VANCOUVER, March 30, 2012 /CNW/ - Anooraq Resources Corporation
("Anooraq" or the "Company") announces its operating and financial
results for the three and twelve months ended December 31, 2011.
This release should be read together with the Company's Financial
Statements and Management Discussion & Analysis available at
www.anooraqresources.com and filed on www.sedar.com. Currency
values are presented in South African Rand (ZAR), Canadian Dollars
($) and United States Dollars (US$). The 2011 financial year was
operationally challenging at Bokoni Platinum Mines ("Bokoni"),
however, the year ended on a positive note with the Company able
to: -- negotiate a US$600 million restructure, recapitalization and
refinancing plan for the Company and the Bokoni Group, as detailed
in the Company's news release and joint news release with Anglo
American Platinum Limited ("Amplats") dated 2 February, 2012 ("the
restructure plan"); -- agree with Amplats a new and enhanced Bokoni
extraction strategy and recapitalization plan which will focus
Bokoni as a mine in development through to 2017, whilst phasing out
higher cost marginal shaft operations and increasing annual steady
state production from its current base to more than 300,000 PGM1
ounces; and -- secure and appoint a new experienced management team
at Bokoni to implement the new extraction strategy, effective from
February 2012 onwards. Operating and financial performance Set out
below are summaries of the key operating and financial results for
Bokoni and the Company for the periods under review.
_______________________________________________________________________
|Operating results | Q4 | Q4 | % | 2011 | 2010 | % | | | 2011 |
2010 |Change| | |Change|
|_____________________|_______|_______|______|_________|_________|______|
|Tonnes |T |257,621|278,242| (7) |1,047,401|1,044,084| - | |milled
| | | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|Recovered |g/t | 4.08 | 4.17 | (2) | 3.86 | 4.12 | (6) | |grade
|milled,4E| | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|4E oz |Oz |29,316 |30,776 | (5) | 113,625 | 116,164 | (2) |
|produced | | | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|UG2 mined |% | 36.4 | 27.7 | 24 | 32.6 | 32.2 | 1 | |to total | |
| | | | | | |output | | | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|Primary |M | 2,875 | 2,308 | 25 | 10,549 | 10,292 | 3 |
|development| | | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|Capital |$m | 4.8 | 10.8 | (56) | 28.7 | 28.2 | 2 | |expenditure|
| | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|Operating |ZAR/t | 1,285 | 1,058 | (21) | 1,194 | 989 | (21) |
|cost/tonne | | | | | | | | |milled | | | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|Operating |ZAR/4E oz|11,292 | 9,566 | (18) | 11,009 | 8,888 | (24)
| |cost/4E oz | | | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|Lost-time |Per | 2.41 | 2.32 | (4) | 1.87 | 2.11 | 11 | |injury
|200,000 | | | | | | | |frequency |hours | | | | | | | |rate
|worked | | | | | | | |("LTIFR") | | | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|Total |Number | 3,498 | 3,426 | 2 | 3,498 | 3,426 | 2 | |permanent
| | | | | | | | |labor | | | | | | | | |(mine | | | | | | | |
|operations)| | | | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
|Total |Number | 1,826 | 1,690 | 8 | 1,826 | 1,690 | 8 |
|contractors| | | | | | | | |(mine | | | | | | | | |operations)| |
| | | | | |
|___________|_________|_______|_______|______|_________|_________|______|
_____________________________________________________________________
| Consolidated statement of comprehensive income summary |
|_____________________________________________________________________|
|Expressed in Canadian Dollars | Q4 2011| Q4 2010| FY 2011| FY
2010| |(000's) | | | | |
|________________________________|________|________|_________|________|
|Revenue | 32,514| 43,244| 144,407| 148,287|
|________________________________|________|________|_________|________|
|Cash operating costs | 41,722| 42,285| 167,997| 141,880|
|________________________________|________|________|_________|________|
|Cash operating (loss)/profit* | (9,208)| 959| (23,590)| 6,407|
|________________________________|________|________|_________|________|
|Operating margin | (28%)| 2.2%| (16%)| 4.3%|
|________________________________|________|________|_________|________|
|EBITDA |(12,834)| (6,263)| (46,008)|(12,963)|
|________________________________|________|________|_________|________|
|Loss after tax |(35,519)|(32,401)|(147,865)|(93,659)|
|________________________________|________|________|_________|________|
|Non-controlling interest |(15,997)|(14,004)| (65,936)|(41,938)|
|________________________________|________|________|_________|________|
|Loss attributable to Anooraq |(19,522)|(18,397)|
(81,929)|(51,721)| |shareholders | | | | |
|________________________________|________|________|_________|________|
|Basic and diluted loss per share| 4| 4| 19| 12| |- cents | | | | |
|________________________________|________|________|_________|________|
|*Cash operating profit/(loss) before depreciation and amortization
|
|_____________________________________________________________________|
Safety It is with deep regret that one fatal accident occurred at
Bokoni during 2011, in which Miss Hilda Mokgobedi Raganya was
fatally injured in a trackless mobile machinery accident on 18
November 2011. Management continues to focus on taking appropriate
measures to ensure a safer working environment to prevent the
reoccurrence of such an accident. As a result of the fatality and
other Section 54 stoppages imposed by the Department of Mineral
Resources, a total of 14 operating shifts were lost during Q4 2011.
A total of 42 operating shifts were lost at Bokoni during FY 2011
as a result of Section 54 safety stoppages. Encouragingly, LTIFR
improved from 2.11 to 1.87 in the financial year. Production and
development Production for Q4 2011 was adversely impacted by the
high number of Section 54 safety stoppages, as well as 10 milling
shifts lost at the concentrator plant due to a planned mill shell
replacement at the Merensky concentrator. Recovered grade for Q4
2011 decreased by 2%, whilst concentrator recoveries for Merensky
and UG2 ore deteriorated by 1%, to 87.5%, and improved by 3%, to
83%, respectively. Tonnes milled remained flat through the
financial year and although the recovered grade decreased by 6%
average concentrator recoveries remained relatively constant at
84.5%. Total PGM production decreased 2% to 113,625 ounces, largely
attributable to a decrease in UG2 recoveries. Total primary
development increased by 25% in Q4 2011 when compared to Q4 2010,
and by 3% year-on-year. Revenue Revenue from the sale of
concentrate for Q4 2011 was $32.5 million (ZAR257.5 million)
compared to revenue of $43.2 million (ZAR296.2 million) for Q4
2010. This change in revenue was influenced by lower volumes, the
weakening of the average ZAR to $ exchange rate for Q4 2011 by
almost 15% to ZAR7.92=$1 (Q4 2010: ZAR6.82=$1) together with a
change in the PGM basket price to US$1,220/oz (ZAR9,891/oz) (Q4
2010: US$1,357/oz (ZAR9,366/oz)). Revenue for FY 2011 was $144.4
million (ZAR1,055.6 million) (FY 2010: $148.3 million (ZAR1,052.4
million)).The slight weakening of the average ZAR to $ exchange
rate combined with an improved basket price kept revenues
relatively constant over the period. The average PGM basket price
achieved for FY 2011 was US$1,380/oz (ZAR10,028/oz), representing a
10% increase on FY 2010 at US$1,257/oz (ZAR9,207/oz). The average
ZAR to $ exchange rate for FY 2011 was ZAR7.33=$1 (FY 2010:
ZAR7.10=$1). Cash operating costs Cash operating costs for Q4
2011 were $41.7 million (ZAR330.3 million) compared to $42.3
million (ZAR288.5 million) for Q4 2010. Cash operating costs for FY
2011 were $167.9 million (ZAR1,230.7 million) compared to $141.8
million (ZAR1,006.8 million) in FY 2010, primarily attributable to
above inflation increases in labour costs, increased stores charges
and annual increases in utility charges. Finance charges Total
finance charges of $92 million (ZAR672 million) were incurred in FY
2011, of which $50 million (ZAR364 million) were attributable to
Anooraq, contributing significantly to the Company's net loss for
the period. Finance charges will be reduced substantially on
implementation of the restructure plan (see commentary on new
consolidated debt facility below). Earnings The basic and diluted
loss per share for Q4 2011 remained the same as Q4 2010 at 4 cps,
whilst widening from 12 cps to 19 cps year-on-year. Outlook for
2012 Restructure, recapitalization and refinancing of the Company
and the Bokoni Group During 2011 Anooraq and Amplats determined
that the current strategic approach at Bokoni, together with both
the Bokoni Group and Company's historical financing plan required
restructuring, as detailed in the Company's news release dated 2
February, 2012. The net result of the restructure plan for the
Company is as follows: -- the Company will transfer 31.4 million of
its 107 million attributable PGM resource ounces to Amplats at its
Boikgantsho and Ga-Phasha development project areas for an
effective cash consideration of $214 million (ZAR 1.7 billion); --
the Bokoni lease area will be extended by incorporating the western
section of the Ga-Phasha development project area, thereby
increasing the Bokoni lease area to cover 20km of continuous strike
length over both the Merensky and UG2 reef horizons, together with
established mine and surface infrastructure; -- Amplats and Anooraq
will enter into an interest standstill agreement effective 1 July,
2011 through to 30 April 2012, relating to historical debt owing by
Anooraq and the Bokoni Group to Amplats which amounted to
approximately $378 million (ZAR3 billion) of debt attributable to
Anooraq ($755 million (ZAR6 billion) on a consolidated group basis)
as at 31 December, 2011. This will result in a $38 million (ZAR300
million) interest saving for the Company; -- on implementation of
the restructure plan, Anooraq's attributable debt owing to Amplats
will decrease from $378 million to $126 million (ZAR3 billion to
ZAR1 billion). Consolidated group debt will reduce from $755
million to $126 million (ZAR6 billion to ZAR1 billion) ("historical
debt balance"); -- a new extraction strategy for Bokoni has been
agreed between Amplats and Anooraq, which will see Bokoni as a mine
in development through to 2017, focusing on its Brakfontein
Merensky and Middelpunt Hill UG2 expansion projects, whilst phasing
out its high-cost marginal shaft operations during the same period
(see below); -- the new extraction strategy at Bokoni will require
an estimated capital expenditure of $327 million (ZAR2.6 billion)
and will be financed by Amplats funding its $164 million (ZAR1.3
billion) share of expenditure, while providing Anooraq with a new
debt facility of $164 million (ZAR1.3 billion) to meet its share of
funding requirements; -- the new consolidated debt facility of up
to $289 million (ZAR2.3 billion), comprising the $126 million (ZAR1
billion) historical debt balance together with the new $164 million
(ZAR1.3 billion) facility provided by Amplats, will: o comprise a
single nine-year debt term facility, terminating on December 31,
2020; o yield variable interest coupon rates depending on the
quantum drawn on such facility by Anooraq during the debt term,
which includes a zero interest coupon on the $126 million (ZAR1
billion) historical debt balance for the first three-year period of
the debt term; o result in an estimated average debt interest
coupon of 7% per annum for the Company through to 2020, as compared
to the average debt interest coupon of 16% per annum attached to
historical debt facilities. -- the Company will not issue any new
equity as a result of the restructure plan. Amplats and Anooraq
continue to progress the restructure plan and are in the process of
settling definitive transaction agreements between them, whilst
advancing the necessary legal and regulatory approvals required for
its implementation. The completion of the proposed restructure plan
is subject to conditions precedent and is expected to close during
July 2012. New extraction strategy for Bokoni As part of the
restructure plan Amplats and Anooraq have determined that the
historical extraction strategy for Bokoni, as agreed between them
in 2009, was inappropriate and required a new approach, having
regard to the vast size of the Bokoni orebody and multiple
potential attacking points over both the Merensky and UG2 reef
horizons, stretching 20km of strike length at the new extended
Bokoni lease area. The key elements of the new Bokoni extraction
strategy are as follows: -- Bokoni will be positioned as a
development mine for the next five years through to 2017, with its
major emphasis focused on completion of the Brakfontein Merensky
project and an accelerated development programme at the Middelpunt
Hill UG2 expansion project. During the same period Bokoni will
phase out its high cost and marginal Merensky operations at its old
Vertical and UM2 shafts; -- Middelpunt Hill UG2 operations will be
expanded and accelerated through the Delta 80 project, which had
previously been deferred beyond 2020. This will result in
production at the Middelpunt Hill operations increasing from 35,000
tonnes per month ("tpm") to a steady state of 125,000tpm; -- the
Brakfontein Merensky project, which is currently producing at a
rate of 30,000tpm, will ramp up to a steady state level of
120,000tpm. This will require three additional ventilation shafts
in order to progress development below the current 6 level down to
9 level (650m below surface); -- currently, a number of potential
opportunities are being investigated to fill total mill capacity
(165,000tpm) at the operations, including exploiting shallow
resources along the 20km Merensky and UG2 strike length. New
management team for Bokoni As part of the restructure plan Amplats
and Anooraq appointed a new and experienced management team at
Bokoni in order to implement its new extraction strategy. The new
management team is led by Mr. Dawid Stander who has 33 years of
experience in the mining industry and held the position of General
Manager at Bokoni (formerly Lebowa Platinum Mines) from 2001 to
2005; during which period the performance of the operations
improved significantly. Announcement of updated technical review
for mining projects In conjunction with the proposed restructure
plan, Anooraq has completed an updated technical review for each of
Bokoni, the Ga-Phasha Project and the Boikgantsho Project. Copies
of the technical reports described below, prepared in accordance
with National Instrument 43-101 Disclosure Standards for Mineral
Projects, for each of these projects can be found on SEDAR at
www.sedar.com and with the United States Securities Commission
("SEC") at www.sec.gov, filed as of March 30, 2012: -- Bokoni: An
Independent Qualified Persons' Report on Bokoni Platinum Mine,
Limpopo Province, South Africa, dated March 22, 2012 and prepared
by Minxcon. -- Ga-Phasha Project: Technical Report: The Mineral
Resource Estimate for the Merensky and UG2 Reefs for the Ga-Phasha
Project Area, Limpopo Province, Republic of South Africa dated
March 30, 2012 prepared by ExplorMine Consultants. -- Boikgantsho
Project: Technical Report: The Mineral Resource Estimation For The
Platreef for the Boikgantsho Project Limpopo Province Republic of
South Africadated January 31, 2012 prepared by Kai Batla Minerals
Industry Consultants. Summaries of the technical information with
respect to each of Bokoni, the Ga-Phasha Project and the
Boikgantsho Project based on these updated technical reports,
including updated mineral resource and reserve estimates, as
applicable, can also be found in Anooraq's annual report on 20-F
for the year ended December 31, 2011 also available on SEDAR at
www.sedar.com and filed with the SEC at www.sec.gov on March 30,
2012. Non-material accounting adjustments and restatement of
interim financial statements The Company has filed restated
unaudited financial results for the first, second and third
quarters of 2011 in order to address inadvertent accounting
adjustments which led to an understatement of the loss for each of
the respective quarters. Management identified certain non-material
accounting adjustments during the year-end accounting process that
impacted the financial statements previously filed for the first,
second and third quarters of 2011. These accounting adjustments
relate to depreciation, recognition of share based payments and
interest on the A preference shares. The restated financial
information as described above has had no impact on Anooraq's
statement of cash flows in any of the three quarters. Management
believes the restatement of the financial information described
above does not materially impact the Company's consolidated
financial position or financial performance for the relevant
interim periods nor will it have an impact on future periods. The
restated financial statements reflect that there was no change in
the basic and diluted loss per share in Q1 2011, however the basic
and diluted loss per share for Q2 2011 increased $0.01 from $0.10
to $0.11 per share and the basic and diluted loss per share for Q3
2011 increased by $0.01 from $0.14 to $0.15 per share.
Notwithstanding the non-material nature of these adjustments,
management deems it prudent to amend and restate its interim
financial statements for Q1 2011, Q2 2011 and Q3 2011 on a
corrected basis. For further details refer to the Company's
Restated Condensed Consolidated Interim Financial Statements for
the three months ended March 31, 2011, the three and six months
ended June 30, 2011 and three and nine months ended 30 September
2011, available at www.anooraqresources.com and filed on
www.sedar.com on March 30, 2012. Note on cautionary and no
conference call Anooraq is currently trading under cautionary and
will not be holding a conference call or presentation to accompany
these results. Further to finalization and publication of the
financial effects of the restructure plan, the Company will resume
detailed shareholder communications. Neither the TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release. The
NYSE Amex has neither approved nor disapproved the contents of this
press release. Cautionary and forward-looking information This
document contains "forward-looking statements" that were based on
Anooraq's expectations, estimates and projections as of the dates
as of which those statements were made, including statements
relating to the Bokoni Group restructure and refinancing and
anticipated financial or operational performance. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "may", "will", "outlook",
"anticipate", "project", "target", "believe", "estimate", "expect",
"intend", "should" and similar expressions. Anooraq believes that
such forward-looking statements are based on material factors and
reasonable assumptions, including the following assumptions: the
Bokoni Mine will increase or continue to achieve production levels
similar to previous years; the Ga-Phasha, Boikgantsho, Kwanda and
Platreef Projects exploration results will continue to be positive;
contracted parties provide goods and/or services on the agreed
timeframes; equipment necessary for construction and development is
available as scheduled and does not incur unforeseen breakdowns; no
material labour slowdowns or strikes are incurred; plant and
equipment functions as specified; geological or financial
parameters do not necessitate future mine plan changes; and no
geological or technical problems occur. Forward-looking statements
are subject to known and unknown risks, uncertainties and other
factors that may cause the Company's actual results, level of
activity, performance or achievements to be materially different
from those expressed or implied by such forward-looking statements.
These include but are not limited to: -- uncertainties related to
the completion of the Bokoni Group restructure and refinancing; --
uncertainties and costs related to the Company's exploration and
development activities, such as those associated with determining
whether mineral resources or reserves exist on a property; --
uncertainties related to feasibility studies that provide estimates
of expected or anticipated costs, expenditures and economic returns
from a mining project; -- uncertainties related to expected
production rates, timing of production and the cash and total costs
of production and milling; -- uncertainties related to the ability
to obtain necessary licenses, permits, electricity, surface rights
and title for development projects; -- operating and technical
difficulties in connection with mining development activities; --
uncertainties related to the accuracy of our mineral reserve and
mineral resource estimates and our estimates of future production
and future cash and total costs of production, and the geotechnical
or hydrogeological nature of ore deposits, and diminishing
quantities or grades of mineral reserves; -- uncertainties related
to unexpected judicial or regulatory proceedings; -- changes in,
and the effects of, the laws, regulations and government policies
affecting our mining operations, particularly laws, regulations and
policies relating to: o mine expansions, environmental protection
and associated compliance costs arising from exploration, mine
development, mine operations and mine closures; o expected
effective future tax rates in jurisdictions in which our operations
are located; o the protection of the health and safety of mine
workers; and o mineral rights ownership in countries where our
mineral deposits are located, including the effect of the Mineral
and Petroleum Resources Development Act (South Africa); -- changes
in general economic conditions, the financial markets and in the
demand and market price for gold, copper and other minerals and
commodities, such as diesel fuel, coal, petroleum coke, steel,
concrete, electricity and other forms of energy, mining equipment,
and fluctuations in exchange rates, particularly with respect to
the value of the U.S. dollar, Canadian dollar and South African
rand; -- unusual or unexpected formation, cave-ins, flooding,
pressures, and precious metals losses (and the risk of inadequate
insurance or inability to obtain insurance to cover these risks);
-- changes in accounting policies and methods we use to report our
financial condition, including uncertainties associated with
critical accounting assumptions and estimates; environmental issues
and liabilities associated with mining including processing and
stock piling ore; -- geopolitical uncertainty and political and
economic instability in countries which we operate; and -- labour
strikes, work stoppages, or other interruptions to, or difficulties
in, the employment of labour in markets in which we operate mines,
or environmental hazards, industrial accidents or other events or
occurrences, including third party interference that interrupt the
production of minerals in our mines. For further information on
Anooraq, investors should review the Company's Annual Report O
disclosed in the Form 20-F for the year ended December 31, 2011
filed on SEDAR at www.sedar.com and with the United States
Securities and Exchange Commission www.sec.gov and other disclosure
documents that are available on SEDAR at www.sedar.com.
(--------------------------------------- ) (1) PGM refers to
platinum group metals; namely platinum, palladium, rhodium,
iridium, ruthenium and gold. Anooraq Resources
Corporation CONTACT: Queries:On behalf of AnooraqJoel
KeslerExecutive: Corporate DevelopmentOffice: +27 11 779
6800Mobile: +27 82 454 5556Russell and AssociatesCharmane Russell /
Nicola TaylorOffice: +27 11 880 3924Mobile: +27 82 372 5816 / +27
82 927 8957Macquarie First South Capital (Pty) LtdMelanie de
Nysschen / Annerie Britz / Yvette LabuschagneOffice: +27 11 583
2000
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