TORONTO (miningweekly.com) – Triple-listed platinum group metals (PGMs) miner Atlatsa Resources has narrowed its 2013 first-quarter net loss to C$4.6-million, an 88.8% improvement on the C$41.27-million loss recorded in the first quarter of 2012.
This was mainly as a result of improved grades, production and an improved basket price for its PGMs products.
Atlatsa was negatively impacted on by an unprotected strike at its Bokoni mine, on the north-eastern limb of South Africa’s Bushveld Complex, in October last year, which resulted in almost no production at the operation during the fourth quarter of the year.
Atlatsa on Tuesday reported a 32.3% increase in revenue to C$45.08-million, compared with C$34.07-million a year earlier.
The Bokoni mine produced 36 043 platinum, palladium, rhodium and gold (4E) ounces in the quarter ended March 31, a 29.7% increase on the 27 779 oz of 4E produced during the same period a year earlier. The increase in production was mainly owing to a quicker mine start-up after the Christmas break, as well as production normalising sooner.
"The company has achieved significant improvements in its operating performance and increased production volumes despite this being a traditionally challenging quarter. Most importantly, the new management continues to demonstrate a positive upward trend in operating performance, with all key operating metrics showing significant year-on-year improvements," CEO Harold Motaung commented in a statement to shareholders.
A 16.9% year-on-year improvement in the rand-value of the 4E basket price for the first quarter to R11 562/oz of 4E also boosted Atlatsa’s performance, despite the 4E basket price in US dollar terms being only 1.4% higher year-on-year at $1 291/oz of 4E.
The TSX-, NYSE- and JSE-listed Atlatsa reported an operating profit of C$8.3-million for the quarter, compared with an operating loss of C$23.4-million. This is mainly owing to the fair value adjustment made on its consolidated 2009 senior debt facility and the resulting fair value gain of C$20.6-million from the implementation of Phase 1 of the revised restructure plan, which took place on September 28, 2012. This had a positive impact on the company’s earnings for the period.
Atlatsa and mining major Anglo American Platinum (Amplats) in March concluded a R3.5-billion revised restructuring, recapitalisation and refinancing plan for Atlatsa and the Bokoni group of companies.
This came after a strategic review suggested that Atlatsa was likely to be unable to repay a R3.3-billion debt to Amplats in the medium term.
Atlatsa said despite the increased production volumes, cash operating costs for the quarter, measured in Canadian dollar terms, remained relatively flat year-on-year, increasing by C$500 000 to C$44.4-million.
The rand-based production cost per PGM ounce decreased by 13.3% year-on-year from R12 442 to R10 786, and the dollar-based production cost per PGM ounce declined by 26.4% year-on-year from $1 622 to $1 194.
Absolute and unit cost cost-cutting initiatives remained a critical focus at the operations, with further reductions in unit costs expected from the second quarter, as a result of efficiency improvements, as well as owing to the company starting its Merensky openpit mining operations.
Further, Atlatsa said Bokoni mine management had started preliminary engagements with its recognised unions regarding wage negotiations, due to start in June. The current two-year wage agreement at Bokoni mine terminates in July.
Forthcoming wage talks in South Africa's mining sector were expected to be among the toughest ever, given inflation, rising worker militancy, shrinking company margins and falling commodity prices.
On Tuesday morning, Atlatsa's shares listed on the TSX-V traded 2.7% lower at C$0.18 apiece.