[miningmx.com] — ANOORAQ Resources’ loss for the nine months to end-September reached C$103.7m (previous comparable period: C$61.2m) despite achieving some operational improvements during the September quarter.
The platinum junior still reported an operating loss of C$14.4m for the September quarter (2010 September quarter: C$16m operating loss) on top of which it incurred net finance expenses of C$19.9m (C$18.6m)
Anooraq remained locked in negotiations with Anglo American Platinum (Amplats) over a restructuring and recapitalisation scheme. These negotiations have been underway since early May.
Anooraq bought its Bokoni (formerly Lebowa Platinum) mine from Amplats through a major BEE transaction but has, so far, failed to deliver on stated production and cost targets for the mine resulting in its precarious financial situation.
The success of that transaction is critical for Amplats in meeting the conditions under which it was granted conversion of its “old order’ mining rights.
Anooraq CEO Harold Motaung made no comment on progress in the restructuring negotiations, which have been the subject of repeated cautionary trading announcements by Anooraq.
Motaung made the optimistic comment that “during the third quarter of 2011 we began to see the results of certain on-mine initiatives which have improved mining fundamentals and established a better foundation for operational improvements at Bokoni”.
The Anooraq share price remains depressed at around 400c, which is close to the 12-month low of 350c and 65% down on the 12-month high of R11.5.
The share price of another Canadian platinum junior – Eastern Platinum (Eastplats) – also remained badly depressed despite reporting a net profit of $1.4m for the September quarter (September quarter 2010 – $4m net profit).
Eastplats is in a far better financial position than Anooraq being fully-funded to pay for its planned expansions.
The company held net cash and short-term investments of $267m as of end-September but the Eastplats’ share price currently sits at 520c. That compares with a 12-month low of 452c and is 61% down on the 12-month high of R13.5.
JP Morgan Cazenove analysts Steve Shepherd and Allan Cooke continued to rate Eastplats as an “overweight’ investment but have sounded a note of caution over recent top management changes.
Eastplats COO Wayne Robinson has resigned and will leave by the end of the year. The company’s Crocodile River Mine has also been without a general manager since the beginning of 2011.
The analysts commented: “Eastplats is currently at an important juncture with two growth projects being developed concurrently while its current operations are struggling to recover from serious labour issues.
“Without experienced and effective senior management, the chances of under-delivery increase substantially.
“The search is on, but quality mining individuals are extremely scarce in the global market right now. In the meantime, highly experienced mining engineer and executive director John Andrews (68) and CEO Ian Rozier are standing in.
“This situation is not sustainable. A key risk to our rating would be Eastplats is unable to find managers within the next three months.”
