Aquarius Platinum’s full year results to 30 June 2013 reflect an exceptionally challenging year for Aquarius.

This is according to Jean Nel, CEO of Aquarius Platinum who said: “This year we had to close loss-making mines, face disruptive industrial action, implement an owner-operator model at Kroondal and revise the hanging wall support regime. “Further, we had to contend with on-going regulatory uncertainty in an environment in which metal prices continued to materially underperform consensus forecast.

“That said, we have learnt much during these difficult times and have emerged as a leaner and more focused business, fully intent on continuing the positive momentum into the new year. As we expect the difficult operating conditions and low metal prices to continue in the new financial year, our focus will remain on improving operational performance and cash generation.”

Financial results: Year to 30 June 2013 

Aquarius consolidated result for the financial year ended 30 June 2013 was a loss of $288 million (61.13 cents per share) after an impairment charge of $226 million. On Mine EBITDA was $70 million, a 145% increase compared to the pcp.

Profitability at mine level (on-mine EBITDA) was $70 million, up 145% compared to $29 million in the pcp.  The financial year’s result was one of two contrasting half years. The first six months saw an EBITDA of $22 million recorded in spite of significant challenges encountered including the closure of Marikana and Everest, the transition to owner operated mining at Kroondal and the implementation of the revised support system. These factors not only required management time but also consumed cash. This resulted in a net operating cash outflow for the half year to December 2012 of $38 million. In contrast, the second half of the financial year was

one of consolidation of the gains achieved in the first half. The second half returned an EBITDA of $48 million, a 125% increase over the first six months due to higher production, lower operating costs and the conclusion of the issues referred to above. Net operating cash for the second six months was a net operating inflow of $60

million, a $98 million turnaround.

Revenue (PGM sales, interest) for the year was $371 million, down 24% from $486 million in the pcp. The decreased revenue was a result of lower production, down 86,295 PGM ounces from the pcp due to the closure of Everest and Marikana. Measured on a PGM ounce basis, revenue decreased to $1,230 per PGM ounce from $1,310 per PGM ounce in the pcp.

Total cash cost of sales was $307 million, down $158 million due to lower production following the closure of high costs mines Everest and Marikana. On a per PGM ounce basis this represented a 19% decrease in Dollar terms (and 15% in rand terms) as a result of the closure of high costs mines, increased efficiencies gained from the successful implementation of the revised support system and the change to owner operated mine at Kroondal.

Group attributable production for the year was 325,103 PGM ounces, 21% lower compared to the pcp due to the closure of Everest and Marikana mines. Significantly, Aquarius continuing mines exceeded last years production. Kroondal recorded a 21% increase, Mimosa recorded a 3% increase and Platmile recorded a 1%

decrease on a 100% basis. These were significant, particularly for Kroondal which was faced with a number of challenging issues and structural changes.

Gross profit increased to $13 million from a gross loss of $45 million in the pcp, a $58 million turnaround due largely to the closure of high cost mines Everest and Marikana and improved operating performances across the group.

Average unit cash costs were significantly lower compared to the pcp due to the closure of high cost mines Everest and Marikana and improved production from on-going mines. In Dollar terms, average unit cash costs were $912 per 4E ounce, down 19% compared to pcp. The average cash cost per PGM ounce at the South

African operations decreased by 15% to R8,242, equivalent to $936 per PGM ounce at the average Rand exchange rate for the year. The decrease in US dollar terms was 25%, as a result of a weaker Rand relative to the Dollar during the year. A 13% increase in PGM production in South Africa from operational mines also contributed to lower unit costs as the ability to spread fix production costs increased. In Zimbabwe the cash cost per PGM ounce was $867, a 13% increase. Increases in cash costs were driven by inflationary factors affecting inputs such as labour, steel, diesel, surface lease fees and certain once-off expenses including an inventory write

off and stockpile build up costs following the May 2012 fire.

 Key Points: Financial    

–      Mine EBITDA increased by 145% to $70 million (FY2012: $29 million)

–      Revenue decreased by 24% to $371 million (FY2012: $486 million)

–      Headline loss (before exceptional charges) of $61 million (FY2012: headline loss $154 million)

–      Reported net loss of $288 million (61.13 cents loss per share) after impairment losses of $226 million

–      Group cash balance at FY close of $103 million

–      No dividend declared

Key Points: Operational

–      Group attributable production, excluding operations on care and maintenance, increased by 13% to 325,103 PGM ounces for the full year

–      US Dollar PGM price weakened by 6%, offset in South Africa by weaker rand-US dollar exchange rate

–      Average Rand Basket Price up 7% year-on-year at just over R10,940 per PGM ounce due to rand weakness.

–      Weighted average on-mine unit cash costs in South Africa decreased by 15% in Rand terms

 Key Points: Strategic

–      Implementation of revised support system at Kroondal completed

–      Move to Owner Operator model at Kroondal completed

–      Focus on turnaround at Kroondal evidenced by improved operating results – Kroondal EBITDA up 12 fold compared to pcp

–      Kroondal mine life increased a further 3.5 years to 9.5 years following agreement with PSA1 partner Amplats.

–      All unprofitable operations have been placed on care and maintenance for the duration of the current downturn

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