AQUARIUS Platinum, which on Wednesday reported weak results for the year to June that further battered its share price, has "hunkered down" to weather the weak platinum market and is pushing to run its own mine rather than rely on a contractor and the fraught labour relations this entails.
Shares in Aquarius fell as much as 10% on Wednesday to an intraday low of R4.30 after it reported dismal results for the year, which saw revenue dropping by nearly a third to $486m and cash holdings shrinking to a level that is forcing the company to look at financing options to conclude a transaction to buy unmined resources from Northam Platinum.
The shares closed 2.92% down at R4.65.
"Given the well-documented trials and tribulations which Aquarius experienced during financial year 2012, the reported result makes for predictably depressing reading," Justin Froneman, of SBG Securities, said.
Aquarius has recently shut two of its mines, citing the market, operating environment and labour issues. It has two mines still in operation, Kroondal, which it shares with Anglo American Platinum in SA, and Mimosa in Zimbabwe.
Mined production for Aquarius’s account fell 14% to 411,398oz of platinum group metals (PGM). The average rand price for the basket of metals it produces stayed flat in the period, but costs had risen 39% in that time.
It forecast production for next year of 325,000oz, of which 210,000oz will come from Kroondal and 105,000oz from Mimosa. Its tailings operations will supply the rest.
"We’ve had a fairly torrid year," Aquarius CEO Stuart Murray said. "The business is hunkered down. We think we are going to see another six months or maybe nine months of sub-R10,000/oz of PGM pricing."
He lashed out at the Association of Mineworkers and Construction Union’s (Amcu’s) behaviour, which he largely blamed for the suspension of Everest.
"The ground condition issues and the problems we encountered with Amcu, and the way the trade union behaved, did finally result in a decision to close the mine. We will address Everest … when prices improve."
A major development in Aquarius is the move away from using contractors to mine its assets. At Kroondal, it is 11 weeks into a 40-week programme to take over the mining itself. It will cost R190m to convert Kroondal to owner-mining, of which Aquarius pays for half. The suspension cost at Marikana is $1m and care and maintenance costs will amount to $5m. Everest will cost about $15m to suspend, and care and maintenance will be $10m.
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