LSE-listed South African platinum miner, Aquarius Platinum has released its production results for the second quarter, revealing slightly increased output and operational improvements, while admitting cash pressures.
The company revealed that attributable production from its operating mines had seen a small increase of 2 per cent in Q2 as compared to the previous quarter, resulting in a total output for the period of 78,987 4E ounces.
Of the total attributable output, the Kroondal mine contributed the most, producing 51,262 ounces. The Mimosa operations ranked second, contributing 26,376 ounces to the total, while the Platinum Mile produced only 1,349 ounces.
At Kroondal, total 4E output (not limited to attributable ounces) came to 102,525 PGM ounces exceeding 100,000 ounces for the first time since the December 2010 quarter – demonstrating the improved operational capacity of the mine.
The miner succeeded in achieving a reduction in cash costs at Kroondal, with costs dropping 7 per cent on the previous quarter, levelling out at 8,403 Rand ($930) per platinum group metals (PGM) ounce.
However, cash costs at the Mimosa operations spiked, increasing by 8 per cent as compared the Q1 to 897 Rand ($ 99) per PGM ounce.
The company reported successful migration to owner operator, and revealed that the Mimosa mine has concluded an indigenisation agreement with the government of Zimbabwe, both during the second quarter. However, on-going tensions with the labour force in South Africa were also acknowledged, with Aquarius noting the difficulties posed.
“The quarter under review was yet another challenging quarter during which industrial relations in South Africa remained strained and metal prices remained low,” Jean Nel, Chief Executive Officer of Aquarius commented.
“Fact remains that despite the significant operational improvements, cash generation at current spot prices remains constrained. It is against this backdrop that management continues to focus on cash preservation and operational stability and improvements. The Company is also focused on playing a positive role in terms of improving relations with the South African and Zimbabwean regulators. Ensuring all stakeholders appreciate what is required for a sustainable industry in future is critical and work in this regard continues,” Nel added.
