JOHANNESBURG (miningweekly.com) – Attributable production from LSE-listed Aquarius Platinum’s operating mines for the three months ended December increased by 1% quarter-on-quarter and 7% year-on-year, the platinum miner reported on Tuesday.

Cash costs at the company’s 50%-owned Kroondal mine, in South Africa’s North West province, and Mimosa mine, in Zimbabwe, decreased by 5% and 4% respectively.

“The highlight of the second quarter was undoubtedly the continued increase in production and reduction in costs at Mimosa and specifically at Kroondal, which is now consistently producing at levels higher than at any point in its ten-year life,” Aquarius CEO Jean Nel said.

Production from Kroondal increased by 1% quarter-on-quarter, to 1.87-million tonnes, up from 1.85-million tonnes previously, while recoveries improved by 2% to 79%.

The company explained that, while iron-rich ultramafic pegmatite ore was still being mined at the mine’s Kwezi shaft a solution had been found to the issue of recovery by blending the material and increasing flotation retention time in the process plants, thus increasing recoveries.

“The operational record, since Aquarius turned owner-operator continues to impress, with Kroondal consistently producing at levels higher than at any point in its ten-year history,” Liberum Capital commented.

Meanwhile, Nel said production at Mimosa was stable with costs having reduced further, in line with expectations.

Mimosa’s production increased by 1% to 629 101 t during the quarter, while recoveries improved slightly to 78%.

The mine’s cash costs decreased by 1% to $75/t, while the cost for platinum-group metals declined by 4% to $837/oz on higher production.

Nel further pointed out that as Mimosa did not benefit from a weakening currency and the lower dollar, metal prices impacted its margin directly.

The continued regulatory uncertainty in Zimbabwe was also of particular concern to Aquarius as it impacted Mimosa's ability to plan future production levels and capital allocation efficiently.

“Discussions with the government of Zimbabwe continue and, seeing as we share the government’s vision for a healthy growing Zimbabwean platinum mining sector, we remain hopeful that matters could be agreed on in due course,” Nel said. 

Liberum added that the Zimbabwean national budget amendments were worrying, to the extent that they would be entirely unpractical to enforce and would likely see the country’s entire platinum industry shut down.

Meanwhile, the company’s South Africa-based Platinum Mile tailings retreatment facility, on platinum producer Anglo Platinum’s (Amplats') Rustenburg platinum mine, experienced reduced levels of production for the quarter following interruptions in its feed caused by industrial action at Amplats, however, it still managed a credible performance for the half year, Aquarius said.

Production at Platinum Mile, which was 91.7% owned by Aquarius, decreased to 1 583 platinum ounces, down 58% quarter-on-quarter, while recoveries decreased to 8%.

Liberum pointed out that Aquarius had a lower risk profile in South Africa than its peers, as it had completed wage negotiations without any strike action.

“It is well placed to benefit from any price appreciation in precious metal prices if the strikes at Anglo Platinum, Impala and Lonmin drag on,” Liberum said.

The company’s Marikana and Everest mines, located in the North West and Mpumalanga respectively, as well as its Chromite Tailings Retreatment Plant, adjacent to the Kroondal mine, remained on care and maintenance.