Aquarius ups Kroondal output for sixth quarter

[miningmx.com] – AQUARIUS Platinum turned in its sixth consecutive quarterly production increase at its Kroondal mine – an operation that survived the portfolio review by 50% joint venture partner Anglo American Platinum (Amplats).

Amplats said earlier this week it planned to exit its Pandora joint venture with Lonmin and may sell its 49% interest in Bokoni Mines, controlled by Atlatsa Resources, but that it had chosen to stay in Kroondal signalling progress made by Jean Nel, CEO of Aquarius Platinum since taking the helm of the company in November 2012.

Nel, who earlier this month presided over a three-year wage agreement at Kroondal without strike action, said the company had produced “a credible” performance for the fourth quarter.

Attributable production from its operations was up 4% quarter-on-quarter to 33,500 ounces of which Kroondal comprised 53,090 oz and Aquarius’ Zimbabwe-based asset, Mimosa, the balance. Attributable production was 1% lower year-on-year.

Fourth quarter cash costs at Kroondal were level but 9% higher year-on-year while there was an increase in costs at Mimosa owing to a one-off retrenchment fee.

Analysts said the results provided further encouragment to shareholders. “A reasonable quarter operationally,” said Investec Securities, adding that Aquarius had probably improved its cash balance although details were not published by the company ahead of its full operating and financial year-end results.

“A decent performance, ahead of guidance,” said Numis Securities. “Operating conditions remain challenging despite some lift in platinum group metal prices. Should get gently better from here but will be remain a hard slog,” it said.

In April, the company announced a rights issue in which it reduced debt owed to bondholder by more than half to $125m. However the company faces some $6.3m in a one-off redundancy charge at Mimosa. “They warn, however, warn that conditions remain challenging as the basket price was flat,” said Roger Bade and analyst for Whitman Howard in London.

Nel said metal inventories held by the major platinum producers had helped mitigate the effects of the five-and-a-half month strike by the Association of Mineworkers & Construction Union that ended in June.

Exchange traded products in platinum and palladium had “taken more metal out of the market. “The recent release of the Palladium ETF has proved to be a catalyst for investment growth during the quarter,” he said.