AQUARIUS PLATINUM LIMITED
Fourth Quarter 2014: Production Results
Production Results to 30 June 2014
Highlights
Attributable production from operating mines up 4% quarter-on-quarter, down 1%
compared to previous corresponding period (pcp)
Average PGM basket price increased 3% for the quarter - down 1% compared to
pcp.
Kroondal PGM basket price increased 0.5% on average to R12,822 per PGM ounce
quarter-on-quarter - up 12% compared to the previous year
Mimosa PGM basket price increased 4% on average to $1,156 per PGM ounce
quarter-on-quarter - down 6% compared to the previous year
The Rand strengthened against the US Dollar by 2% on average quarter-on-quarter
- down 18% compared to the previous year
Cash costs at Kroondal unchanged at R9,396 per PGM ounce quarter-on-quarter -
up 9% compared to the previous year
Cash costs at Mimosa net of "one off voluntary retrenchment costs" were down
10% to $803 per PGM ounce quarter-on-quarter - down 2% compared to the previous
year. Cash costs at Mimosa inclusive of "one off voluntary retrenchment costs"
of $105 per PGM oz increased 2% to $908 per PGM ounce quarter-on-quarter - up
1% compared to the previous year.
Surface stockpile at Mimosa increased - now 165,000 tonnes
Post quarter end, three year wage agreements were concluded with recognised
unions at Kroondal without any interruptions to operations
Q4 2014 Operating Results
Summary
Kroondal Mimosa Platinum Mile
4E PGM production
Total (100% basis) 106,181 60,818 0
Attributable 53,090 30,409 0
4E basket price
R/oz 12,822 - -
$/oz 1,215 1,156 -
Cash costs (4E
basis)
R/oz 9,396 - -
$/oz 890 908* -
Cash margin (%) 17 30 -
Stay-in-business
capex
R/oz 1,123 - -
$/oz 106 99.74 -
Includes one off voluntary retrenchment costs of $105 per 4E oz
Commenting on the results, Jean Nel, CEO Aquarius Platinum said:
The Group's fourth quarter performance was credible, with both Kroondal and
Mimosa delivering safety, production and cost performances ahead of guidance.
Kroondal produced in excess of 105 000 4E ounces for a record 6th consecutive
quarter, despite the interruptions from the public holidays and South African
national elections. The successful conclusion of three year wage agreements
with represented unions at Kroondal without any production interruptions post
quarter-end was also very pleasing and testimony to good labour relations
between Kroondal and its work force as well as represented unions.
Mimosa delivered an equally credible production and cost performance despite
implementing a significant voluntary retrenchment program during the quarter.
This program is expected to contribute to lower costs at Mimosa going forward.
At a corporate level Aquarius successfully completed the rights offer and
limited convertible bond tender offer, reducing the debt owing to bond holders
from $298 million to US$125 million. Following the completion of the combined
transactions Aquarius also has significantly increased cash balances.
Although post quarter end metal prices started to increase, the result of this
increase is not yet evident in the quarter's results as metal prices in Dollar
terms only increased 2% for Kroondal compared to pcp, Mimosa's basket price was
5% lower than the pcp.
The slightly higher metal prices notwithstanding, operating conditions remained
challenging during the quarter, and hence as Aquarius enters the new financial
year management will continue with its established focus on safety, production
and cost discipline, whilst carefully assessing its project pipeline, pursuing
only those projects which add value to shareholders.
Production by mine
Quarter ended
PGMs (4E)
Jun 2014 Mar 2014 % Change Jun 2013 % Change
Kroondal 106,181 107,818 (2) 106,872 (1)
Mimosa 60,818 51,907 17 57,168 6
Platinum Mile - 289 (100) 4,810 (100)
Total 166,999 160,014 4 168,850 (1)
Production by mine attributable to Aquarius (Operating mines)
Quarter ended
PGMs (4E)
Jun 2014 Mar 2014 % Change Jun 2013 % Change
Kroondal 53,090 53,909 (2) 53,436 (1)
Mimosa 30,409 25,954 17 28,584 6
Platinum Mile - 289 (100) 4,810 (100)
Total 83,499 80,152 4 86,830 (4)
Aquarius Group quarterly attributable production (PGM ounces) to 30 June 2014
See www.aquariusplatinum.com for graph
PGM markets update
Platinum traded robustly through the recently concluded strike action in South
Africa, with the Platinum price supported to a degree by lost production.
Relatively muted price appreciation has largely been attributed to the fact
that market participants were able to partially negate the associated
production disruption by the build-up in above-ground stocks, with the strike
action being well flagged throughout 2013.
Palladium has traded strongly so far this year, rising above $800 per ounce and
remaining at its highest levels since 2011 underpinned by a combination of
factors including a recovery in global auto sales, labour issues in South
Africa and increasing substitution of platinum. Intra-period scaling and price
volatility is mostly attributed to Russia-Ukraine geopolitical tensions and
associated trade sanctions which could potentially have a fundamental impact on
supply / demand balance for the metal going forward.
Demand continued to be robust for the platinum ETP in the quarter, reaching
continued record holdings, resulting in more metal being taken out of the
market. The recent release of the Palladium ETF has proved to be a catalyst for
investment growth during the quarter.
The South African Rand has traded in a relatively narrow range of R10.30-10.84
during the quarter, and daily trading volumes have moderated relative to the
levels seen last year. The Rand closed the quarter relatively unchanged at
R10.59 compared to the previous period end.
European vehicle sales have climbed over the course of last 3 months amidst
improving consumer confidence. Introduction and implementation of Euro VI
emissions legislation have also provided support to PGM prices. Aside from the
growth in Europe and the US, growth elsewhere appears to still be making up the
ground lost during the Polar Vortex with China continuing to impress with rapid
growth in auto sales volumes (+11.6% YTD).
Specific PGM prices commentary
The average platinum price increased by 1.3%, while palladium increased by 9.4%
and lesser traded rhodium increased by 3.8% from previous quarter. Gold
decreased by 0.2% on average. Platinum closed the quarter up 4.8% at $1,486 per
ounce, while palladium rose by 8.6% to $843 per ounce and rhodium decreased by
1.3% to $1,115 in comparison to previous quarter. Gold increased 3.4% to $1,327
per ounce.
12-month individual PGM prices to 30 June 2014
(US$/oz)
12-month PGM basket prices to 30 June 2014
(US$ and ZAR per PGM basket ounce)
12-month ZAR price to 30 June 2014
(ZAR/US$)
See www.aquariusplatinum.com for graphs
Average PGM basket prices achieved at Aquarius operations
Quarter ended
US$ per PGM ounce (4E)
Jun 2014 Mar 2014 % Change Jun 2013 % Change
Kroondal 1,215 1,179 3 1,195 2
Mimosa 1,156 1,112 4 1,217 (5)
Platinum Mile - 1,179 (100) 1,169 (100)
Weighted Avg. 1,194 1,157 3 1,201 (1)
Operating Review Summary (all numbers on 100% basis)
AQUARIUS PLATINUM (SOUTH AFRICA) (PTY) LTD (Aquarius Platinum - 100%)
P&SA 1 at Kroondal (Aquarius Platinum - 50%)
12-month rolling average DIIR improved to 0.73 per 200,000 man hours from 0.98
in the previous quarter Production increased to 1,786,000 tonnes from 1,686,000
tonnes, quarter-on-quarter
Head grade decreased marginally to 2.37 g/t from 2.38 g/t
Recoveries decreased by 0.7% to 78%
Volumes processed higher at 1,788,000 tonnes
Stockpiles at the end of the quarter totalled approximately 35,000 tonnes
PGM production decreased by 2% to 106,181 PGM ounces, quarter-on-quarter
Revenue in Rand terms decreased by 5% to R1,207 million, quarter-on-quarter,
due to a combination of a stronger Rand during the quarter and 2% lower
production
Mining cash costs decreased by 1% to R558 per tonne, due to less stockpile
being consumed
Unit cost per PGM ounce increased 0.2% to R9,396 per PGM ounce
Kroondal's cash margin for the period reduced from 21 % to 17 %
See www.aquariusplatinum .com for graph
Commentary
Kroondal:
The 12 month rolling DIIR improved materially to 0.73 from 0.98 in the previous
quarter as did the 3 months DIIR rate which improved to 0.43 from 0.57. This
follows the continued focus and management of safety performance including in
the implementation of the new Safety programme of "My Life, My responsibility,
I will comply" in September 2013.
Wage agreement reached at Kroondal
Subsequent to the end of the quarter, AQPSA reached separate three-year wage
agreements with the National Union of Mineworkers ("NUM") and Solidarity in
relation to their respective members employed at Kroondal. The agreements are
effective from 1 July 2014, and will be applied to all employees within the
respective bargaining units at Kroondal. The NUM represents the majority of
Kroondal's semi-skilled work force, while Solidarity represents the majority of
Kroondal's skilled work force. Measured on a cost to company basis the average
increase slightly exceeds the increase in the cost of living as measured by
inflation rate (CPI).
Aquarius acknowledges with appreciation the critical contribution that the
employees of Kroondal continue to make to the ongoing safety and operational
improvements at the Kroondal mine; the leadership shown by the Kroondal mine's
management team during the negotiation process and the constructive and mature
manner in which the NUM and Solidarity conducted the wage negotiations.
The successful conclusion of the wage agreements are a significant positive
development for the Company. AQPSA is extremely proud of its workforce which
worked without interruption to maintain its operating performance throughout
the negotiation process.
Production at Kroondal for the quarter of 1.8 million tonnes was achieved again
notwithstanding different challenges that were encountered at operations and in
the general industry, and interruptions due to public holidays and the South
African national elections.
At K6, mining into very challenging ground conditions continued.
Encouragingly, ground conditions appear to be improving with depth.
At Kwezi Shaft challenging ground conditions still persist and in this quarter
the mine continued to reduce the splits further to keep the pillars intact as
they were peeling off due to iron-rich ultramafic pegmatite (IRUP) which is
situated at the bottom of the main seam.
Kopaneng Shaft has now commissioned the underground workshop and the majority
of all TMM (Trackless Mobile Machines) are being parked and serviced
underground.
Simunye Shaft performed very well although the shaft was issued with a Section
54. This was lifted after 2 production days were lost.
Bambanani Shaft commissioned their first underground bunker. The ore being
mined from the Ackermans area is now hoisted through the Bambanani belt
infrastructure. Depleted production panels at Bambanani will be replaced with
panels in the Marikana ground. Compressed air and water services for this area
are provided through Marikana 4 Shaft. In the next quarter 40% of Bambanani
production will be coming from the Marikana 4 Shaft area. Bambanani was also
issued with a Section 54 instruction which was again lifted after 2 production
days.
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.
Everest Mine
Similarly, given the continuing low Rand PGM basket prices, temporary
geological problems and unstable labour relations, the Everest mine remains
placed on care and maintenance until further notice.
AQPSA Operating cash costs per ounce (Rand)
4E 6E 6E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au) (Ni&Cu)
Kroondal 9,396 7,713 7,476
Capital expenditure
Kroondal
(R'000 unless otherwise stated) Total Per 4E oz
Ongoing establishment of infrastructure 88,734 836
Project capital (K6 shaft) 30,486 287
Mobile equipment 52,726 497
Total 171,946 1,620
Kroondal mine: reconciliation of cash costs per 4E ounce
Cost per 4E ounce (Rand)
Q4 Q3
Total operating expenditure 11,025 10,084
Less:
Ongoing capital expenditure & mobile equipment (1,332) (931)
Project capex (K6 shaft) (287) (182)
Transferred from/(to) stockpile (10) 405
On mine cash costs 9,396 9,376
Development of the K6 shaft at Kroondal is almost complete with only minor
surface infrastructure snags and the permanent power construction being
completed during H1 of FY15.
MIMOSA INVESTMENTS (Aquarius Platinum - 50%)
12-month rolling average DIIR was 0.08 per 200,000 man hours worked
Production increased by 9% to 648,944 tonnes, quarter-on-quarter
Head grade static at 3.67 g/t
Recoveries decreased by 0.5% to 77%
Volumes processed increased by 14% to 648,902 tonnes
Stockpiles at the end of the quarter totalled approximately 165,102 tonnes
PGM production increased by 17% to 60,818 PGM ounces quarter-on-quarter, due to
improved stability of the plant. A number of challenges were experienced in the
prior quarter
Revenue increased by 26% to $79 million, from $63m in the previous quarter
Mining cash costs increased by 5% to $85 per tonne, and costs per PGM ounce by
2% to $908 due to retrenchment costs. Cash costs before "one off retrenchment
costs" decreased 10% to $803 per PGM ounce for the quarter.
Stay-in-business capital expenditure was $99.74 per PGM ounce for the quarter
Gross cash profit margin for the period increased from 26% to 30%
See www.aquariusplatinum.com for chart
Operating cash costs per ounce
Unit cash costs per PGM ounce (before by-product credits) were 2% higher than
the previous quarter due to once off retrenchment costs of US$5.3 million.
Cash costs before "one off retrenchment costs" incurred during the quarter
were 10% lower at $803 per PGM ounce.
4E 6E 4E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au)
(Ni, Cu & Co)
Mimosa 908 861 627
Capital expenditure
The total capital expenditure for the fourth quarter amounted to $6.8 million.
Expenditure was incurred mainly on mobile equipment, drill rigs and LHDs, the
conveyor belt extension and down dip development and remains within guidance
provided by the Company.
TAILINGS OPERATION
Platinum Mile (Aquarius Platinum - 91.7%)
The strike at Anglo Platinum resulted in zero production for the quarter ended
June 2014. The strike has since ended and, although significant uncertainty in
relation to the date and level of production recommencement prevail, Plat Mile
expects to commence receiving feed in late July 2014.
Platinum Mile derives its feed-stock from concentrator plant owned and managed
by Anglo Platinum in the Rustenburg area which has been on strike since 25
January 2014. Anglo Platinum has indicated in a press release that production
ramp-up will start once all striking workers have undergone medical
examinations and safety training.
The Coarse Milling Expansion was completed and successfully electromechanically
commissioned during the current quarter. Capital expenditure for the quarter
amounted to R2.3 million and the total CAPEX to complete this expansion was
R25.8 million. The benefits of this expansion on production yields should
become evident in the next quarter.
Operating cash costs per ounce
4E 6E 4E net of by-products
(Pt+Pd+Rh+Au) (Pt+Pd+Rh+Ir+Ru+Au)
(Ni, Cu& Co)
Platinum Mile - - -
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 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 and its interest in the Kruidfontein
prospecting right on 30 January 2014. In the release the company confirmed its
expectation that the conditions precedent would be fulfilled in H2 calendar
2014. 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.
Statistical information: Kroondal P&SA1
See www.aquariusplatinum.com for statistical information table
Statistical information: Mimosa
See www.aquariusplatinum.com for statistical information table
Note:
Mimosa current quarter cash cost per PGM ounce Includes one off voluntary
retrenchment costs of $105 per 4E oz. Unit cash costs for the quarter adjusted
for "once off" voluntary retrenchments were $803 per PGM ounce.
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 Sebotsa Non-executive
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
Herbert Mashanyare Technical Director
Peter Chimboza Resident Director
Fungai Makoni General Manager Finance & Company Secretary
Platinum Mile Management
Richard Atkinson Managing Director
Paul Swart Financial Director
Issued capital
At 30 June 2014, the Company had on issue: 1,464,310,394 fully paid common
shares.
Substantial shareholders 30 June 2014 Number of Shares Percentage
HSBC Custody Nominees (Australia) Limited 110,254,065 7.53
J P Morgan Nominees Australia Limited 69,919,771 4.77
Primary Australian Securities Exchange Trading Information
Listing: (AQP.AX)
Premium London Stock Exchange (AQP.L) ISIN number BMG0440M1284
Listing:
Secondary JSE Limited (AQP.ZA) ADR ISIN number US03840M2089
Listing:
Convertible bond ISIN number
XS0470482067
Broker (LSE)
Broker (ASX) Sponsor (JSE)
Barclays Euroz Securities
5 The North Level 18 Alluvion
Colonnade 58 Mounts Bay Road, Rand Merchant Bank
Canary Wharf Perth WA 6000 (A division of FirstRand Bank
London E14 4BB Telephone: +61 (0) 8 Limited)
Telephone: +44 (0) 9488 1400 1 Merchant Place
20 7623 2323 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 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
+27 (0)10 001 2848 Willi Boehm
+61 (0) 8 9367 5211
Glossary
A$ Australian Dollar
Aquarius Aquarius Platinum Limited
or AQP
APS Aquarius Platinum Corporate Services Pty Ltd
AQPSA Aquarius Platinum (South Africa) (Pty) Ltd
ACS(SA) Aquarius Platinum (SA) Corporate Services (Pty) Ltd
BEE Black Economic Empowerment
BRPM Blue Ridge Platinum Mine
CTRP Chrome Tailings Retreatment Operation. Consortium comprising Aquarius
Platinum (SA) (Corporate Services) (Pty) Limited (ASACS), Ivanhoe
Nickel and Platinum Limited and Sylvania South Africa (Pty) Ltd
(SLVSA).
DIFR Disabling injury frequency rate, being the number of lost-time
injuries expressed as a rate per 1,000,000 man-hours worked
DIIR Disabling injury incidence rate, being the number of lost-time
injuries expressed as a rate per 200,000 man-hours worked
DME formerly South African Government Department of Minerals and Energy
DMR South African Government Department of Mineral Resources, formerly the
DME
Dollar United States Dollar
or $
Everest Everest Platinum Mine
Great A PGE-bearing layer within the Great Dyke Complex in Zimbabwe
Dyke
Reef
GoZ Government of Zimbabwe
g/t Grams per tonne, measurement unit of grade (1g/t = 1 part per million)
JORC Australasian code for reporting of Mineral Resources and Ore Reserves
code
JSE Johannesburg Stock Exchange
Kroondal Kroondal Platinum Mine or P&SA1 at Kroondal
LHD Load haul dump machine
Marikana Marikana Platinum Mine or P&SA2 at Marikana
Mimosa Mimosa Mining Company (Private) Limited
nm Not measured
pcp previous corresponding period
PGE(s) Platinum group elements plus gold. Five metallic elements commonly
(6E) found together which constitute the platinoids (excluding Os
(osmium)). These are Pt (platinum), Pd (palladium), Rh (rhodium), Ru
(ruthenium), Ir (iridium) plus Au (gold)
PGM(s) Platinum group metals plus gold. Aquarius reports PGMs as comprising
(4E) 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
P&SA1 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Kroondal
P&SA2 Pooling & Sharing Agreement between AQPSA and RPM Ltd on Marikana
R South African Rand
Ridge Ridge Mining Limited
ROM Run of mine. The ore from mining which is fed to the concentrator
plant. This is usually a mixture of UG2 ore and waste.
RPM Rustenburg Platinum Mines Limited, a subsidiary of Anglo Platinum
Limited 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