AQUARIUS PLATINUM
LIMITED
Production Results
to 31 December 2015
Highlights
- Attributable production from operating mines up 0.5% compared
to previous corresponding period, quarter ended December 2014(pcp), but lower by 4%
quarter-on-quarter
- Kroondal recorded its highest Q2 production since 2011 and
production at both Kroondal and Mimosa well ahead of guidance
- Average US$ PGM basket price decreased 7% for the quarter –
down 27% compared to pcp
- Kroondal PGM basket price increased 3% on average (due to the
10% weakness in the ZAR/Dollar exchange rate) to R11,206 per PGM
ounce quarter-on-quarter - down 12% compared to the pcp
- Mimosa PGM basket price decreased 12% on average to
$890 per PGM ounce quarter-on-quarter
- down 26% compared to the pcp
- The Rand weakened against the US Dollar 10% on average
quarter-on-quarter – down 23% compared to the pcp
- Cash costs at Kroondal were slightly down to R9,112 per PGM
ounce quarter-on-quarter – up 2% compared to the pcp
- Cash costs at Mimosa further reduced by 3% to $772 per PGM ounce quarter-on-quarter - down 2%
compared to the pcp
- Track record of excellent cost management continues with costs
at both Kroondal and Mimosa at lower levels than 3 years ago
despite substantial increases input costs such as labour,
electricity and other costs
- Aquarius redeemed the outstanding Convertible Bonds which it
issued in December 2009 at their
principal amount outstanding of $125
million in the quarter
- Cash balance at quarter end of $42
million with a further $2
million attributable to Aquarius in JV entities.
|
Q2 2016 Operating Results Summary |
|
Kroondal |
Mimosa |
PlatMile |
4E PGM
production |
|
|
|
Total
(100% basis) |
114,842 |
58,019 |
2,968 |
Attributable |
57,421 |
29,010 |
2968 |
4E basket
price |
|
|
|
R/oz |
11,204 |
|
10,743 |
$/oz |
797 |
818 |
756 |
Cash costs (4E
basis) |
|
|
|
R/oz |
9,112 |
|
8,377 |
$/oz |
648 |
772 |
590 |
|
|
|
|
Cash margin
(%) |
(7) |
4 |
(1) |
|
|
|
|
Stay-in-business
capex |
|
|
|
R/oz |
754 |
|
- |
$/oz |
54 |
186.37 |
- |
Commenting on the results,
Jean Nel, CEO Aquarius Platinum
said:
Both Kroondal and Mimosa produced
ahead of guidance and at reduced costs during the quarter.
Kroondal’s production performance deserves particular mention as Q2
was Kroondal’s 12th consecutive quarter of higher than
105 000 PGM quarterly production and H1 production was highest
since 2007. The fact that both Kroondal and Mimosa’s PGM unit costs
are lower today than 3 years ago despite steep increases in labour,
electricity and other costs is testimony to excellent operational
management for which Rob Schroder
and Winston Chitando and their teams deserve credit. That said, the
lower PGM prices experienced during the quarter impacted both
Kroondal and Mimosa. In order to ensure sustainability in this
macro environment (US$ 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.
Production by mine attributable to
Aquarius (Operating mines)
PGMs
(4E) |
Quarter ended |
Dec
2015 |
Sept
2015 |
%
Change |
Dec
2014 |
%
Change |
Kroondal |
57,421 |
58,418 |
(2) |
55,557 |
3 |
Mimosa |
29,010 |
31,205 |
(7) |
30,421 |
(5) |
PlatMile |
2,968 |
3,890 |
(24) |
2,996 |
48 |
Total |
89,399 |
93,513 |
(4) |
88,974 |
0.5 |
Average PGM basket prices achieved at
Aquarius operations
US$ per
PGM ounce (4E) |
Quarter ended |
Dec
2015 |
Sept
2015 |
%
Change |
Dec
2014 |
%
Change |
Kroondal |
797 |
852 |
(6) |
1,090 |
(27) |
Mimosa |
818 |
890 |
(8) |
1,111 |
(26) |
Platinum
Mile |
756 |
860 |
(12) |
1,090 |
(31) |
Weighted
Avg. |
802 |
865 |
(7) |
1,097 |
(27) |
Aquarius Group quarterly attributable
production (PGM ounces) to 31 December
2015
See http://www.aquariusplatinum.com/
for graph
PGM markets update
Platinum price fell in the final months of the year, despite
moving 9.8% higher across October, ending the quarter below the
$900/oz level to finish at circa
$877, a fall of 1.2% across the
quarter. Palladium prices also moved lower across the period,
falling significantly in November as the metal fell over 18%,
stabalising across December to finish around the $562/oz level.
Macro concerns continued to impact the prices of precious metals
with the main factors impacting demand across the month including:
impact of the VW scandal and continued demand and supply concerns
of the PGM complex in China.
The impact of the VW “dieselgate” scandal intially saw a
decrease in the demand for Platinum and an increase in Palladium
demand throughout late September. However, despite an initial rally
for Palladium, gains were rapidly given back as Palladium prices
fell through US$600/oz. The longer
term implications of the VW issue remain somewhat unclear with
either demand for Palladium increasing as the primary metal for
gasoline catalysts, whilst diesel volume sales will determine the
demand for Platinum as the dominant metal.
Supply in Platinum remained relatively robust and despite weaker
US$ prices, the weakness in the rand and ruble also resulted in a
softer fall in prices for the South African producers which in turn
saw supply remain more resilient. Meanwhile demand looks set to
grow for platinum but the pace of this growth is unclear. Autocats,
which equate to circa 43% of platinum demand, look set to remain
relatively resilient as the US continues the strong run, whilst
threats include movement away from diesel engines following the VW
scandal.
The rand has endured a torrid weakening run, this year, falling
34% across 2015 from the starting level of circa
R11.55/US$1 and breaking through the
R14/US$1 level in early November and
continuing this trend.
Specific PGM prices commentary
The price of Platinum fell 1.2% over the quarter, finishing at
$877/oz with an average price of
$908/oz. Palladium moved
down 13.8% to $563/oz with an average
price of $617 over the quarter. Gold
also reported negative gains across the quarter and reversed gains
from the last quarter as it moved 4.8% lower, finishing at 1061/oz,
with an average price of $1104/oz.
12 month individual PGM prices to 31
December 2015 (US$/oz)
12 month PGM basket prices to 31 December
2015 (US$ and ZAR per PGM basket ounce)
See http://www.aquariusplatinum.com/ for graphs
Operating Review Summary (all numbers
on 100% basis)
AQUARIUS PLATINUM (SOUTH
AFRICA) (PTY) LTD (Aquarius Platinum - 100%)
P&SA1 at Kroondal (Aquarius
Platinum – 50%)
- 12-month rolling average DIIR per 200,000 man hours improved
21% to 0.50, quarter on quarter
- Production decreased to 1,873,000 tonnes from 1,934,000 tonnes,
quarter-on-quarter
- Head grade decreased to 2.45 g/t from 2.50 g/t
- Recoveries increased by 1% to 80%
- Volumes processed lower at 1,810,000 tonnes
- Stockpiles at the end of the quarter totalled approximately
205,341 tonnes
- PGM production decreased by 2% to 114,842 PGM ounces,
quarter-on-quarter
- Revenue in Rand terms increased by 4% to R978 million,
quarter-on-quarter, due to the weakening of the rand
- Mining cash costs decreased by 1% to R578 per tonne
- Unit cost per PGM ounce decreased 0.1% to R9,112 per PGM ounce,
Kroondal’s cash margin for the period improved from -13% to
-7%
Kroondal: Production, Cash Cost and
Price Analysis
See http://www.aquariusplatinum.com/
for graph
|
Capital
Expenditure |
|
|
Kroondal |
|
(R’000 unless
otherwise stated) |
Total |
Per 4E oz |
|
Ongoing establishment
of infrastructure |
83,958 |
731 |
|
Project capital |
2,688 |
23 |
|
Mobile equipment |
18,787 |
164 |
|
Total |
105,432 |
918 |
Commentary
Kroondal:
The 3 month DIIR rate increased from 0.38 to 0.48 (two
additional accidents in the current quarter) however the 12 month
DIIR improved to 0.50 from 0.65. Seven Section 54 instructions were
issued during the quarter.
Production at Kroondal for the quarter was down 3% to 1,873,000
tons quarter-on-quarter due to production challenges at Simunye and
Kopaneng however was credibly up 4% compared to the previous
corresponding quarter, December 2014
(pcp).
Kroondal achieved its twelfth consecutive +105,000 PGM
production quarter. Unit costs in Rand terms continued to respond
positively down 0.1% quarter on quarter and up 2% compared to the
PCP in spite of South Africa’s inflation rate of approximately
6%.
Bambanani, K6 and Kwezi produced ahead of business plan.
Kopaneng focussed on improving safety and showed a positive
production improvement in the last month of the quarter. Simunye’s
challenge with machine availability continued during the quarter
and resulted in some structural changes in the machine maintenance
methodology. The December break was used to complete additional
maintenance and repairs to certain units in the fleet.
The raise bore hole at Kopaneng was holed, during the Quarter
and equipping is expected to be completed in Quarter three. Both
the other two raise bore holes scheduled for BP 16, at Simunye and
Kwezi are on schedule with the piloting having been started at
Simunye.
Grade declined for the quarter and management control systems
were improved on to assist in the general management of ore quality
delivered, these include waste management/ accounting and also real
time Stope Width recording and reporting.
Although the plants managed to improve on recoveries, production
for the quarter was down due to a section 54 issued against the K2
plant which resulted in AQPSA delivering reduced ounces for the
quarter.
Operating cash costs per ounce
Unit cash cost per PGM ounce in Dollar terms (before by-product
credits) was 9% lower quarter-on-quarter mainly due to the weaker
Rand which depreciated 10% quarter-on-quarter. Dollar unit cash
costs compared to the pcp were 19% lower due to a 26% weakness in
the Rand.
In Rand terms, Kroondal's unit costs for the three months to
31 December 2015 were 0.1% lower and
only increased 2% compared to the pcp. This is a very credible
performance with operating costs contained below inflationary
levels of approximately 6% for the third consecutive year.
Kroondal mine: reconciliation of cash
costs per 4E ounce
|
Cost per 4E ounce (Rand) |
|
Q2
2016 |
Q1
2016 |
Total
operating expenditure |
10,255 |
10,249 |
Less: |
|
|
Ongoing capital expenditure & mobile equipment |
(895) |
(619) |
Project capex |
(23) |
(46) |
Transferred from/(to) stockpile |
(225) |
(461) |
On
mine cash costs |
9,112 |
9,123 |
MIMOSA INVESTMENTS (Aquarius Platinum
– 50%)
- 12-month rolling average DIIR was 0.21 per 200,000 man hours
worked
- Production increased marginally to 656,844 tonnes,
quarter-on-quarter
- Head grade decreased by 1% to 3.63 g/t, quarter-on-quarter
- Recoveries were consistent at 78.6%
- Volumes processed decreased by 5 % to 638,652 tonnes
- Stockpiles at the end of the quarter decreased by
2% to 133,219 tonnes
- PGM production decreased by 4% compared to PCP and by 7% to
58,019 PGM ounces quarter-on-quarter
- Revenue decreased by 13% to $46
million from $53 million
quarter-on-quarter
- Mining cash costs per PGM ounce at $772, was 3% lower quarter-on-quarter
- Stay-in-business capital expenditure was $186 per PGM ounce for the quarter
- Gross cash profit margin for the period increased from 4% to
7%
Mimosa: Production, Cash Cost and
Price Analysis
See http://www.aquariusplatinum.com/
for graph
Safety, Health and Environment
- No fatality was recorded during the quarter.
- Two LTIs were recorded during the quarter.
- No restricted work case was recorded during the quarter.
- Three minor injuries occurred during the quarter.
- The 12 month rolling LTIFR as at the end of the quarter was
0.13.
Regretfully subsequent to the end of the quarter an employee was
fatally injured whilst working underground on 4 January 2016.
There were no other injuries.
Operations
Operating cash costs per ounce
Unit cash cost per PGM ounce (before by-product credits) were 3%
below the previous quarter. In response to the sharply lower metal
prices, Mimosa implemented a number of significant cost cutting
initiatives during the quarter which will result in operating costs
reducing significantly in H2.
Capital expenditure
Total capital expenditure for the second quarter amounted to
$10.8 million. Expenditure was
incurred mainly on mobile equipment, support & drill rigs and
LHDs, the conveyor belt extension, down dip development and
ventilation walls.
Mining operations
Mimosa mine operated very well during the quarter, with cordial
industrial relations and meeting most of its production targets. A
total of 651,629 tonnes of ore were blasted for the quarter under
review with blasted grades of 1.910g/t Pt. and 0.158% Ni. The
blasted tonnage represents a 2.7% increase compared to the previous
quarter’s 634,396 tonnes. Most teams mined through poor ground
conditions during the quarter resulting in preparation constraining
the ore generation cycle.
Hoisted tonnage for the quarter at 656,844 tonnes was 0.4% above
previous quarter`s tonnage of 654,127 tonnes. Hoisting performance
is expected to improve in line with the anticipated improvement in
the amount of blasted ore.
Processing plant
The milled tonnage for the second quarter at 638,652Mt was 5%
below the 671,507Mt achieved in the previous quarter. Tonnes milled
were lower in the quarter as a result of plant stoppages associated
with the rainy season mainly lightning which often results in power
dips as well as a breakdown of the plant mill motor.
At 79.1% platinum recovery was slightly less than the 79.2%
achieved in the previous quarter with 4Es recovery at 78.6%
slightly less than 78.7% achieved in the previous quarter. The
Process Team continues to focus on initiatives to improve
recoveries further.
15% Export Levy on un-beneficiated
PGMs/ Deductibility of Royalties
In the 2016 National Budget presentation, the deferment of the
VAT on un-beneficiated platinum to 1 January
2017 was confirmed. However, the subsequent Finance Bill and
Finance Act of 2016 did not include the deferment. Management is
continuing engagements to have the deferment gazetted in a
Statutory Instrument that will give legal effect to the
deferment.
Royalties
The 2016 National Budget was silent on the non-deductibility of
royalties for income tax purposes.
The proposal to render royalties payable by Mimosa
non-deductible for income tax purposes was implemented with effect
from the year of assessment beginning on 1
January 2014, and therefore impacted Mimosa from the start
of the 2014 financial year on 1 July 2013. This position has
remained in the 2016 national budget and hence Mimosa continues to
provide for royalties on a non-deductible basis in its financial
statements. The financial impact of the non-deductibility of
royalties for the six months ended December
2015 was US$1.7 million, 50%
of which is attributable to Aquarius. Negotiations are continuing
with the authorities to confirm that the royalties are deductible
for income tax purposes.
Indigenisation
The Minister of Youth, Indigenisation and Economic Empowerment
gazetted the frameworks, templates and procedures for implementing
the indigenization policy on the 8th of January 2016. The proposed frameworks simply
provide clarity on the indigenisation law and its implementation,
and the Indigenisation Act remains unchanged.
Mimosa continues to interact with the Ministry of Indigenisation
and Ministry of Mines to work towards a sustainable solution in
relation to indigenisation.
TAILINGS OPERATION
Platinum Mile - PMR (Aquarius Platinum
– 91.7%)
- Material processed decreased 4% to 1,124 million tonnes -
quarter on quarter
- Head grade decreased to 0.57 g/t from 0.58 g/t – quarter
on quarter
- Recoveries decreased to 15%, down from 19% quarter on
quarter
- Production decreased to 2,968 PGM ounces
- PGM ounces Cash costs increased 21% to R8,377 per PGM
ounce
- Revenue decreased to R25 million for the quarter
- Cash margin for the quarter was (1)%, a decrease from 23%
in the previous quarter
Anglo Platinum started the commissioning of their tailings
re-treatment facility in the quarter. During the start-up feed from
this section was understandably erratic and negatively impacted
PMR's flotation stability and recoveries.
At the end of the quarter PMR had implemented feed stability
through level and flow control utilizing UG2 feed to keep the flow
to the rougher circuit constant and maximized, which management
expects should impact recoveries positively.
Operating cash costs per ounce
|
4E
(Pt+Pd+Rh+Au) |
6E
(Pt+Pd+Rh+Ir+Ru+Au) |
4E
net of by-products
(Ni, Cu& Co) |
Platinum
Mile |
8,377 |
7,257 |
6,745 |
MINES UNDER CARE AND MAINTENANCE
P&SA2 at Marikana (Aquarius
Platinum – 50%)
Given the continuing low Rand PGM basket prices, Marikana 4
shaft, the remaining operating shaft, and the processing plant at
Marikana continue on care and maintenance until further notice.
Chromite Tailings Retreatment Plant
(CTRP) (Aquarius Platinum – 50%)
This operation remains on care and maintenance.
CORPORATE MATTERS
Convertible bonds
Aquarius Platinum Limited (Company) redeemed the
outstanding Convertible Bonds which it issued in December 2009 (Convertible Bonds).
The Convertible Bonds were redeemed at their principal amount
outstanding of $125.4 million.
Update on Takeover Offer
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.
Annual General Meeting
Aquarius Platinum Limited advise that the resolutions put to the
meeting on 18 January 2016 were
carried by the requisite majority.
Statistical information: Kroondal
P&SA1
See http://www.aquariusplatinum.com/
for statistical information
Statistical information: Mimosa
See http://www.aquariusplatinum.com/
for statistical information
Statistical information: Platinum
Mile
See http://www.aquariusplatinum.com/
for statistical information
Issued capital
At 31 December 2015, the Company
had on issue: 1,508,344,873 fully paid common shares.
Substantial
shareholders 31 December 2015 |
Number of Shares |
Percentage |
HSBC Custody Nominees
(Australia) Limited |
108,473,857 |
7.19 |
Chase Nominees
Limited |
58,565,718 |
3.88 |
Primary Listing: |
Australian Securities Exchange
(AQP.AX) |
Trading Information |
Premium Listing: |
London Stock Exchange (AQP.L) |
ISIN number BMG0440M1284 |
Secondary Listing: |
JSE Limited (AQP.ZA) |
ADR ISIN number US03840M2089 |
|
|
Convertible bond ISIN number
XS0470482067 |
Broker
(LSE) |
Broker
(ASX) |
Sponsor
(JSE) |
Barclays
5 The North Colonnade
Canary Wharf
London E14 4BB
Telephone: +44 (0) 20 7623 2323
|
Euroz
Securities
Level 18 Alluvion
58 Mounts Bay Road,
Perth WA 6000
Telephone: +61 (0) 8 9488 1400
|
Rand
Merchant Bank
(A division of FirstRand Bank Limited)
1 Merchant Place
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
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, SOUTHPOINT, 100 Mill Point Road, 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:
Jean Nel
+27 (0)10 001 2843 |
In
Australia:
Willi Boehm
+61 (0) 8 9367 5211 |