pcp
Key Points: Strategic
* Repayment of convertible bonds $125 million
* Completion of part B of the Everest mine sale
Commenting on the results, Jean Nel, CEO of Aquarius Platinum, said:
Both Kroondal and Mimosa produced ahead of guidance and at reduced costs during
the half year. Combined production from Kroondal and Mimosa, of 352,107 4E
ounces for the half year is a company record. Both Kroondal and Mimosa's PGM
unit costs are lower today than 3 years ago in nominal terms (and substantially
lower in real terms), a really credible performance by the operating teams lead
by Rob Schroder and Winston Chitando. That said, the lower PGM prices
experienced during the half year significant impaired both Kroondal and
Mimosa's profitability. In order to ensure sustainability in this macro
environment (US$ PGM prices fell to the lowest level in more than a decade)
further cost saving initiatives were implemented at Kroondal, and specifically
Mimosa, which management expects to result in unit costs reducing further going
forward.
In relation to the proposed amalgamation between AQP and Sibanye, following the
approval by AQP shareholders of the amalgamation in general meeting on 18
January 2016, AQP continues to co-operate with Sibanye in fulfilling the
remaining conditions precedent to the Amalgamation Agreement and AQP
shareholders will be advised of any material progress in due course.
Financial results: Half-Year to 31 December 2015
Aquarius recorded a consolidated accounting net loss after tax (IFRS) of $76
million (the Result) attributable to its share holders for the half-year (5.12
cents per share). The result included one off non-cash charges of $55 million
after tax relating to the impairment of mining assets at Mimosa and Platmile.
EBITDA from controlled entities was $5 million, a $13 million (75%) decease
from the pcp. The Group's decreased EBITDA despite an increase in production
was driven by depressed PGM prices which were 29% lower compared to the pcp.
Production attributable to Aquarius increased 4% to 182,911 PGM ounces. All
three mines, Kroondal, Mimosa and PlatMile exceeded the pcp production levels
whilst maintaining good control over operating costs.
Profit & Production Summary
Aquarius JV Total Consolidation Aquarius
operations entities adjustment Group
Mine EBITDA $5M $3M $8M ($3M) $5M
Revenue $78M $50M $128M ($50M) $78M
Cost of sales ($91M) ($54M) ($145M) $54M ($91M)
Net loss after tax ($24M) ($53M) ($77M) - ($77M)
PGM ozs production 122,697 60,214 182,911 - 182,911
* Includes $55 million impairment of Mimosa and PlatMile
Revenue (PGM sales, interest) for the half year of $78 million was down 31%
compared to the pcp. The lower revenue reflects the difficult PGM metals price
with Dollar prices dropping to average $825 compared to $1,165 in the pcp, a
29% decrease. In Rand terms, the PGM basket decreased 13% cushioned to some
extent by a weaker Rand which also decreased 23% to R13.43, compared to the
pcp. In Zimbabwe, PGM prices were substantially lower, recording a 26% decrease
to close at $856, compared to the pcp.
Total cash cost of production was $83 million, down $14 million despite a 4%
increase in production at Kroondal. This was primarily due to good cost
control and the weakening Rand which resulted in lower Dollar costs.
Significantly, Kroondal recorded its twelfth consecutive +105,000 PGM ounce
production quarter, a record for the mine. This is particularly pleasing given
the ongoing difficult operating conditions.
Cost per PGM ounce in Dollar terms in South Africa decreased 17% to $679 but
increased 2% in Rand terms due to a 23% weakening in the Rand/US Dollar
exchange rate. In Zimbabwe the cash cost per PGM ounce was $784, a 2%
reduction demonstrating the beginning of the impact of the cost savings
implemented in H1 FY2016. Maintaining operating unit cost increases well within
inflationary targets will continue to be a point of focus particularly in the
ongoing low metal price environment.
Exchange rate movements continued to have a volatile effect on earnings. The
Rand weakened significantly to average R13.43 to the US Dollar compared to
R10.94 in the pcp. During the half-year, Aquarius recorded net foreign exchange
gains of $2.3 million comprising gains on sales adjustments and revaluation of
cash, intercompany loans and pipeline debtors.
Administration costs of $3.9 million were in line with forecast. These included
$1.5 million transaction costs incurred to date on the proposed Sibanye Gold
amalgamation with the Group. Depreciation and amortisation for the half year
was $9 million.
Finance costs include $3 million interest on convertible bonds and bank
borrowings, $2 million of non-cash interest arising from the unwinding of the
debt portion of the convertible bond and $2 million in non-cash interest
arising from the unwinding of the net present value of the rehabilitation
provisions of AQPSA.
Cash balances
Group cash at 31 December 2015 was $42 million, down $154 million from June
2015. The decrease in cash was mainly attributable to the $125 million
repurchase of convertible bonds that matured in December 2015 and unrealised
foreign exchange losses of $19 million following the restatement of Rand cash
balances following the weakening of the Rand against the US Dollar. In
addition to this, the Group paid $7 million to fund its capital expenditure
program, paid $3 million in interest and received $4 million of dividends from
Mimosa.
Cash held at Mimosa and Blue Ridge which is no longer classified as group cash
due to the adoption of equity accounting was $4 million (100% basis).
Sale of assets
Part B of the Everest mine sale concluded in the half year resulting in the
receipt of cash of R50 million ($3.5 million). An accounting profit of $4.5
million was recorded after taking into account the $1 million carrying value of
Everest assets and liabilities.
Joint venture entities
Mimosa
Mimosa recorded an EBITDA profit attributable to Aquarius of $4 million and a
net loss before tax of $51 million. The result was achieved on production of
60,214 PGM ounces attributable to Aquarius. Despite consistent production, the
83% decrease from $27 million to $4 million in EBITDA compared to the pcp was
driven by lower PGM prices (down 26%), higher production (up 2%), and lower
unit costs (down 2%).
In the 2015 National Budget presentation, the deferment of the VAT on
un-beneficiated platinum to 1 January 2017 was proposed. However, the
subsequent Finance Bill and Finance Act of 2015 did not include the deferment.
Post balance sheet date, the deferment to 1 January 2017 was legislated.
During the half year a dividend of $4 million was received from Mimosa.
Cash held in Mimosa at 31 December 2015 was $2 million (100% basis).
Mimosa's financial result is provided in the Group Financials table on page 5
and its operational performance is discussed under the Operating Review section
of this announcement.
Blue Ridge and Sheba's Ridge
Blue Ridge and Sheba's Ridge recorded a net loss after tax of $1.8 million.
Group Financials by Operation
February 09, 2016 04:00 ET (09:00 GMT)
Aquarius Platinum Limited shareholders approved the Amalgamation Agreement and
Amalgamation on 18 January 2016. The approvals were a condition precedent to
the transaction between the Company and Sibanye Gold Limited proceeding. The
only outstanding regulatory approvals required for the transaction to proceed
are those of the South African Competition Commission and the Competition
Tribunal (refer section 1.9 of the Explanatory Memorandum of the Meeting
Materials for further detail). Once these competition approvals have been
obtained, a timetable of events leading up to the date for payment of the
consideration will be announced to ASX, LSE and JSE and published on Aquarius'
website at www.aquariusplatinum.com.
More information on all corporate matters can be found at
www.aquariusplatinum.com
See wwww.aquariusplatinum.com for statistical information 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
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
Edward Haslam (Chairman)
Tim Freshwater
Kofi Morna
Sir Nigel Rudd
Remuneration Committee
Edward Haslam (Chairman)
Zwelakhe Mankazana
Sir Nigel Rudd
Nomination Committee
Sonja de Bruyn Sebotsa (Chairman)
Edward Haslam
Tim Freshwater
Kofi Morna
Sir Nigel Rudd
Willi Boehm
Chief Operating Officer
Robert Schroder
Company Secretary
Willi Boehm
AQPSA Management Mimosa Mine Management
Robert Schroder Winston Chitando
Managing Director
Jean Chairman
Nel Peter
Executive Director Chimboza
Anthony Jubert Resident Director
General Manager: Kroondal Fungai Makoni
Managing
Director
Platinum Mile Management
Richard Atkinson
Managing Director
Paul Swart
Financial Director
Issued capital
At 31 December 2015, the Company had on issue 1,508,344,873 fully paid common
shares.
Substantial shareholders 31 December Number of shares Percentage
2015
HSBC Custody Nominees (Australia) 108,473,857 7.19
Limited
Chase Nominees Limited 58,565,718 3.88
Primary Australian Securities Trading Information
Listing: Exchange (AQP.AX)
Premium London Stock Exchange ISIN number BMG0440M1284
Listing: (AQP.L)
Secondary JSE Limited (AQP.ZA) ADR ISIN number US03840M2089
Listing:
Convertible bond ISIN number
XS0470482067
Broker (LSE) Broker (ASX) Sponsor (JSE)
Barclays Euroz Securities Rand Merchant Bank
5 The North Colonnade Level 18 Alluvion (A division of FirstRand
Canary Wharf 58 Mounts Bay Road, Bank Limited)
London E14 4BB Perth WA 6000 1 Merchant Place
Telephone: +44 (0) 20 Telephone: +61 (0) 8 Cnr of Rivonia Rd and
7623 2323 9488 1400 Fredman Drive, Sandton
2196
Johannesburg South
Africa
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 4, Suite 5, South Shore Centre, 85 The Esplanade, South Perth WA 6151,
Australia
Postal Address: PO Box 485, South Perth, WA 6951, 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 Willi Boehm
+27 (0)10 001 2843 +61 (0) 8 9367 5211
Glossary
A$ Australian Dollar
Aquarius or Aquarius Platinum Limited
AQP
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 or $ United States Dollar
Everest Everest Platinum Mine
Great Dyke A PGE-bearing layer within the Great Dyke Complex in Zimbabwe
Reef
GoZ Government of 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 Johannesburg Stock Exchange
Kroondal Kroondal Platinum Mine or P&SA1 at Kroondal
LHD Load haul dump machine
LTIFR Lost Time Injury Frequency Rate
Marikana Marikana Platinum Mine or P&SA2 at Marikana
Mimosa Mimosa Mining Company (Private) Limited
NUM National Union of Mineworkers
nm Not measured
pcp previous corresponding period
PGE(s) (6E) Platinum group elements plus gold. Five metallic elements commonly found
together which constitute the platinoids (excluding Os (osmium)). These are
Pt (platinum), Pd (palladium), Rh (rhodium), Ru (ruthenium), Ir (iridium)
plus Au (gold)
PGM(s) (4E) Platinum group metals plus gold. Aquarius reports PGMs as comprising
Pt+Pd+Rh plus Au (gold) with Pt, Pd and Rh being the most economic
platinoids in the UG2 Reef
PlatMile Platinum Mile Resources (Pty) Ltd
PSA1 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Kroondal
PSA2 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Marikana
R or Rand South African Rand
Ridge Ridge Mining Limited
RBZ Reserve Bank of Zimbabwe
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 Limited Rustenburg Platinum Mines Limited, a subsidiary of Anglo Platinum Limited
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
END
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