TIDMAQP
AQUARIUS PLATINUM LIMITED
PRELIMINARY FULL YEAR RESULTS TO 30 JUNE 2014
Key Points: Financial
- Significantly strengthened balance sheet following conclusion of rights
issue and repurchase of bonds, leaving AQP in a net cash position
- $62 million improvement in headline earnings performance
- Revenue marginally down by 2% to $233 million on lower prices (FY2013: $237 million)
- Group mine EBITDA marginally down to $30 million (FY2013: $35 million) due
to lower prices and lower production at PlatMile tailings retreatment
- Share of profit from JV entities: EBITDA $33 million, contributing net
profit $5 million
- Headline loss (before exceptional charges) of $11 million at 1.13 cents per
share (FY2013: loss of $73 million at 8.80 cents per share)
- Profit on repurchase of bonds $11 million
- Accounting net loss after tax (to IFRS) of $13 million (1.38 cents per
share) (FY2013: loss of $288 million at 34.55 cents per share)
- Mine operating net cash flow increased by $42 million to a $21 million
inflow (FY2013: outflow of $20 million)
- Group cash balance at 30 June 2014 of $137 million, with a further $8
million attributable to Aquarius held in JV entities
Key Points: Operational
- Significant improvement in Kroondal's safety performance with LTIFR
improving from 1.14 in FY2013 to 0.73 in FY2014
- Mimosa's LTIFR of 0.08 makes it the safest underground Platinum mine in
Southern Africa
- Group attributable production increased by 2% to 331,642 PGM ounces (FY2013:
325,103 PGM ounces)
- Kroondal consistently producing at capacity levels with 6 consecutive
quarters above guidance
- Kroondal annual production at highest level since 2008 at in excess of
430,000 PGM ounces
- Mimosa performed strongly again, continuing to produce at capacity but
impacted by a low PGM Dollar price, with cash costs up 1% compared to the
previous corresponding period (pcp)
- Mimosa Q4 production of >60,000 PGM ounces represents the highest ever
quarterly production by Mimosa
- Mimosa voluntary retrenchment process completed, costs reduced by 5%
- The average US Dollar PGM basket price of $1,164 was 5% lower compared to
the pcp
- The average Rand basket price increased by 11% compared to the pcp due to a
weaker Rand
- The Rand weakened by 18% on average against the US Dollar compared to the
pcp
- On-mine unit cash costs at Kroondal from mature shafts increased by 3% in
Rand terms compared to the pcp and by 9% if the development shaft K6 is
included in FY2014 costs
Key Points: Strategic
- Kroondal concluded 3 year wage agreements with representing unions at a cost
slightly above inflation measured by CPI
- Mimosa wage costs increased by 2%
- The implementation of the disposal of non-core assets announced in January
2014 is on track
- Agreed another extension of the Kroondal PSA by a further 4.8 million
tonnes.
Commenting on the results, Jean Nel, CEO of Aquarius Platinum,
said:
"The 2014 financial year was a year in which Aquarius delivered on its objectives.
Safety, production and cost performance at both Kroondal and Mimosa improved
substantially. Kroondal produced in excess of 430,000 PGM ounces for the first
time since 2008, whilst at the same time improving its safety performance
substantially. Also of significance is the 3 year wage agreement concluded
after year-end, once again, without any operational interruptions. Credit for
Kroondal's exceptional performance goes to the operational management team
lead by Rob Schroder and Wessel Phumo.
Mimosa continues to deliver safety, production and cost
performances ahead of guidance and is well positioned to continue delivery in
2015. Following the implementation of the voluntary retrenchment program at
Mimosa unit cost performance is set to continue to improve sustainably. Again
credit for an excellent performance is due to the Mimosa operational team lead
by Winston Chitando and Peter Chamboza.
At corporate level, with overwhelming support from shareholders,
AQP completed the rights offer and bond tender offer resulting in a
substantially strengthened balance sheet, with net cash, even before the
potential cash inflow from the sale of non-core assets.
Whilst the year under review was a difficult year with the Platinum
mining sectors' challenges well published, Aquarius is proudly of a view that
significant progress was made in improving the quality of its operations and
its balance sheet. These improvements, combined with the recently increased
metal prices positions the company to generate free cash for shareholders,
which as we have noted in the past, has been a neglected stakeholder. Against
this backdrop Aquarius' focus will remain resolutely on continuing to improve
safety, production and cost performances across the Group, whilst carefully
assessing selected growth opportunities."
Financial results: Year to 30 June 2014
Aquarius has commenced accounting for its investments in Mimosa and Blue Ridge
using the equity accounting method from 1 July 2013
Aquarius' consolidated result for the year ended 30 June 2014 was a
loss of $13 million (1.38 cents per share). Profitability at mine level
(on-mine EBITDA) was $30 million, down 14% compared to $35 million in the pcp
due to the impact of strikes on PlatMile's operations as well as the inclusion
of the development shaft at Kroondal, K6, in operations for the first time in
2014. The result reflects continued improvement of operational performance at
all operating mines, be it in a difficult and lower PGM price environment.
Total production from all Aquarius operations was 331,642 PGM ounces,
representing a 2% increase compared to pcp, despite the effect of the strike
action at Anglo Platinum on PlatMile's production.
Profit & Production Summary
Aquarius JV Total Consolidation Aquarius
operations entities adjustment Group
Mine EBITDA $30M $33M $63M ($33M) $30M
Revenue $233M $131M $364M ($131M) $233M
Cost of sales ($231M) ($110M) ($341M) $110M ($231M)
Net profit/(loss) ($18M) $5M ($13M) - ($13M)
after tax
PGM ozs production 220,961 110,681 331,642 - 331,642
Revenue (PGM sales, interest) for the year was $233 million, 2%
lower compared to the pcp due to lower PGM metal prices and the effect that
the Anglo Platinum strike action had on PlatMile. The PGM basket price
achieved for the year was $1,164 per PGM ounce, down 5% from the pcp. Gross
margins improved at Kroondal on higher production and a weaker Rand but
margins were lower at Mimosa due to lower Dollar PGM basket prices.
Total cash cost of production was $202 million, down $7 million
despite a 2% increase in production at Kroondal and PlatMile. Significantly,
Kroondal recorded its seventh consecutive +100,000 PGM ounce production
quarter, a record for the mine. This is particularly pleasing given the
ongoing difficulties prevailing in the sector.
On a per PGM ounce basis Dollar unit costs in South Africa
decreased 7% to $870 but increased 9% in Rand terms due to the inclusion of
Kroondal's K6 development shaft in operations for the first time. The unit
cost for the mature Kroondal shafts increased by only 3%. In Zimbabwe the cash
cost per PGM ounce was $878, a 1% increase inclusive of completing a voluntary
labour rationalisation program at a once off cost of $5.5 million. Operating
costs were well within inflationary targets and 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 R10.37 to the US Dollar
compared to R8.80 in the pcp. During the year Aquarius recorded net foreign
exchange gains of $2 million comprising gains on sales adjustments and
revaluation of cash, intercompany loans and pipeline debtors.
Administration costs of $7 million were substantially lower
following cost reduction initiatives implemented. Depreciation and
amortisation for the year of $29 million was lower despite increased
production due to an increased resource base resulting from the extension of
mine life of PSA1 at Kroondal.
Finance costs included $22 million on convertible bonds (of which
$10 million was non cash representing the accretion of interest on the
convertible bond), $5 million of non-cash interest arising from the unwinding
of the net present value of the rehabilitation provisions of AQPSA and $1
million of other costs.
Income tax expense of $0.5 million includes normal tax, deferred
tax and royalties.
Group Financials by Operation
Kroondal Marikana Everest Mimosa PMR
PGM ounces (4E) (attributable) 215,371 - - 110,681 5,590
$M
Revenue 222 1 1 131 5
Cost of Sales - mining, processing & admin (189) (2) (6) (96) (5)
Cost of Sales - depreciation & amortisation (24) - (2) (13) (2)
Gross profit/(loss) 9 (2) (7) 22 (2)
Administrative costs - - - - -
Foreign exchange gain/(loss) 4 - - - -
Finance costs - - - - -
Impairment losses - - - - -
Profit on repurchase of bonds - - - - -
Profit on sale of assets - - - - -
Closure, transition and rehabilitation costs (3) 9 (1) - -
Community share ownership trust - - - (0.5) -
Indigenisation costs - - - (2) -
Share of profit from joint venture entities - - - - -
Profit before income tax 10 7 (7) 19 (2)
Blue Ridge Corporate Total Reconciliation to Consolidated
Consolidated
Information
PGM ounces (4E) (attributable) - - 331,642 - -
$M
Revenue - 4 364 (131) 233
Cost of Sales - mining, processing & admin (1) - (299) 97 (202)
Cost of Sales - depreciation & amortisation - - (42) 13 (29)
Gross profit/(loss) (1) 4 23 (21) 2
Administrative costs - (7) (7) - (7)
Foreign exchange gain/(loss) - (2) 2 - 2
Finance costs - (32) (32) 4 (28)
Impairment losses - (3) (3) - (3)
Profit on repurchase of bonds - 11 11 - 11
Profit on sale of assets - 1 1 - 1
Closure, transition and rehabilitation costs - - 5 - 5
Community share ownership trust - - (0.5) 0.5 -
Indigenisation costs - - (2) 2 -
Share of profit from joint venture entities - - - 5 5
Profit before income tax (1) (29) (3) (9) (13)
* In the consolidated financial statements the Mimosa and Blue
Ridge operating segments are accounted for using the equity method. The column
titled "Reconciliation to Consolidated Information" provides a reconciliation
of the segment information used by the CEO to the consolidated financial
information.
Cash balances
Group cash at 30 June 2014 was $137 million, up $59 million from
June 2013. The increase in cash was mainly attributable to $226 million
proceeds from the rights issue to fund the repurchase of convertible bonds
with a nominal value of $173 million at a cost of $162 million. In addition to
this, the group paid $28 million to fund its capital expenditure program, paid
$13 million in interest and received $22 million of dividends from Mimosa.
A key indicator to the improved performance of Aquarius' South
African assets is the $41 million turnaround in net cash flows from operating
activities from a deficit of $20 million in the pcp to a surplus of $21
million in FY2014.
Cash held at Mimosa and Blue Ridge which is no longer classified as
group cash due to the adoption of equity accounting was $16 million (100%
basis).
Joint venture entities
Mimosa Investments Limited
Mimosa recorded an EBITDA profit attributable to Aquarius of $34
million and a net profit before tax of $10 million. The result was achieved on
production of 110,681 PGM ounces attributable to Aquarius. Despite consistent
production, EBITDA was lower than expected due to lower Dollar metal prices as
well as labour retrenchment costs of $5.5 million. Unlike Kroondal which
benefits when the Rand weakens against the Dollar, Mimosa has no such relief.
Mimosa's PGM basket price for the year was $1,133 per PGM ounce, 6% lower
compared to the pcp. Unit cash costs for the year were 1% higher at $878 per
PGM ounce, inclusive of labour retrenchment costs of $5.5 million.
Cash held in Mimosa at 30 June 2014 was $14 million (100%).
Mimosa's financial result is provided in the Group Financials table
on page 4 and its operational performance is discussed under the Operating
Review section of this announcement.
Blue Ridge Platinum (Pty) Ltd
Blue Ridge recorded a net loss after tax of $5 million. The result
reflects care and maintenance and interest costs for the year.
Adoption of IFRS 11 Joint Arrangements
Following a change to International Financial Reporting Standard 11 (IFRS11)
governing the accounting for jointly controlled investments, Aquarius has
commenced accounting for its investments in Mimosa and Blue Ridge using the
equity accounting method from 1 July 2013. This differs from the previous
approach whereby Aquarius proportionately consolidated its investments in
Mimosa and Ridge. The equity method recognises the Group's share of net assets
and contribution to profit and loss as single line items in the statement of
financial position and statement of comprehensive income. This differs from
the previous approach which included each line item such as revenue, cost of
sales, expenses etc as part of the consolidated results. This change has not
resulted in a change to the net assets of the Group.
Aquarius Platinum Limited
Consolidated Income Statement
Year ended 30 June 2014
$'000
Note Half year ended Year ended
30/06/14 31/12/13 30/06/14 30/06/13
Attributable Production (4E PGM 163,628 168,014 331,642 325,103
ounces)
Revenue (i) 119,883 113,173 233,056 237,115
Cost of Sales (including D&A) (ii) (110,407) (120,751) (231,158) (248,726)
Gross profit/(loss) 9,476 (7,578) 1,898 (11,611)
Other income 102 72 174 278
Administrative costs (iii) (3,017) (4,336) (7,353) (12,368)
Foreign exchange gain/(loss) (iv) (888) 2,731 1,843 (19,323)
Finance costs (v) (12,796) (15,295) (28,091) (26,669)
Impairment losses (vi) (597) (2,487) (3,084) (214,111)
Profit on repurchase of bonds 10,925 - 10,925 -
Profit on sale of assets 684 (31) 653 -
Closure, transition and
rehabilitation reversal/(cost) (vii) 5,342 - 5,342 (54,538)
Share of profit/(loss) from
joint venture entities (viii) 4,889 166 5,055 (2,698)
Profit/(loss) before tax 14,120 (26,758) (12,638) (341,040)
Income tax (expense)/benefit (ix) (3,274) 2,730 (544) 53,127
Net profit/(loss) 10,846 (24,028) (13,182) (287,913)
Loss per share (basic - cents) 3.73 (5.11) (1.38) (34.55)
Notes on the June 2014 Consolidated Income Statement
(i) Sales revenue was marginally lower despite increased production
due to lower PGM prices compared to the pcp.
(ii) Aggregate cost of sales were $17 million lower. In South
Africa unit costs per PGM ounce decreased 7% in Dollar terms but increased by
9% in Rand terms due to the inclusion of the Kroondal development shaft, K6,
for the first time in FY2014.
(iii) Corporate administration costs are lower due to cost
reduction initiatives.
(iv) Foreign exchange gains of $2 million were recorded on sales
adjustments and revaluation of cash, intercompany loans and pipeline debtors.
(v) Finance costs of $28 million comprises interest and non-cash
accretion of the convertible bond of $22 million, non-cash interest arising
from the unwinding of the net present value of the rehabilitation provisions
of AQPSA of $5 million and other costs of $1 million.
(vi) Includes impairment charges relating to TKO and Investments in
JV Entities.
(vii) A downwards revision of the rehabilitation provision was made
following the annual reassessment of the cost of performing rehabilitation
work.
(viii) Contribution from JV entities represents a $10 million
Mimosa net profit offset by a $5 million loss incurred at Blue Ridge.
(ix) Income tax expense of $0.5 million comprises normal tax,
deferred tax and royalties.
Aquarius Platinum Limited
Consolidated Cash Flow Statement
Year ended 30 June 2014
$'000
Half year ended Financial year ended
Note 30/06/14 31/12/13 30/06/14 30/06/13
Net operating cash flow (i) 16,536 4,706 21,242 (20,392)
Net investing cash flow (ii) (16,235) (10,989) (27,224) (20,630)
Net financing cash flow (iii) 52,209 9,912 62,121 (35,419)
Net increase/(decrease) in cash held 52,510 3,629 56,139 (76,441)
Opening cash balance 82,998 77,773 77,773 166,652
Exchange rate movement on cash (iv) 1,312 1,596 2,908 (12,438)
Closing cash balance (v) 136,820 82,998 136,820 77,773
Notes on the June 2014 Consolidated Cash Flow Statement
(i) Net operating cash flow includes net inflow from operations $16
million, interest received $6 million and income tax paid $1 million.
(ii) Net investing cash flow includes payments for mine development
and development costs $28 million and proceeds from sale of property, plant
and equipment $1 million.
(iii) Net financing cash flow includes interest paid $13 million,
net proceeds from rights issue and repurchase of bonds $55 million, proceeds
from borrowings $3 million, repayment of borrowings $4 million and dividends
from joint venture entities $22 million.
(iv) Exchange rate movement reflects movement of other currencies
against the US Dollar.
(v) Excludes $8 million attributable cash held at Mimosa and Blue Ridge.
Aquarius Platinum Limited
Consolidated Balance Sheet
At 30 June 2014
$'000
Financial year ended
Note 30/06/14 30/06/13
Assets
Cash assets 136,820 77,773
Current receivables (i) 30,104 34,622
Other current assets (ii) 15,246 15,237
Property, plant and equipment (iii) 100,122 105,030
Mining assets (iv) 109,089 125,816
Intangibles (v) 54,499 59,449
Investments in joint venture entities (vi) 230,410 242,079
Other non-current assets (vii) 41,185 43,668
Total assets 717,475 703,674
Liabilities
Current liabilities (viii) 41,338 42,845
Non-current payables (ix) 2,065 2,665
Non-current interest-bearing liabilities (x) 117,704 268,788
Other non-current liabilities (xi) 82,600 93,434
Total liabilities 243,707 407,732
Net assets 473,768 295,942
Equity
Issued capital 73,216 24,343
Treasury shares (26,239) (26,526)
Reserves 781,692 639,881
Accumulated losses (360,450) (347,402)
Non-controlling interests 5,549 5,646
Total equity 473,768 295,942
Notes on the June 2014 Consolidated Balance Sheet
(i) Reflects debtors receivable on PGM concentrate sales.
(ii) Reflects PGM concentrate inventory, consumables, stores and critical
spares.
(iii) Represents fixed assets within the Group.
(iv) Includes group's mining assets at Kroondal, Marikana, Everest, CTRP and
Platmile.
(v) Includes intangibles relating to acquisition of Platmile Resources.
(vi) Represents investments in joint venture entities Mimosa and Blue Ridge.
(vii) Includes recoverable portion of rehabilitation provision at P&SA sites
of $9 million, cash contributed to rehabilitation trusts $17 million and
deferred tax asset $15 million.
(viii) Includes trade creditors $34 million, AQPSA finance leases $3 million
and leave provisions $4 million.
(ix) Reflects P&SA partners' right of recovery of rehabilitation provisions.
(x) Reflects convertible bond of $118 million.
(xi) Includes deferred tax liabilities $17 million and provision for closure
costs $66 million.
OPERATING REVIEW
This section contains summarised operating reviews of each of the
Company's operations. Full operating statistics are provided on page 16 of
this report, and other updates relevant to all operations can be found under
Corporate Matters on page 14. In addition, further detail on each of the
operations can be obtained from the quarterly and half-year reports released
by the Company throughout the 2014 financial year which are available on the
Company's website at www.aquariusplatinum.com.
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD ("AQPSA") (Aquarius Platinum - 100%)
P&SA 1 at Kroondal (AQPSA - 50%)
- 12-month rolling average DIIR improved by 36% to 0.73 per
200,000 man hours from 1.14 the previous year
- Production improved by 9% to 7.2m tonnes
- Volumes processed increased to 7.2m tonnes
- Head grade deteriorated slightly to 2.39 g/t
- Recoveries decreased by 1% to 78% due to reduced head grade
- PGM production increased by 6% to 430,743 PGM ounces
- Revenue increased by 20% to R4.6 billion compared to the
previous financial year due improved production coupled with 12% improvement
in the Rand basket price
- Mining cash costs increased by 7% to R547 per tonne (making
Kroondal the most efficient underground platinum mine in South Africa on a R/t
basis), and costs per PGM ounce from mature shafts increased by 3% and
inclusive of K6 development shaft by 9% to R9,115
- Kroondal's cash margin for the period rose from 12% to 15%
Commentary - Kroondal
Safety, Health and Environment
The Kroondal operations ended the year with a much improved DIIR
compared to last year. The 36% improvement in safety is attributable to the
embracement of the My Life, My Responsibility, I will Comply Safety campaign
launched in late September 2013 by all employees. The focus remains on low
energy incidents and general behaviour.
Operations
Kroondal operations were stable throughout the five month strike
that gripped the rest of the industry in the Rustenburg area. This was in
itself a significant achievement and credit to our employees, organised labour
representatives and management.
In July 2014 AQPSA concluded three year wage agreements with its
work force at Kroondal agreeing an increase slightly above inflation (CPI)
without the loss of a single production shift, a result on which the Kroondal
work force and the company is rightfully proud.
Operating Cash Costs
Cash costs at Kroondal increased by 9% to R9,115 per 4E ounce
following the inclusion of the Kroondal development shaft K6 in operations for
the first time.
AQPSA Operating costs per ounce (R/oz)
6E net of
4E 6E by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu)
Kroondal 9,115 7,486 7,277
AQPSA Capital expenditure
Stay-in-business capital expenditure was in line with the mine plan
and mobile equipment replacement schedule. The K6 Shaft project cost was
approximately R89 million for FY2014 and is complete with the exception of the
final power reticulation from the local authority.
Kroondal (100% basis)
(R'000 unless otherwise stated) Total Per 4E oz
Ongoing Infrastructure Establishment 314,472 730
Project Capital (K6 shaft) 89,530 208
Mobile Equipment 129,008 300
Total 533,011 1,237
P&SA2 at Marikana (Aquarius Platinum - 50%)
Given the continuing low Rand PGM basket prices, Marikana continues
on care and maintenance until further notice.
Everest Mine
Similarly the Everest mine remains on care and maintenance until further
notice.
MIMOSA INVESTMENTS (Aquarius Platinum - 50%)
Mimosa Platinum Mine
- 12-month rolling average DIIR deteriorated to 0.08 per 200,000
man hours from 0.05 in the previous year
- Production increased by 4% to 2.512m tonnes
- Volumes processed increased by 3% to 2.453m tonnes
- Head grade deteriorated slightly to 3.65g/t
- Recoveries deteriorated slightly to 77%
- PGM production increased by 2% to 221,358 PGM ounces
- Revenue decreased by 4% to $260 million due to lower metal
prices
- Mining cash costs decreased 3% to $77 per tonne, and PGM ounce
cost decreased by 2% to $849 before retrenchment costs.
- Mining cash costs constant at $79 per tonne, PGM ounce cost
increased by 1% to $878 after retrenchment costs.
- Mimosa's cash margin for the period decreased to 24% from 26%
Commentary
Safety, Health and Environment
No fatalities occurred at Mimosa during the year. Three lost-time
injuries were reported with a commensurate deterioration in the DIIR.
Operations
The Mimosa mine operated very well during the year, enjoying
cordial industrial relations and meeting most of its production targets.
Regulatory and fiscal environment
During the year, the Zimbabwean political and regulatory
environment remained challenging for all mining companies operating in the
country.
Indigenisation
During the course of the year in question Mimosa had frequent
interaction with the Ministry of Indigenisation and continues to work
pro-actively towards a sustainable solution but to date no agreements or
definitive terms have been agreed between Mimosa and the Ministry of
Indigenisation.
Taxation
New Income Tax Act
The proposed new Income Tax Bill was gazetted in November 2012. The
bill was presented to Parliament for the first reading in May 2013. It passed
the second and third reading in Parliament on 25 June 2013 after amendments
from all relevant stakeholders. However, the President raised reservations
which Parliament is still considering.
Meanwhile, the income tax rate has remained at 25% of taxable
income, and withholding tax on technical fees and dividends at 15% and 10%
respectively.
Finance Act, 2014
The Finance Act which gives legal effect to the proposals made
through the Budget Statement for 2014 was gazetted on the 4 April 2014. The
new requirements legislated in the Finance Act include:
- Contributions or donations to Community Ownership Trust are now
allowable for tax deduction subject to approval of the Trust by the Minister.
- Proposed payment of VAT on un-beneficiated Platinum (15%)
effective 1 January 2015.
- Disallowing of royalties as a deductible expense against taxable
income with effect from 1 January 2014
Discussions between the mining sector and the Government of
Zimbabwe in relation to the last 2 points above are ongoing with a view to
reaching a solution that will result in these new taxes not being implemented.
Shareholders will be updated as to any material progress as soon as is
practical.
Operating Cash Costs
Operating costs increased slightly by 1% from the prior cost
platform mainly as a result of retrenchment costs following a labour
rationalisation exercise carried out during the year.
Operating cash costs per ounce ($/oz) before voluntary retrenchment
costs
4E 6E 4E net of
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) by-products
(Ni, Cu & Co)
Mimosa 849 803 575
Operating cash costs per ounce ($/oz) after voluntary retrenchment
costs
4E 6E 4E net of
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) by-products
(Ni, Cu & Co)
Mimosa 878 830 604
Capital expenditure
Stay in business capital expenditure at Mimosa was $27 million
($123 per PGM ounce), spent mainly on mobile equipment, drill rigs and LHDs,
the conveyor belt extension, down dip development and housing projects.
TAILINGS OPERATIONS
Platinum Mile (Aquarius Platinum - 91.7%)
- Material processed decreased by 29% to 2.441m tonnes
- Recoveries decreased by 50% to 7%
- Production decreased by 56% to 5,590 PGM ounces
- Cash costs increased by 39% to R9,165 per PGM ounce.
- Revenue decreased by 56% to R52 million
- The cash margin for the period was negative 2%, a decrease from
25% the previous year
Commentary
Platinum Mile:
The result for the year was severely impacted by strike action at
Anglo Platinum's operations in the Rustenburg area starting on 25 January 2014
and lasting until 24 June 2014. No meaningful analogies can be inferred by
comparing annual numbers.
The coarse grinding expansion at the operation was successfully
electromechanically commissioned at a capital cost of R26 million. The
benefits of this expansion on production yields should become evident in the
2015 financial year.
Operating cash costs per ounce (R/oz)
4E 6E 4E net of
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) by-products
(Ni, Cu& Co)
PMR 9,165 7,919 7,364
Chromite Tailings Retreatment Plant (CTRP) (Aquarius Platinum - 50%)
This operation remains on care and maintenance.
CORPORATE MATTERS
Tender Offer and Rights Issue
On 7 April 2014, Aquarius Platinum Limited announced a tender offer
to purchase a maximum of $225 million in principal amount of convertible bonds
of the current $298 million in principal amount of the convertible bonds
outstanding at a repurchase price of $92,000 per $100,000 in principal amount
of existing convertible bonds. The aggregate nominal amount of convertible
bonds validly tendered pursuant to the tender offer was $172.6 million.
The repurchase price, which together with accrued interest totalled
$165.7 million, was paid to security holders in May 2014.
The company advised that the tender offer would be financed upon
the successful completion of a rights issue to finance part or all of the
amount payable by the company for the existing convertible bonds accepted for
repurchase pursuant to the Tender offer.
The company received valid acceptances in respect of 931,250,197
rights issue shares, representing approximately 95.39 per cent of the total
number of rights issue shares offered to qualifying shareholders pursuant to
the rights issue announced by the company on 7 April 2014. The company
confirms that the shortfall for the remaining 44,956,709 rights issue shares
were placed by the underwriters. The rights issue grossed $226.1 million
through the issuance of 976,206,906 new common shares.
Following completion of the rights issue, the company's issued
share capital consists of 1,464,310,359 common shares. The company holds
17,047,787 common shares as treasury shares in accordance with Bermudan law.
Therefore, the total number of voting rights in the company is 1,447,262,572.
This figure may be used by shareholders as the denominator for the
calculations by which they determine if they are required to notify their
interest in, or a change in their interest in, the company under the FCA's
Disclosure and Transparency Rules.
Full details of the tender offer and Rights Issue can be found at
www.aquariusplatinum.com
Update on Sale of Assets
The company released details of the planned sale of two non-core
assets being its interest in the Blue Ridge Mine ("Blue Ridge Transaction")
and its interest in the Kruidfontein prospecting right on 30 January 2014
("Kruidfontein Transaction"). In the release the company confirmed its
expectation that the conditions precedent would be fulfilled in H2 calendar
2014. The Kruidfontein Transaction was conditional only upon obtaining certain
approvals from the DMR. Shareholders are advised that these approvals
including Section 11 approval were obtained in June 2014 and are currently
awaiting registration at the Department of Mineral Resources titles office.
Upon completion the Purchaser is obliged to, before 1 December 2014, pay
Aquarius a total cash consideration of $27 million. Upon receipt of the
proceeds Aquarius is obliged to pay the previous owners of the Kruidfontein
prospecting right $10.8 million in cash or Aquarius shares, at Aquarius' sole
election.
The Blue Ridge Transaction is subject to the fulfilment of 34
conditions precedent. Substantial progress has been made in terms of
fulfilling the conditions, but a number of conditions have yet to be
fulfilled. Aquarius' legal advice is that there appears to be no reason why
the remaining conditions precedent should not be fulfilled in due course. This
notwithstanding, shareholders are cautioned that the Blue Ridge Transaction
involves many parties, and requires the approval of numerous regulators in
South Africa as well as in the People's Republic of China (PRC) and hence
execution risk remains significant.
This time line remains the company's base case expectation. Work in
relation to the fulfilment of the conditions precedent, noted in the releases,
continues. Shareholders will be informed of any material developments in this
regard as soon as is practical.
Appointment of Chief Operating Officer
Mr. Rob Schroder, Managing Director of AQPSA, has been appointed to
the newly created position of Chief Operating Officer (COO) of the Aquarius
Group. Mr. Schroder will continue with his role as MD of AQPSA and will have
oversight over the Group's entire mining operations. The appointment of Mr
Schroder as COO reflects the confidence which the Board of Aquarius has in Mr
Schroder and is due recognition for the key role which Mr Schroder continues
to fulfil across the Group's operations.
More information on all corporate matters can be found at
www.aquariusplatinum.com
See www.aquariusplatinum.com for statistical information
Aquarius Platinum Limited
Incorporated in Bermuda
Exempt company number 26290
Board of Directors
Nicholas Sibley 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 Non-executive
Sebotsa
Audit/Risk Committee
David Dix (Chairman)
Tim Freshwater
Edward Haslam
Kofi Morna
Nicholas Sibley
Remuneration Committee
Edward Haslam (Chairman)
David Dix
Zwelakhe Mankazana
Nicholas Sibley
Nomination Committee
Sonja de Bruyn Sebotsa (Chairman)
Edward Haslam
Tim Freshwater
Kofi Morna
Willi Boehm
Company Secretary
Willi Boehm
AQPSA Management
Robert Schroder Managing Director
Jean Nel Executive Director
Wessel Phumo 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 30 June 2014, the Company had on issue 1,464,310,359 fully paid
common shares.
Substantial shareholders 30 June 2014 Number of shares Percentage
HSBC Custody Nominees (Australia) Limited
110,254,065 7.53
JP Morgan Nominees Australia Limited 69,919,771 4.77
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
Canary Wharf 58 Mounts Bay Road, FirstRand Bank
London E14 4BB Perth WA 6000 Limited)
Telephone: +44 (0) 20 Telephone: +61 (0) 8 1 Merchant Place
7623 2323 9488 1400 Cnr of Rivonia Rd and
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 PO Box 7840, Centurion, 0046, South Africa
Address:
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 PO Box 485, South Perth, WA 6951, Australia
Address:
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 or Aquarius Platinum Limited
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 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
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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