JOHANNESBURG (miningweekly.com) – JSE-listed Aquarius Platinum recorded a 4% decrease in quarter-on-quarter production to 122 213 platinum-group metals (PGMs) ounces from 127 579 PGM ounces in December 2010. However, attributable production rose 18% from a year earlier.

Aquarius recorded a 9% increase in profit of $25,3-million for the third quarter ended March, up from $23,2-million in the corresponding 2010 quarter, while on-mine earnings before interest, taxes, depreciation, and amortisation were 66% higher at $76,6-million, driven by a 24% increase in production.

CEO Stuart Murray said on Thursday that the company’s third quarter, which incorporates the Christmas and New Year holidays, was historically a weaker period.

“This past quarter saw rather high absenteeism following the breaks, but has also been further affected by a marked increase in stoppages across the industry in South Africa. Aquarius’ South African operations were not immune to this reality, and production was somewhat impacted,” he noted.

Cash costs also increased quarter-on-quarter, largely as a result of the effect of lower production, and should improve to more usual levels during the next quarter, as production increases again.

“The quarter under review also saw some notable successes, with no lost-time injuries at all being recorded at either Mimosa or Marikana mines and a marked improvement in the fortunes of Platinum Mile. We also closed the Afarak transaction shortly after the period end, which we believe enhances the strategic position of Aquarius,” said Murray.

The miner reported that production for the quarter increased to 118 877 PGM ounces from 95 617 oz in March 2010, as a result of the recently recommissioned Everest mine, which produced 27 737 PGM ounces in the quarter, despite still being in ramp-up phase, and a lower number of shifts worked, owing to the Christmas holiday break.

Total cash cost of production was higher at $110-million, in line with the increased production. Aquarius also saw an 18% year-on-year production increase to 122 213 PGM ounces, while revenue was up 42% to $183-million from $128,8-million in March 2010.

Group cash remained strong at $384-million at the end of the quarter, while net operating cash flow of $60,5-million comprised $181-million from sales, $117-million paid to suppliers, income tax paid of $6-million and net finance income of $2-million.

Development and capital expenditure for the quarter was $24,4-million with financing cash outflows comprising the payment of Aquarius’ dividend of 4 c a share of $18,5-million to shareholders.

The volatility in the rand basket price was an important factor as Aquarius moved towards its next financial year. Murray noted that the improving dollar PGM prices were welcome, but the fluctuations of the received basket price in rand terms made planning for projects somewhat difficult.

“Greater focus will be going into ensuring capital projects earn acceptable returns,” he concluded.
 

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.