[miningmx.com] — AQUARIUS Platinum has announced several changes
to its business plan as it tries to weather poor trading conditions, including a
decision to get rid of Murray & Roberts as contract miner.
It has also asked other industry players to follow its example and cut unneeded
production.
Having shut down its Marikana and Everest mines in recent weeks, Aquarius said its
2013 budget would be focused on cash conservation and the preservation of the
company’s reserves and resources until economic circumstances merit their
extraction.
“As a result, several material alterations have been made to the operating
configuration of the company to better enable it to endure the current economic
environment,’ read a company statement.
While some of the changes, including the closure of Marikana and Everest, have
previously been announced, others were set out for the first time. Among those,
Aquarius said it would follow an owner-operator model in future. The company would
further chase output at Kroondal, Mimosa and the tailings operations to extract as
much as possible cash flow from those. Also, all non-essential capital expenditure
would be suspended.
Commenting on the outlook for platinum prices, Aquarius remained negative.
“Material surpluses of PGMs, and of platinum in particular, are likely to persist in the
short to medium term. As a result PGM prices in both rand and US dollar terms are
likely to remain stagnant, while operating costs are expected to continue to rise at
historical rates,’ the group said.
“The board believes that in this environment, the only defensible strategy is to cut
all non-essential capital expenditure and place all non-contributing assets on care
and maintenance, while optimising profitable operations for maximum contribution
in the current low-price environment. This includes taking back control of operating
costs.’
Aquarius said it would start mining its own mines from September 21.
“The transition to owner-operated mining is expected to incur once-off costs of
approximately R190m, relating principally to the purchase of mining equipment and
stores inventory,’ the group said.
Its production guidance for 2013 is 327,500 equivalent ounces, down from 2012’s
412,594 oz.
“The board and management of Aquarius are acutely aware of the difficulties facing
the industry at present, and are monitoring the business and financial health of the
company as closely as we have always done,’ said CEO Stuart Murray. “I also note
that we seem to be one of the few companies in the platinum industry that is willing
pro-actively to take the required tough decisions to close the mines that need to be
placed on care and maintenance.
“I would hope that the other industry players follow suit and cut the unneeded
production that is depressing the industry.’
