[miningmx] — PLATINUM producer Atlatsa Resources, formerly known as Anooraq,
has said it was delivering on the operational side of its turnaround strategy even
though a delay in the restructuring of its balance sheet meant the group continued
to suffer significant losses.
Reporting quarterly results to end-June on Tuesday, Atlatsa said the ramp-up of its
Bokoni mine has made sound progress, recording quarter-on-quarter increases of
6% in primary development, 28% in square metres broken, 19% in tonnes milled
and 23% (to 34,098 ounces) in platinum group metals production.
As a result of the increase in production, unit costs reduced by 17% (to R10,285 per
PGM ounce), while its operating loss more than halved by 52% to C$4.7m. This
translated into a negative operating margin of 12%, a significant improvement from
the first quarter’s 29%. However, the interest charge on the company’s debt of
$413m amounted to $12.4m, causing the company’s quarterly loss to plummet to
$21.1m.
Joel Kesler, Atlatsa’s executive for corporate development, told Miningmx
the company was close to break-even on an operating level, despite the fact that an
interest charge would continue to drag the group into negative territory for as long
as the previously announced restructuring strategy remained unimplemented.
He said Bokoni’s ramp-up projections were based on a basket price of R9,200 per
PGM ounce. Still, Atlatsa was considering the development of low-cost surface
ounces to carry it through the ongoing slump in the platinum market. “This is a little
bit of a change of plan to carry us through the next 24 to 36 months where we
expect the market to be constrained,’ he said.
Atlatsa’s 80% shareholder, Anglo American Platinum (Amplats) said in February it
would refinance the company with a radical R5bn plan that would also see it
accelerate a 100,000 oz/year production expansion at Bokoni by 2016.
According to the outline of the deal, Atlatsa would spend some R2.6bn, financed by
Amplats, to expand production. In a related series of transactions, including the
transfer of exploration properties to Amplats, Atlatsa would see its debt cut to R1bn,
with Amplats sharing half of the R2.6bn earmarked capex. The other half would be
offered at a reduced interest rate.
According to Kesler, the restructuring would result in the company reducing its
interest coupon in the first year of the transaction from 16% to 0.5%.
The implementation of the deal is pending on Amplats’ own review of its operations.
