Significant cost-cutting initiatives by platinum junior Anooraq Resources have enabled the company to move into positive cash flow territory after suc-cessive quarters of running at a cash loss.

CEO Phillip Kotze reports that these initiatives enabled the company to recover from a loss of C$6,8-million to move into positive territory with a current cash flow of C$2,1-million profit.

One of the major initiatives that the company started was changing its cost profile.

During the first half of 2009, the Bokoni platinum mine, on the eastern limb of South Africa’s Bushveld Complex and Anooraq’s only producing mine, was recording a mining cost of R11 000/oz; however, this was when the mine was owned by Anglo Platinum. 
When Anooraq took ownership in the third quarter, this reduced significantly and the company was able to mine at R8 334/oz; this reduced further in the fourth quarter, during which the company mined at R7 537/oz.

This is comparable with far larger, deep-level platinum mines, such as Lonmin’s Marikana operation. 
This is a matter of concern 
because Bokoni is an openpit mine with a current depth of 300 m.

Looking forward, the com-
pany wants to reduce its cost profile even further. 
By June 2010, the company hopes to be mining at R6 700/oz. 
Kotze hopes that this will decrease further to R6 000/oz, by December 2010, and to 
R5 250/oz, by December 2011.

During the last quarter, the company also began a significant labour restructuring programme at Bokoni, which 
it completed at the end of March.

“What the company found was that 40% of the staff at Bokoni were in production while 60% were in services. 
“This was not sustainable, so, with the guidance of labour 
unions, the company moved about 800 staff into new positions,” says Kotze.

Looking to the future, Kotze reports that the company aims to continue its production build- up towards 160 000 t/m by 2013.
When asked if this is ambitious, Kotze replies that, although it is a tough ask, he is confident that it achievable.