JOHANNESBURG (miningweekly.com) – TSX- and JSE-listed Anooraq Resources said on Thursday that it envisaged generating a profit of around R60-million to R70-million from its operations every quarter by January 2011.

The platinum miner increased its operating profit by 36% during its second quarter ended June 30, to R26,4-million, owing to an improved basket price and rising production volumes as a result of operating improvement efficiencies.

Anooraq CEO Philip Kotze told Mining Weekly Online that the company has taken its Bokoni project from an almost R80-million loss, when it took over the operation from Anglo Platinum about a year ago, and had experienced a continuous growth curve ever since.

He said that the company had benefited from improved metal prices during the reporting quarter, with the average platinum group metals (PGMs) prices up 6% to $1 269/oz.

Kotze predicted that stability would return to the PGMs market during the next 18 months.

"I think markets react too quickly to negative news, and with some of the issues that raised its head in the world economy, PGMs stockpiles were somewhat depleted, that's why we saw a spike in palladium prices over the past few weeks.

"As demand steadily picks up again and return to traditional levels, it can be anticipated that the PGMs basket price will also move positively with this trend."

During the quarter, Anooraq spent R43-million on the development of its Bokoni project and Kotze said that the company had a strong facility in place.

"The first phase of the Bokoni expansion is completely covered and will use about a third of the facility, leaving a balance of around R477,3-million going forward.

"The facility means that our risks have been covered, but it remains our objective to generate capital from our operations and also prepaying our debts."

Anooraq would like to establish a strong track record as a junior mining company that is able to deliver on its assets, thereby also building further confidence in the markets, said Kotze.

Meanwhile, the company was focused on achieving its ambitions of doubling its Bokoni production volumes within the next two years. This would essentially increase volumes from 120 000 oz/y to 240 000oz/y.

During the reporting quarter, the miner increased its metals output by 12% from the previous quarter to 29 924 oz, reflecting certain efficiency improvements that resulted from a labour restructuring carried out during the first quarter.

"Essentially, we moved around 20% of our workforce, which can be a bit traumatic and difficult. We are glad that we have concluded the restructure, which had already started to show very positive results, and do not anticipate any further labour restructures in the foreseeable future."

Kotze said that, going forward, Anooraq would primarily be focused on organic growth, but would still be open for promising merger and acquisition proposals.

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