e1fb7e87-d0ae-4918-96ff-f01f49e6147e.pdf
First Quarter 2016: Production and Financial Results
Production and Financial Results to 30 September 2015
Highlights
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Attributable production from operating mines up 5% quarter-on-quarter, up 8% compared to previous corresponding period, quarter ended September 2014 (pcp)
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Average US$ PGM basket price decreased 14% for the quarter - down 29% compared to pcp
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Kroondal PGM basket price decreased 15% on average to R10,897 per PGM ounce quarter-on-quarter - down 31% compared to the pcp
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Mimosa PGM basket price decreased 12% on average to $890 per PGM ounce quarter-on-quarter - down 26% compared to the pcp
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The Rand weakened against the US Dollar 6% on average quarter-on-quarter - down 19% compared to the pcp
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Cash costs at Kroondal down 1% to R9,123 per PGM ounce quarter-on-quarter - up 1% compared to the pcp
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Cash costs at Mimosa unchanged at $795 per PGM ounce quarter-on-quarter - down 3% compared to the pcp
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Group cash balance at quarter end of $175 million (June 2015: $196 million) with a further $3 million attributable to Aquarius held in JV entities, with the reduced cash balance primarily the result of $12 million unrealised fx adjustments on ZAR cash balances in line with movement following the weaker R:US$ exchange rate and a $4 million CGT payment on the sale of Kruidfontein
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Conclusion of Everest Part B sale post quarter end which is expected to result in a R50 million receipt in November 2015
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Q1 2016 Operating Results Summary
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Kroondal
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Mimosa
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PlatMile
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4E PGM production
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|
Total (100% basis)
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116,836
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62,410
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3,890
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Attributable
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58,418
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31,205
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3,890
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4E basket price
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R/oz
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10,904
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-
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11,154
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$/oz
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852
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890
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860
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Cash costs (4E basis)
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R/oz
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9,123
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-
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6,914
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$/oz
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-
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795
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533
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|
|
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Cash margin (%)
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(13)
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4
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23
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|
|
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Stay-in-business capex
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R/oz
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613
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-
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284
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$/oz
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48
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117
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22
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Commenting on the results, Jean Nel, CEO Aquarius Platinum said:
The quarter was characterised by an excellent operating performance, with Kroondal delivering its 11th consecutive production quarter above 105,000 4E oz's and Mimosa delivered an all-time production record, while both operations delivered reduced costs. Quarterly production from Mimosa and Kroondal attributable to AQP is an all-time company record. As always all the credit for this performance goes to the operational teams.
Despite this disciplined performance profit and cash margins were lower in the quarter following the dramatically lower metal prices with the Dollar PGM basket price 14% lower in the quarter and 29% lower year on year to levels last recorded in 2006.
First Quarter 2016: Production and Financial Results
Given that we see no fundamental reason to be optimistic about PGM prices in the short term management will continue to implement all possible cost savings measures to preserve cash levels.
Lastly, further to the announcement made on 6 October 2015 in which Aquarius and Sibanye jointly announced the conclusion of an implementation agreement in terms of which Sibanye proposed to, subject to fulfilling a number of conditions precedent, acquire all the issued shares of Aquarius, the work streams required to facilitate the special general meeting of Aquarius shareholders to vote on the offer is progressing in line with our expectations and meeting materials will be despatched in due course.
Production by mine attributable to Aquarius (Operating mines)
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PGMs (4E)
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Quarter ended
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Sept 2015
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June 2015
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% Change
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Sept 2014
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% Change
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Kroondal
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58,418
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56,012
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4
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56,124
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4
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Mimosa
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31,205
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30,018
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4
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28,900
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8
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PlatMile
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3,890
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2,773
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40
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1,831
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112
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Total
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93,513
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88,803
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5
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86,855
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8
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Average PGM basket prices achieved at Aquarius operations
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US$ per PGM ounce (4E)
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Quarter ended
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Sept-15
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June-15
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% Change
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Sep-14
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% Change
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Kroondal
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852
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1,005
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(15)
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1,239
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(31)
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Mimosa
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890
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1,010
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(12)
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1,200
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(26)
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Platinum Mile
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860
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978
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(12)
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1,202
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(28)
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Weighted Avg.
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865
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1,006
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(14)
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1,225
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(29)
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Aquarius Group quarterly attributable production (PGM ounces) to 30 September 2015
First Quarter 2016: Production and Financial Results
PGM markets update
The price of Platinum fell 16% over the quarter, confirming the weakest quarterly performance for platinum since 2008, finishing at $903 per ounce with an average price of $991 per ounce. Palladium moved down 6% to
$697 per ounce with an average price of $617 over the quarter. Gold was the strongest performer of the three metals however also reported negative gains over the quarter moving 5% lower, and despite positive performance across August and September finished around the $1,169 per ounce level with an average price of
$1,125.
Macro concerns continued to impact the prices of precious metals with the main factors impacting demand across the month including: Chinese macro growth concerns, the quantum of above ground precious metal stocks, and, post quarter end, the VW news. Platinum fell to an eight-year low and palladium reached the lowest level since 2012 on speculation off over supply amid slowing demand from China.
The VW 'dieselgate' scandal was incrementally negative to diesel demand and thus platinum demand. The USD continued to strengthen during the quarter, with the Rand falling 6% against the dollar over the quarter, as US interest rate speculation remained a key driver for the continued strength and volatility particularly across September.
The outflows from the various ETF's have also highlighted investor preference for palladium over platinum. Since the price correction in August platinum ETFs have seen steady outflows, whilst Palladium ETF's have seen some renewed inflows.
12-month individual PGM prices to 30 September 2015 (US$/oz)
12-month PGM basket prices to 30 September 2015 (US$ and ZAR per PGM basket ounce)
ZAR/US$
12-month ZAR price to 30 September 2015 (ZAR/US$)
14.25
13.75
13.25
12.75
12.25
11.75
11.25
10.75
10.25
Sep 14 Dec 14 Mar 15 Jun 15 Sep 15
First Quarter 2016: Production and Financial Results
Financials
Aquarius recorded an on-mine EBITDA profit of $2.5 million for the quarter ended 30 September 2015, down
$12.3 million compared to the pcp.
Aquarius' share of profit from joint venture entities (Mimosa) was a loss of $2 million, a $9 million reduction compared to the pcp. The consolidated result of the Group (IFRS) was a net loss after tax of $12.3 million, down from a profit of $5 million in the pcp.
The lower result compared to the pcp was due entirely to significantly lower PGM prices which were down 29% in Dollar terms negative pipeline sales adjustment of $6 million at Kroondal. This impacted directly on revenue which was down 35% to $40 million, compared to $62 million in the pcp. In Rand terms, aggregate revenue increased 22% compared to the pcp due to the impact of a 19% depreciation in the Rand. JV entity Mimosa's revenue was similarly impacted by lower PGM prices as well as a negative pipeline sales adjustment of $5 million.
Profit & Production Summary
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Sept 2015 Quarter
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Aquarius operations
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JV entities
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Total
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Consolidation adjustment
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Aquarius Group
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Mine EBITDA
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$2.5M
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$1.4M
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$3.9M
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($1.4M)
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$2.5M
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Revenue
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$40.3M
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$26.5M
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$66.8M
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($26.5M)
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$40.3M
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Cost of sales
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($48.0M)
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($28.7M)
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($76.7M)
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$28.7M
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($48.0M)
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Net profit/(loss) after tax
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($10.2M)
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($2.1M)
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($12.3M)
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$1.0M
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($12.3M)
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PGM ozs production
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62,308
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31,205
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93,513
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-
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93,513
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Production for the quarter was 93,513 PGM ounces, an 8% increase compared to the pcp and 5% higher quarter- on-quarter. Kroondal continued to excel with production up 4% compared to both the pcp and also quarter-on- quarter. Production at PlatMile was also higher be it of a low base. Production at joint venture entity Mimosa remained consistently good up 8% compared to the pcp and up 4% quarter-on-quarter.
Total cost of sales of $48 million was 15% lower compared to the pcp, despite an 8% increase in production due to a 19% weakening in the Rand/Dollar exchange rate. In Rand terms, total cost of sales were 2% higher compared to the pcp, a credible performance given the 8% increase in production.
On a cash cost basis, Kroondal's cash costs per ounce in Rand terms increased 1% compared to the pcp and decreased by 15% in Dollar terms due to the weaker Rand. Compared to the previous quarter June 2015, Kroondal's cash costs per PGM ounce decreased 1% in Rand terms and 7% in Dollar terms. Mimosa's cash costs per PGM ounce decreased 3% compared to the pcp and remained unchanged compared quarter-on-quarter.
Depreciation and amortisation for the quarter was $4.5 million.
Administrative costs of $1 million remain controlled and in line with expectation. Finance costs include interest paid on borrowings of $1.5 million, non-cash interest accretion on convertible bonds of $1.2 million and the unwinding of the rehabilitation provision of $1.1 million.
Net operating cash outflow for the quarter of $9 million comprised $52 million inflow from sales, $62 million paid to suppliers and $1 million interest received. Development and capital expenditure for the quarter was $3 million. Net financing cash inflows of $2.8 million included dividends of $4 million from Mimosa, $0.5 million repayment of AQPSA finance leases and $0.5 million loans to joint venture entities.