Johannesburg - Aquarius Platinum shares on the JSE yesterday rose on news of production improvements and cost cuts in the June quarter.
The platinum producer’s shares rose by as much 6.72 percent to R1.27 yesterday before closing the day 5.04 percent higher at R1.25.
The Bermuda-headquartered company, which operates in Zimbabwe and South Africa, said it had cut mining costs by 4 percent at Kroondal to R581 a ton due to improved volumes.
Weaker-than-expected Chinese consumption, in an over-supplied market, drove platinum prices to a six-year low earlier this month.
Aquarius said platinum group metal (PGM) output had increased by 5 percent quarter on quarter to 88 803 ounces. PGM production was 83 499 ounces in the comparative quarter last year.
Revenue increased marginally by 0.4 percent quarter on quarter to R1.097 billion.
Imara SP Reid analyst Sibonginkosi Nyanga said Aquarius had delivered a consistent performance this year, but said the sliding platinum price would be a challenge.
“Production is above guidance and costs have been coming down,” Nyanga said.
Unit costs per platinum ounce were down 4 percent to R9 201 an ounce in line with increased output. The average platinum basket price was down 16 percent to $1 006 (about R12 690) an ounce in the quarter from $1 194 an ounce in the June quarter last year.
“Prices are continuously going down, which is negative for revenue growth and margins,” Nyanga said.
Aquarius chief executive Jean Nel gave credit to the operating teams at the Kroondal and Mimosa mines for their disciplined approach.
“The lower metal prices… will not only require an increased focus on safety, cost and production discipline, an approach which Aquarius will remain committed to, but also a focused assessment of the viability of each shaft at each operating mine to ensure the sustainability of the business in a low metal price environment,” Nel said.
Aquarius said that, given the continuing low platinum prices, its Marikana 4 shaft and the processing plant at Marikana remained on care and maintenance until further notice.
Aquarius is selling its Everest mine and ancillary mining and processing infrastructure and immovable properties to Northam Platinum for R450 million.
Business Report