[miningmx.com] — ANOORAQ Resources on Monday officially changed its name to Atlatsa Resources Corporation, but the challenges facing the stricken platinum producer remained as real as ever.
Reporting results for the quarter to end-March, Atlatsa showed why its R5bn proposed recapitalisation and refinancing plan – expected to be finalised in June – cannot come soon enough.
The operating loss margin of 16% during the whole of 2011 has increased to 29% at the group’s Bokoni Mines during the quarter, resulting in an operating loss of C$9.8m on the back of revenues of C$34.1m.
In addition, the company incurred finance charges to the tune of $22.8m on its R3bn worth of debt, of which $11.5m was attributable to Atlatsa’s shareholders.
The total quarterly loss for the company’s account amounted to C$21.5m, 16% worse than the comparable figure in 2011.
Positive points were increases in ore development (11%), grade (5%) and concentrator recoveries (88.5% for Merensky; 83.7% for UG2) as well as tonnes milled (10%). PGM ounces produced were up 24% to 27,799oz.
However, cash operating costs were up 21%, which the company attributed to above-inflation increases in labour costs, stores fees and power charges.
Unit costs increased 6% to R12,442/oz, highlighting the need to improve efficiencies and volumes at a mine which was scaled to produce at much higher levels.
The future of Atlatsa, post the recapitalisation and refinancing transaction with Anglo American Platinum, would turn on the accelerated development of Bokoni’s ramp-up projects – the Brakfontein decline and Middelpunt Hill.
Under the transaction the company would spend some R2.6bn, financed by Amplats, to add 100,000 oz of PGMs to Bokoni’s production profile by 2016, previously deferred until after 2020.
In a related series of transactions, including the transfer of exploration properties to Amplats, Atlatsa would see its debt cut to R1bn, with Amplats sharing half of the R2.6bn earmarked capex. The other half would be offered at a reduced interest rate.
Amplats also agreed to an interest standstill with respect to the existing debt for the ten months between July 1 2011 and April 30 2012, resulting in an interest saving of R572m.
