Annual results

For the financial year
ended 30 June 2013
Jean Nel
August 2013
Disclaimer
Certain forward-looking statements may be contained in the presentation which include, without limitation,
expe...
FY2013 – We begin....
Aquarius has clawed its way through a tumultuous year and delivered:


Restored operational credibi...
FY2013 – financial highlights
 Revenue decreased by 24% to $371 million (FY2012: $486 million)
 Mine EBITDA increased by...
Price volatility remains high, prices do not
Pd ($/oz)

Pt, Ru & Au ($/oz)

800

1,900
1,800

750
1,700
700

1,600
1,500

...
SA & ZIMBABWE Basket prices
Challenging Dollar prices....partially offset by Rand weakness
$/oz

R/oz

1,450

13,000

1,40...
Price forecast…have we all gotten it wrong?
Kroondal Basket Price Comparison - $/4E ounce

$/4E Ounce
1,450
1,400
1,350
1,...
US Dollar basket prices
Sustained low Dollar prices
SOUTH AFRICA

Pd 29%
Pt
59% Rh 11%
Au 1%

ZIMBABWE

Pd 39%
Pt
50% Rh 4...
FY2013 – operational highlights
 Group attributable production, excluding operations on care and maintenance, increased b...
Annual production by operation
Attributable PGM (4E) (000ozs)
-1%

13

PlatMile
13

+3%

109

Mimosa
105

+21%

203

Kroon...
Kroondal
(P&SA1 - AQP 50%)
4E oz

R/4E oz
14,000

120,000

12,000

100,000

10,000
80,000
8,000
60,000
6,000
40,000
4,000
...
Kroondal
18-month quarterly production comparison
Tons processed

Head grade

1,900

2.55

1,800
2.50

1,700
1,600

2.45

...
Kroondal
Reconciliation of cash costs per 4E ounce FY2013

Rand/PGM ounce
1HY 2013

2HY 2013

10,633

9,133

9,851

(1,143...
Mimosa
(AQP 50%)
$/4E oz

4E oz

1,600

58,000

1,400

56,000

1,200
54,000

1,000

52,000

800
600

50,000

400
48,000

2...
Mimosa
Reconciliation of cash costs per 4E ounce FY2013
US$ / PGM ounce
1HY 2013

2HY 2013

FY2013

1,030

1,000

1,015

O...
Platinum Mile
 Production of 12,596 PGM ounces
 Operations impacted by strikes at
Anglo Platinum during the year

Basket...
Contribution
By operation

CTRP, ($0.2M)

PMR, $3.9M
4E oz

Mimosa, $36.8M

Ridge, ($1.5M)

Mine EBITDA

FY2013 Attributab...
P&L analysis and breakdown
($m)

30 June 2013

Mine EBITDA

30 June 2012

Change

70

29

41

371

486

(115)

(358)

(531...
P&L analysis and breakdown
Impairment of mining assets
($m)

30 June 2013

Mining rights

(84)

Everest

(86)

Marikana

(...
P&L analysis and breakdown
Closure, transition & rehabilitation costs
($m)

30 June 2013

Closure costs Everest & Marikana...
Balance sheet analysis and breakdown
($m)

30 June 2013

30 June 2012

Change

Total non-current assets

562

890

(328)

...
Cash flow statement analysis and breakdown
Half year
ended

Half year
ended

Year
ended

Year
ended

31 Dec 2012

30 June ...
Summary – what have we delivered on….
1

Migration from MRC completed



On time and on budget

2

Implemented revised su...
The way forward … medium-term aims
 Strengthen balance sheet, Convertible bonds due by December 2015
 Expand retreatment...
Guidance – FY2014
On 100% basis

Kroondal

Mimosa

PlatMile

Stay-in-business capex *

R330M

$31M

R10M

K6 capital expen...
Annual results FY2013

www.aquariusplatinum.com

26
Contribution to revenue
All products
MIMOSA

4E, 94.2%

4E
77.27%

Base Metals - Ni,
Cu, 2%

Ir+Ru, 4%

Base Metals - Ni,
...
P&L analysis and breakdown
Revenue
($m)

30 June 2013 30 June 2012

Change

Revenue from concentrate sales (current period...
P&L analysis and breakdown
Cost of sales
($m)

30 June 2013 30 June 2012

Change

Cost of production

296

457

(161)

Amo...
P&L analysis and breakdown
Financing costs
($m)

30 June 2013

30 June 2012

Change

Interest paid on borrowings
(converti...
P&L analysis and breakdown
Foreign exchange
($m)

30 June 2013

30 June 2012

Change

(15)

(26)

11

FX loss on currency ...
P&L analysis and breakdown
Income tax expense
($m)

30 June 2013

30 June 2012

Change

Zimbabwe Corporate tax

(8)

(14)
...
Aquarius Platinum Limited FY 2013 results
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Aquarius Platinum Limited FY 2013 results

  1. 1. Annual results For the financial year ended 30 June 2013 Jean Nel August 2013
  2. 2. Disclaimer Certain forward-looking statements may be contained in the presentation which include, without limitation, expectations regarding metal prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects as well as the financial position of the company. Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forwardlooking statements as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks. No representation or warranty, express or implied, is made by Aquarius that the material contained in this presentation will be achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of Aquarius, its officers, employees and advisers expressly disclaims any responsibility for the accuracy or completeness of the material contained in this presentation and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error or omission there from. Aquarius accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this presentation or any other information made available to a person nor any obligation to furnish the person with any further information. Annual results FY2013 www.aquariusplatinum.com 2
  3. 3. FY2013 – We begin.... Aquarius has clawed its way through a tumultuous year and delivered:  Restored operational credibility +13% production from continuing mines    Reduced cash burn by closing high cost mines Rebuilt ore stockpiles at Kroondal and Mimosa Delivered three consecutive 100,000 plus pgm oz quarters at Kroondal    Reduced operating costs Improved labour relations Increased EBITDA by 145% from pcp Has operating mines at the lower end of the cost curve   Increased cash balances in second half of FY2013 Annual results FY2013 www.aquariusplatinum.com 3
  4. 4. FY2013 – financial highlights  Revenue decreased by 24% to $371 million (FY2012: $486 million)  Mine EBITDA increased by 145% to $70 million (FY2012: $29 million)  Headline loss (before exceptional charges) of $61 million (13.05 cents per share)  Impairment charges of $226 million arising from a review of the carrying value of the Group’s mining assets.  Reported net loss of $288 million (US 61.13 cents per share)  Group cash balance at 30 June 2013: $103 million Annual results FY2013 www.aquariusplatinum.com 4
  5. 5. Price volatility remains high, prices do not Pd ($/oz) Pt, Ru & Au ($/oz) 800 1,900 1,800 750 1,700 700 1,600 1,500 650 1,400 600 1,300 1,200 550 1,100 1,000 Jul-12 500 Oct-12 Jan-13 Platinum Rhodium Annual results FY2013 Apr-13 Gold Jul-13 Palladium www.aquariusplatinum.com 5
  6. 6. SA & ZIMBABWE Basket prices Challenging Dollar prices....partially offset by Rand weakness $/oz R/oz 1,450 13,000 1,400 12,500 12,000 1,350 11,500 1,300 11,000 1,250 10,500 1,200 10,000 1,150 9,500 1,100 9,000 1,050 8,500 1,000 Jul-12 8,000 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 SA $ Basket Zim $ Basket Annual results FY2013 Jul-13 SA R Basket www.aquariusplatinum.com 6
  7. 7. Price forecast…have we all gotten it wrong? Kroondal Basket Price Comparison - $/4E ounce $/4E Ounce 1,450 1,400 1,350 1,300 1,250 1,200 1,150 1,100 Actual - $/4E ounce AQP - BP14 Annual results FY2013 Jun-14 May-14 Apr-14 Mar-14 Feb-14 Jan-14 Dec-13 Nov-13 Oct-13 Sep-13 Aug-13 Jul-13 Jun-13 May-13 Apr-13 Mar-13 Feb-13 Jan-13 Dec-12 Nov-12 Oct-12 Sep-12 Aug-12 Jul-12 Jun-12 May-12 Apr-12 Mar-12 Feb-12 1,000 Jan-12 1,050 Combined Broker Consensus www.aquariusplatinum.com 7
  8. 8. US Dollar basket prices Sustained low Dollar prices SOUTH AFRICA Pd 29% Pt 59% Rh 11% Au 1% ZIMBABWE Pd 39% Pt 50% Rh 4% Au 7% FY2013 $1,243 per PGM 4E/oz FY2012 $1,322 per PGM 4E/oz Ir/Ru Ni/Cu FY2013 $1,206 per PGM 4E/oz FY2012 $1,277 per PGM 4E/oz Ir/Ru 6.0% Ni/Cu/Co Cr2O3 5.6%  Growth in primary supply of PGMs diminished in current environment  Looking for direction in autocat, jewellery and industrial demand  Low price basket remains a challenge for miners in SA and Zimbabwe Annual results FY2013 www.aquariusplatinum.com 8
  9. 9. FY2013 – operational highlights  Group attributable production, excluding operations on care and maintenance, increased by 13% to 325,103 PGM ounces  Weighted average on-mine unit cash costs in South Africa decreased by 15% in Rand terms  Implementation of revised support regime completed on time and on budget  Move to Owner Operator model completed on time and on budget  Focus on turnaround at Kroondal evidenced by improved operating results - Kroondal EBITDA up 12 fold compared to pcp  Kroondal mine life increased a further 3.5 years to 9.5 years following agreement with PSA1 partner Anglo Platinum.  Mimosa and Plat Mile continues to produce consistently Annual results FY2013 www.aquariusplatinum.com 9
  10. 10. Annual production by operation Attributable PGM (4E) (000ozs) -1% 13 PlatMile 13 +3% 109 Mimosa 105 +21% 203 Kroondal 167 0 50 100 2013 Annual results FY2013 150 200 2012 www.aquariusplatinum.com 10
  11. 11. Kroondal (P&SA1 - AQP 50%) 4E oz R/4E oz 14,000 120,000 12,000 100,000 10,000 80,000 8,000 60,000 6,000 40,000 4,000 20,000 2,000 - Q1 '12 Q2 '12 Q3 '12 Q4 '12 Production Q1 '13 Cash Cost Q2 '13 Q3 '13 Q4 '13 Price  Three consecutive quarters of +100,000 PGM ounces  Unit costs trending down on increased production and efficiencies  Step change improvements behind us, looking for incremental improvements going forward Annual results FY2013 www.aquariusplatinum.com 11
  12. 12. Kroondal 18-month quarterly production comparison Tons processed Head grade 1,900 2.55 1,800 2.50 1,700 1,600 2.45 1,500 2.40 1,400 1,300 2.35 1,200 2.30 1,100 1,000 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 2.25 Q1 '12 Recoveries Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 PGM ounces 81% 110,000 80% 105,000 80% 100,000 79% 95,000 79% 90,000 78% 85,000 78% 77% 80,000 77% 75,000 76% 70,000 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Annual results FY2013 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 www.aquariusplatinum.com 12
  13. 13. Kroondal Reconciliation of cash costs per 4E ounce FY2013 Rand/PGM ounce 1HY 2013 2HY 2013 10,633 9,133 9,851 (1,143) (698) (911) Project capital expenditure (K6) (509) (347) (425) Transition costs completed (294) (62) (173) On-mine cash costs 8,688 8,027 8,343 Total operating expenditure FY2013 Less: Ongoing capital expenditure and mobile plant Annual results FY2013 www.aquariusplatinum.com 13
  14. 14. Mimosa (AQP 50%) $/4E oz 4E oz 1,600 58,000 1,400 56,000 1,200 54,000 1,000 52,000 800 600 50,000 400 48,000 200 46,000 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Production Q1 '13 Cash Cost Q2 '13 Q3 '13 Q4 '13 Price  Record production performance again – mine continues to operate above design capacity  Sovereign and regulatory issues remain key  Cash costs escalation experienced in 1HY partially reversed, unit cash costs expected to improve Annual results FY2013 www.aquariusplatinum.com 14
  15. 15. Mimosa Reconciliation of cash costs per 4E ounce FY2013 US$ / PGM ounce 1HY 2013 2HY 2013 FY2013 1,030 1,000 1,015 Ongoing capital expenditure and mobile plant (166) (130) (148) Off-mine costs (219) (208) (213) 645 662 Total operating expenditure Less: On-mine cash costs Annual results FY2013 654 www.aquariusplatinum.com 15
  16. 16. Platinum Mile  Production of 12,596 PGM ounces  Operations impacted by strikes at Anglo Platinum during the year Basket Price (US$)  Cash costs increased by 2% to R6,606 per PGM ounce. 1,600 1,267 million  Impairment of $12 million following a 770 800 400 Cash Costs (ZAR) 1,182 1,200  Revenue increased by 18% to R118 Cash Costs (US$) 6,305 733 6,962 0 review of the carrying value of the H1 2013 H2 2013 asset  Cash margin for the year was 25%, up from 13% in 2012 16 Annual results FY2013 www.aquariusplatinum.com
  17. 17. Contribution By operation CTRP, ($0.2M) PMR, $3.9M 4E oz Mimosa, $36.8M Ridge, ($1.5M) Mine EBITDA FY2013 Attributable Production: 325,103 PGM oz 250,000 200,000 150,000 100,000 Everest South, ($2.5M) Kroondal, $35.8M Marikana, ($1.9M) 50,000 0 Kroondal Mimosa Tailings  Mine EBITDA = Revenue – interest income included in revenue – cash costs + FX gain/(loss) on sales Annual results FY2013 www.aquariusplatinum.com 17
  18. 18. P&L analysis and breakdown ($m) 30 June 2013 Mine EBITDA 30 June 2012 Change 70 29 41 371 486 (115) (358) (531) 173 Administrative costs (13) (12) (1) Financing costs (31) (35) 4 Foreign exchange loss (19) (95) 76 (226) (4) (222) (55) - (55) Other (1) 2 (3) Income tax credit/(expense) 44 31 13 (288) (158) (130) (61) (154) 93 Revenue Cost of sales Impairment of mining assets Closure, transition and rehabilitation costs Net loss after tax Headline earnings/(loss) Annual results FY2013 www.aquariusplatinum.com 18
  19. 19. P&L analysis and breakdown Impairment of mining assets ($m) 30 June 2013 Mining rights (84) Everest (86) Marikana (19) Platmile (12) Blue Ridge (13) Other (12) Total (226) Annual results FY2013 www.aquariusplatinum.com 19
  20. 20. P&L analysis and breakdown Closure, transition & rehabilitation costs ($m) 30 June 2013 Closure costs Everest & Marikana (14) Transition to owner operator – Kroondal (4) Rehabilitation provision Marikana open pit (37) Total (55) Annual results FY2013 www.aquariusplatinum.com 20
  21. 21. Balance sheet analysis and breakdown ($m) 30 June 2013 30 June 2012 Change Total non-current assets 562 890 (328) Total current assets 203 311 (108) Total assets 765 1,201 (436) Total non-current liabilities 391 411 (20) 78 114 (36) Total liabilities 469 525 (56) Net assets 296 677 (381) Shareholders equity 296 677 (381) Total current liabilities Mining assets and property, plant & equipment – decrease due to impairment of Mining rights, Everest, Marikana, Blue Ridge and Plat Mile Cash & cash equivalents – due to decrease in cash balance and lower receivables with Marikana and Everest placed on care and maintenance Annual results FY2013 Non-current liabilities – $60 million decrease in deferred tax liability offset by $34 million increase in mine closure rehabilitation provision Current liabilities– decrease due to lower trade payables at Marikana and Everest following the mines being placed on care and maintenance www.aquariusplatinum.com 21
  22. 22. Cash flow statement analysis and breakdown Half year ended Half year ended Year ended Year ended 31 Dec 2012 30 June 2013 30 June 2013 30 June 2012 Change Net operating cash flow (38) 60 22 22 - Net investing cash flow (27) (12) (39) (120) 81 Net financing cash flow (36) (12) (48) (30) (18) Net increase/(decrease) in cash held (101) 37 (65) (128) 63 ($m) Net operating cash flow includes: • Net inflow from operations of $51m • Closure and transition costs of $28m • Interest received of $6m • Income tax paid of $8m Net investing cash flow includes: •Payments for mine development and property, plant and equipment of $54m • Refund of deposit paid on Booysendal $15m Annual results FY2013 Net financing cash flow includes: • Interest paid $14m • Foreign exchange loss on currency contract $24m • Repayment of borrowings $10m www.aquariusplatinum.com 22
  23. 23. Summary – what have we delivered on…. 1 Migration from MRC completed  On time and on budget 2 Implemented revised support regime at Kroondal  On time and on budget 3 Kroondal production increased by 21%  Now producing at full capacity 4 Mimosa producing at steady state and cost issues addressed  Costs reduced, production maintained 5 Mines placed on care and maintenance  Below budget, without disruption 6 Material safety improvements  At both Kroondal and Mimosa 7 Kroondal mine life extended  On fair terms 8 Wage agreements concluded at Kroondal  Without interruption and on reasonable terms 9 Management remuneration aligned with KPIs  At both Kroondal, Mimosa and Plat Mile 10 Improvement initiatives implemented at both mines  Included in KPIs 11 AQP management team streamlined  Core team now established and delivering 12 Corporate costs reduced by more than 30% from BP2014  Further work will be done Annual results FY2013 www.aquariusplatinum.com 23
  24. 24. The way forward … medium-term aims  Strengthen balance sheet, Convertible bonds due by December 2015  Expand retreatment options – high-margin, low-risk, relatively low-capital businesses  Continue to walk the indigenisation road in Zimbabwe  Configure the most appropriate business case for Everest  Focus remains on: • Improving operational performance but step changes are behind us • Cash preservation remains paramount The operating environment remains particularly challenging across all disciplines, with little sign of improvement in sight. We will continue to focus on those parameters we can control! Annual results FY2013 www.aquariusplatinum.com 24
  25. 25. Guidance – FY2014 On 100% basis Kroondal Mimosa PlatMile Stay-in-business capex * R330M $31M R10M K6 capital expenditure R88M - - Production (4E) 410k – 420k 215k – 220k 15k – 18k Corporate costs $7.5M for the AQP Group * excluding mining equipment purchases Annual results FY2013 www.aquariusplatinum.com 25
  26. 26. Annual results FY2013 www.aquariusplatinum.com 26
  27. 27. Contribution to revenue All products MIMOSA 4E, 94.2% 4E 77.27% Base Metals - Ni, Cu, 2% Ir+Ru, 4% Base Metals - Ni, Cu 21.27% Annual results FY2013 Ir+Ru 1.46% www.aquariusplatinum.com 27
  28. 28. P&L analysis and breakdown Revenue ($m) 30 June 2013 30 June 2012 Change Revenue from concentrate sales (current period) 376 508 (132) PGM sales adjustments (from prior period) (12) (31) 19 7 9 (2) 371 486 (115) Interest income Total Annual results FY2013 www.aquariusplatinum.com 28
  29. 29. P&L analysis and breakdown Cost of sales ($m) 30 June 2013 30 June 2012 Change Cost of production 296 457 (161) Amortisation and depreciation 42 56 (14) Fair value uplift 9 10 (1) Royalties: Zimbabwe 11 8 3 Total 358 531 (173) Annual results FY2013 www.aquariusplatinum.com 29
  30. 30. P&L analysis and breakdown Financing costs ($m) 30 June 2013 30 June 2012 Change Interest paid on borrowings (convertible bond, DBSA/IDC) 19 19 - Accretion of convertible bond debt (non cash) 10 10 - Accretion of mine-site rehab liability (unwinding of AQPSA’s provision non cash) 2 5 (3) Amortisation of borrowing costs (pipeline finance) non cash - 1 (1) 31 35 (4) Total Annual results FY2013 www.aquariusplatinum.com 30
  31. 31. P&L analysis and breakdown Foreign exchange ($m) 30 June 2013 30 June 2012 Change (15) (26) 11 FX loss on currency contract 24 - 24 FX loss on AQP group loans - 97 (97) FX loss on cash assets - 6 (6) FX loss on pipeline 10 18 (8) Total 19 95 (76) FX gain on sales Annual results FY2013 www.aquariusplatinum.com 31
  32. 32. P&L analysis and breakdown Income tax expense ($m) 30 June 2013 30 June 2012 Change Zimbabwe Corporate tax (8) (14) 6 Movement in Zimbabwe deferred tax (1) (4) 3 Movement in South African deferred tax 53 49 4 Total 44 31 13 Annual results FY2013 www.aquariusplatinum.com 32

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