Aquarius Platinum CEO Jean Nel. Picture: PHILIP SCHEDLER
Aquarius Platinum CEO Jean Nel. Picture: PHILIP SCHEDLER

AQUARIUS Platinum gave Sibanye Gold a look at what it is buying, releasing December quarter production data showing declining costs and a major debt repaid.

Sibanye is buying Aquarius at a time when the dollar prices for platinum group metals (PGM) have fallen to their lowest levels in more than a decade, a factor that affected both major assets in Aquarius negatively.

The average price Aquarius realised during the December quarter for its four metals was $802/oz, a 27% fall compared to $1,097/oz in the same period a year earlier.

Aquarius operates the Kroondal mine in SA in a pool-and-share arrangement with Anglo American Platinum’s Rustenburg mines, which Sibanye is also buying. Aquarius shares the Mimosa mine in Zimbabwe with Impala Platinum and owns the PlatMile tailings treatment project in SA.

"Both Kroondal and Mimosa produced ahead of guidance and at reduced costs during the quarter," said Aquarius CEO Jean Nel.

"The fact that both Kroondal and Mimosa’s PGM unit costs are lower than three years ago despite steep increases in labour, electricity and other costs, is testimony to excellent operational management," he said.

Aquarius reported the Kroondal mine, at which there were extensive changes, had its highest first-half production since 2007. The mine generated 115,839oz of PGMs attributable to Aquarius.

The Mimosa mine’s gross profit margin increased to 7% in the quarter from 4% in the previous quarter. Unit cash costs declined 3%, as the mine introduced a range of cost cuts.

"In response to the sharply lower metal prices, Mimosa implemented a number of significant cost-cutting initiatives during the quarter, which will result in operating costs reducing significantly in the second half," Mr Nel said.

During the December quarter, Aquarius redeemed in full the $125m of its remaining convertible bonds.

By the end last month, Aquarius had $42m in cash and a further $2m due to it from its joint-venture companies.