[miningmx.com] –THE basket price received by Aquarius Platinum (Aquarius) rose 16% in both dollar and rand terms in the March quarter, bolstering revenues despite an 8% drop in production.
Aquarius produced an attributable 103,286 ounces of platinum group metals (PGMs) in the March quarter (December quarter – 112,359 oz) which compares with 97,212 oz for the 2009 March quarter.
The two March quarters are not directly comparable because the Blue Ridge mine – which Aquarius acquired when it took over Ridge Mining last year – contributed 7,669 oz to the March quarter production of 2010.
Aquarius CEO Stuart Murray said: “Production levels were down on the previous quarter, as is typical for most companies with mining operations in South Africa in the first calendar quarter of the year.
“The traditional effect of the Christmas and New Year holiday period resulted in fewer shifts in the quarter under review at all operations, and the commensurately lower production was exacerbated to some degree by teething problems at Blue Ridge and reduced availability of feed material at our tailings retreatment operations.
“Both of these issues are being addressed.’
The problems at Blue Ridge included the loss of six production days when the Department of Mineral Resources issued a Section 54 notice “following a systems audit’.
Murray also highlighted “excessively high absenteeism among drill rig operators and rock drill operators’ at Blue Ridge in the general “slow return of mine workers following the Christmas and New Year holiday break’.
The basket price – which accounts for all the revenues earned from PGM and base metals produced by a platinum mine divided by actual PGM production – averaged R9,981/oz (December quarter – R8,604/oz) for Aquarius’ South African operations.
The price varies from mine to mine depending on the mix of PGM and base metals in the ore. In dollar terms the $1,328/oz earned by the flagship Kroondal mine compared with $1,163/oz for the December quarter and $915/oz for the June quarter.
Aquarius earned revenues of $116.5m for the March quarter ($106.9m) and made a net profit after tax of $23.2m ($5.7m loss).
The net profit after tax for the nine months to end-March was $27.1m, which compares with a loss of $45.7m for the financial year to end-June 2009.
Murray said: “The continuing slow recovery in the developed world automotive industry is expected to continue, underpinning PGM prices in the final quarter of the financial year, a period which is likely to see operational and production metrics in line with the second quarter.’
He added mining had restarted at the group’s Everest Mine following completion of the two new decline shafts, and ore was being stockpiled ahead of the start-up of the concentration plant.
So far R109m of the estimated total re-establishment cost of R259m had been spent.
The sting in the tail for the results was the news that Hugo Holl had resigned as MD of Aquarius Platinum South Africa – the wholly-owned subsidiary which runs the South African mines.
According to the Aquarius statement, Holl “has decided to leave for personal reasons and the company wishes to thank him for his significant contribution to the Aquarius group over the past eight years and wish him well in his future endeavours’.
Holl will stay in the job until end-June to allow “an orderly handover of his responsibilities’.
The writer owns shares in Aquarius Platinum.