Aquarius Platinum’s output increases

File image: Reuters

File image: Reuters

Published Jan 29, 2013

Share

Johannesburg - Aquarius Platinum (AQP) has reported a 2% rise in attributable production from its operating mines in the quarter ended December to 78‚987 ounces.

The average Platinum Group Metals (PGM) basket price increased 5% for the quarter in US dollar terms‚ while the rand weakened against the USD by 4% on average quarter-on-quarter‚ the company noted in its production update on Tuesday.

Among the highlights of the quarter were a 7% decline in cash costs at Kroondal to R8‚403 per PGM ounce quarter-on-quarter. However‚ cash costs at Mimosa increased 8% to $897 per PGM ounce quarter-on-quarter. Mimosa and the Zimbabwe government agreed commercial terms on Indigenisation and signed a term sheet.

Commenting on the results Aquarius CEO Jean Nel said the December quarter had been yet another challenging one‚ during which industrial relations in South Africa remained strained and metal prices remained low.

“The Aquarius management team persisted with its focus on restoring operational credibility at its Kroondal mine. In this regard I am very pleased to report that both of the significant processes we committed to were completed in time and below budget‚ being the migration to owner operator and the implementation of the revised hanging wall support regime‚” he said.

The implementation of these two initiatives‚ combined with a focussed and motivated work force at Kroondal contributed to Kroondal’s production exceeding 100‚000 4E ounces for the quarter for the first time since the Dec 2010 quarter‚ notably at reduced on mine unit costs‚ down 7% for the quarter.

“Given the macro environment in the industry this was a pleasing performance‚” he added.

Mimosa’s solid production performance continued‚ but costs during the quarter disappointed.

Mimosa management team is focussed on addressing costs having implemented a number of initiatives.

“The conclusion of the indigenisation agreement between Mimosa and the Government of Zimbabwe was particularly pleasing and Winston Chitando (MD: Mimosa) played a pivotal role in this regard‚” Nel added.

“The satisfactory operational improvements notwithstanding‚ Aquarius remains acutely aware that despite the improvements‚ the company continued to consume cash during the quarter. The price improvements and the weakened R/$ exchange rate in January 2013 combined with the fact that the once-off costs associated with the two aforementioned processes have been completed‚ is expected to substantially reduce cash consumption and enable to company to start producing cash at mine level‚” Nel noted.

From a PGM supply and demand perspective there seems to be consensus that both platinum and palladium will move into primary supply deficit during 2013.

While encouraging the increase in recycling‚ the continued depressed demand from the auto producers and the substantial above ground inventories renders significant further price increases unlikely‚ he added.

“ Fact remains that despite the significant operational improvements‚ cash generation at current spot prices remains constrained. It is against this backdrop that management continues to focus on cash preservation and operational stability and improvements. The Company is also focused on playing a positive role in terms of improving relations with the South African and Zimbabwean regulators. Ensuring all stakeholders appreciate what is required for a sustainable industry in future is critical and work in this regard continues‚” he concluded. - I-Net Bridge

Related Topics: