Triple-listed Atlatsa Resources Corporation says it has achieved its strongest operating quarter and half-year performance in five years, lifting platinum-group metal (PGM) ounces by 27.5% from 61 897 oz in the first half of 2012 to 78 944 oz for the six months ended June 30.

Similarly, second-quarter production improved by 25.8% to 42 901 oz in the three months ended June, up from the 34 098 oz produced in the second quarter of 2012.

Chief commercial officer Joel Kesler attributed the production upsurge to operational improvements, which included a revised management team at the flagship Bokoni operation, as well as a new productivity-linked bonus incentive scheme.

In addition, the mine achieved enhanced flexibility through the creation of additional stopable ore reserves and improved geological potholing management, as well as improved support structures on the upper group two (UG2) operations.

“All key operating and financial metrics at Bokoni are moving in the right direction. Our immediate goals remain repositioning the mine towards the lower end of the PGM industry cost curve and generating improved cash flows from our operations, despite what remains a challenging environment for South African PGM producers,” he told Mining Weekly last week.

As part of its 2020 production growth strategy, the junior platinum miner also initiated opencast mining of Bokoni’s Merensky operations during the quarter, with the initial boxcut and associated surface infrastructure completed during the period.

Mining operations are currently in the ramp-up phase with the boxcut extending east to west along strike on the Merensky reef suboutcrop, with steady-state opencast mining operations of 40 000 t/m to be achieved in September.

Bokoni mine’s production mix would remain at a ratio of about 70% Merensky to 30% UG2 reef for the foreseeable future, as UG2 expansion plans remained deferred in the medium term and opencast mining operations were carried out on only the Merensky reef horizon.

“At current spot PGM prices, the Merensky reef revenue basket per PGM ounce yields approximately 13% higher revenue than the UG2 basket price at Bokoni,” Kesler said.

The local PGM basket price achieved for the second quarter was 15.9% higher year-on-year at R11 168/oz, compared with R9 640/oz for the prior comparable period, while the US PGM basket price decreased by 0.9% year-on-year to $1 176/oz.

“The local achieved price was impacted largely by the weakening of the rand by 16.8%, relative to the dollar over the comparative quarterly period,” he noted.

Despite increased production volumes, absolute cash operating costs over the comparative quarter and half-year periods remained relatively flat, notwithstanding yearly wage increases of 8% and power utility increases in excess of 25% over the same period.

Cost containment was partly achieved through employee numbers remaining relatively constant, while contract labour decreased by 12.5% during the period under review.

PGM unit costs – the company’s key operating cost effi- ciency measure – decreased by 9.7% to R9 743/oz over the comparative half-year period.

Meanwhile, Kesler said the company’s revised restructuring plan was currently awaiting several approvals and was expected be concluded by the end of the third quarter.

Atlatsa and mining major Anglo American Platinum (Amplats) in March agreed on a R3.5-billion revised restructuring, recapitalisation and refinancing plan for Atlatsa and the Bokoni group of companies.

The announcement came on the back of a detailed strategic review exposing Atlatsa’s likely inability – as a result of the tenuous current market environment – to repay a R3.5-billion debt to Amplats in the medium term.

In terms of the renegotiated transaction, Amplats would acquire the eastern section of Atlatsa’s Ga-Phasha and Boikgantsho projects for R1.7-billion, the proceeds of which would be used by Atlatsa to reduce the existing debt owing to Amplats.

In addition, Amplats would subscribe for 125-million new common shares in Atlatsa for an aggregate subscription price of R750-million, the proceeds of which would be used by Atlatsa to further reduce the existing debt owing to Amplats.