Lower prices hurt Aquarius

Published Apr 29, 2015

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Johannesburg - Aquarius Platinum had raised its production, but had still posted a loss during the quarter to March because of lower platinum prices, it said yesterday.

For the quarter to March, Aquarius reported a loss of $8.1 million (R97.8m) as the lower platinum price hurt the company.

However, production had improved to 84 792 platinum group metals (PGM) ounces, a 6 percent increase compared with the previous corresponding period.

Despite the loss, Aquarius’ shares on the JSE rose 3.66 percent to R1.70.

The company has interests in three mines: the Kroondal and Platinum Mile mines both near Rustenburg in the North West and the Mimosa mine in Zimbabwe.

Quarter on quarter, production was down 5 percent due to a shorter production quarter.

The company said overall production remained on target for the year.

Aquarius said quarter-on-quarter cash costs at Kroondal had increased 7 percent, “driven by less production shifts and stock pile reduction over Christmas holidays”.

The basket price of PGMs fell by 9 percent compared with the same quarter last year, while the rand weakened by 8 percent. This led to a revenue fall of 2 percent to $50.2m in this quarter compared with the previous quarter.

Mine earnings before tax depreciation and amortisation (Ebitda) rose from $3.6m in the previous quarter to $4.4m.

CREDIBLE RESULT

However, Ebitda in the latest quarter was down by $6.7m from the previous corresponding period last year.

“Despite the challenging operating and macroenvironment, Aquarius recorded another credible operating result and made progress on a number of strategic initiatives during the quarter.

“Most importantly both Kroondal and Mimosa delivered production ahead of guidance and managed to contain annualised cost increases well below inflation,” chief executive Jean Nel said.

For the nine months to March Aquarius reported a net loss of $64.8m. The latest loss was greater than the loss of $13.2m that the company had sustained for the year to June 2014.

The group said it was on course to receive R400m as the first part of the sale of its Everest mine to Northam Platinum, which was first announced on February 10.

Combined operational efforts at the Kroondal and Mimosa mines contributed to the increase in the company’s cash levels to $174m on an attributable basis.

During the quarter to March, the price of platinum fell to its lowest level in more than five years to $1 141 an ounce.

Nel said a key issue during the quarter involved the three platinum producers in Zimbabwe continuing their engagement with the government aimed at resolving the 15 percent royalty on the export of unrefined platinum, which was introduced in January.

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