Losses reduced at Aquarius Platinum

Losses were sharply reduced in the first quarter of Aquarius Platinum's financial year, despite the company taking a one-off hit relating to the mothballing of two of its mines.

Revenue in the three months to the end of September tumbled to $87.4m from $144.6m in the corresponding quarter of 2011.

After swallowing $14.62m in closure and transition costs, loss before income tax was $24.88m, versus a loss of $108.79m the year before.

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Following the closure of non-profitable mines, all operations are now returning positive underlying earnings. The group said its operating mines reported earnings before interest, tax, depreciation and amortisation (EBITDA) in the quarter of $7.6m.

"It is gratifying that all operating entities are now EBITDA positive and in line with our philosophy of not funding unproductive operations, the decision was taken to place CTRP on care and maintenance in the current economic

environment," said Jean Nel, interim Chief Operating Officer of Aquarius Platinum.

Loss per share narrowed to 4.17 cents from 19.60 cents a year earlier.

Attributable production from operating mines increased by 8% quarter-on-quarter

to 77,799 4E ounces despite industrial unrest; "4E" refers to the combined content of the metals platinum, palladium, rhodium and gold.

The average basket price for platinum group metals (PGMs) in the quarter was down 4% from the previous quarter, but strengthened towards the end of the quarter. Over the same period, the South African rand was 3% weaker on average against the US dollar.

The group is making progress on a switch to an owner-mining model, which should coincide with the completion of the roll-out of the roll-out of the new hanging wall - the mass of rock overlying a mineral deposit in a mine - support system. The new support system should enable a return to a full daily mining cycle, after which Aquarius will look at ways of boosting production at its Kroondal operation.

"In terms of future guidance, we have made some tough decisions in recent months and will soon have completed all the improvement initiatives currently under way. This should stand us in good stead and leave us well placed and poised to respond to positive shifts in the sector," Nel asserted.

JH