JOHANNESBURG (miningweekly.com) – Triple-listed Aquarius Platinum has lifted attributable production for the quarter ended September 30 by 8% year-on-year to 93 513 oz of platinum-group metals (PGMs).
The group’s Kroondal mine lifted output 4% year-on-year to 58 418 oz in the first quarter of the 2016 financial year, while PlatMile produced 3 890 oz and joint venture (JV) entity Mimosa delivered 31 205 oz – an 8% year-on-year improvement.
Total cost of sales of $48-million was 15% lower year-on-year, owing to a 19% weakening in the rand/dollar exchange rate.
The price of platinum, meanwhile, fell 16% over the quarter, confirming the weakest quarterly performance for platinum since 2008, finishing at $903/oz, with an average price of $991/oz.
Palladium moved down 6% to $697/oz with an average price of $617/oz over the quarter.
“Macroeconomic concerns continued to impact the prices of precious metals, with the main factors impacting demand across the month, including Chinese macroeconomic growth concerns, the quantum of above-ground precious metal stocks and, post quarter-end, the Volkswagen scandal.
“Platinum fell to an eight-year low and palladium reached its lowest level since 2012 on speculation of oversupply amid slowing demand from China,” the group said in a production statement.
Aquarius recorded on-mine earnings before interest, taxes, depreciation and amortisation of $2.5-million for the quarter under review, down
$12.3-million year-on-year.
Aquarius' share of profit from JV entities was a loss of $2-million – a $9-million reduction on the first quarter of the prior year, while the consolidated result of the group was a net loss after tax of $12.3-million, down from a profit of $5-million in the three months to September 2014.
“The lower result was owing to significantly lower PGM prices, which were down 29% in dollar terms and a negative pipeline sales adjustment of $6-million at Kroondal.
“This impacted directly on revenue, which was down 35% to $40-million,” Aquarius noted.
The group closed the quarter with a cash balance of $175-million.
Commenting on the results, CEO Jean Nel said the quarter had been characterised by an “excellent” operating performance, with Kroondal delivering its eleventh consecutive production quarter above 105 000 oz.
“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.
“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-saving measures to preserve cash levels,” he assured shareholders.
Aquarius announced earlier this month that it and gold miner Sibanye Gold had concluded an implementation agreement that could see Sibanye acquire all the issued shares of Aquarius, subject to fulfilling a number of conditions precedent.
Meeting materials were currently being prepared and would be despatched to shareholders, with a shareholders meeting likely to be held by the end of January 2016.