[miningmx.com] — ANOORAQ Resources (Anooraq) carried on downhill during the June quarter highlighting the need for a swift outcome to the restructuring and refinancing negotiations currently underway with Anglo American Platinum (Amplats).
Anooraq made an operating loss of C$30.4m for the June quarter (2010 June quarter – C$6.2 operating loss) and reported a loss before tax of C$53.6m (C$23.3m loss).
According to CEO Harold Motaung, “the increased operating loss is the result of lower production and escalating production costs at the Bokoni (formerly Lebowa Platinum) mine and the increased loss before tax is a result of higher administrative and finance cost.’
Production of four element platinum group metals (pgm) dropped 5% to 28,310oz (29,926oz) for the quarter reflecting a 6% fall in tonnage milled which more than offset a 6% improvement in head grade.
Bokoni’s operating costs surged 30% to R1,226/t milled (R942/t).
Motaung said various contractors had been taken on from January this year “in order to accelerate certain development initiatives, particularly re- and sub-development, identified as essential to meet short-to-medium term project ramp up and mining flexibility targets.
“This has resulted in a significant increase in contractor costs during the period under review coupled with a significant increase in own employee overtime charges at the operations. “
Anooraq’s long term debt is now held by Amplats which has been in negotiations over restructuring with Anooraq since the end of April.
Anooraq in its current form was set up by Amplats as part of the group’s black economic empowerment initiatives in order to win conversion of its old order mining rights into new order mining rights.
Conventional investor wisdom is that Amplats cannot allow Anooraq to fail because of the company’s importance to its BEE strategy. That means the outcome of whatever is being negotiated should be favourable for the Anooraq share price.
Despite this the Anooraq share price has collapsed on the JSE from a 12-month high of R11.50 to a low of R3.50 before recovering to current levels around R4.50.
That is still 25% down on the R6 at which the shares stood in mid-May when news of the negotiations was made public.
