JOHANNESBURG (miningweekly.com) − JSE- and TSX-listed platinum company Anooraq Resources saw its production increase by 27% quarter-on-quarter for the period ended June 30, but it posted a net loss of C$44.3-million, the miner reported on Monday.

Second-quarter production during the quarter increased to 28 119 oz, and the mine concentrator milled 266 866 t, 21% higher than the first quarter of the year, and 6% lower than the corresponding period in 2010.

Revenue for the period was C$35.9-million, a 17% quarter-on-quarter increase and a 6% decrease when compared to the corresponding period in 2010.

The company attributed its operating loss of C$9.8-million to increased operating cost spend, primarily surrounding the accelerated development programme at operations.

A large portion of the net loss, which widened from C$19.9-million a year earlier, was  attributed to financing charges resulting from debt obligations owing to Anglo Platinum, forming the subject matter of refinancing initiatives currently under negotiation.

Both companies have now completed a strategic review of the Bokoni group asset base and are in negotiations in respect of the restructuring, recapitalisation and refinancing of the Bokoni Group and Anooraq.

Further, CEO Harold Motaung said the second quarter saw the company continue to drive initiatives at mine level, so that the correct fundamentals were in place to ensure that a foundation for continued improvements in operational and financial performance was achieved in future.

However, he said the company was starting to see volume trend improvements at operations in stoping and development. “There is a need to decrease operating costs, particularly in light of current wage trends in the mining industry, and continued inflationary pressures associated with key input costs at the operations.”

Both the Brakfontein Merensky and Middelpunt Hill UG2 ramp-up projects showed improved performance. The Bokoni mine is a ramp-up operation with two decline shaft systems under construction.

Motaung said the focus for the mine remained ensuring that two key ramp-up projects were established on a proper foundation, with primary development within the capital footprint being adequately supplemented by secondary development, in order to ensure that sufficient mining flexibility is created for stoping crews on operating levels.

The miner's target remains for the Bokoni operations to achieve positive free cash flow after all capital expenditure at the operations.

“At the current Rand platinum-group metal (PGM) revenue basket price, this requires an improved effort on operating efficiencies and an active effort on cost management from current levels,” Motaung said.

The average dollar PGM basket price decreased by 2% quarter-on-quarter to $1 430 and the rand PGM basket price decreased by 5% to R9 726, compared to the first quarter of the year.

Meanwhile, operations achieved a recovered grade of 3.27 g/t (4E) for the quarter, a 4.5% increase quarter-on-quarter but a 19% decrease when compared to the same period in 2010.

With regard to the grade, key challenges remained, with delivered grade being negatively impacted by increased redevelopment and subdevelopment being undertaken at the operations, and recovered grades being negatively impacted by challenges at the concentrator plant including a number of unplanned mill stoppages during the quarter.

With regard to safety, the lost-time injury frequency rate at the Bokoni operation improved by 25% quarter-on-quarter to 1.47 for every 200 000 hours worked, with no fatalities.

The serious injury frequency rate also improved by 26% quarter-on-quarter to 0.80 for every 200 000 hours worked. By mid-July, Bokoni had achieved one-million fatality-free shifts.

The company is currently engaged in wage negotiations with three representative unions at Bokoni, independent of Anglo Platinum’s wage negotiation process.

“To date, interactions with unions have been constructive and the company hopes to finalise these negotiations during the third quarter,” Anooraq said in a statement.

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