JOHANNESBURG (miningweekly.com) – Triple-listed Atlatsa Resources’ Bokoni mine, in South Africa, produced 194 036 platinum, palladium, gold and rhodium (4E) platinum-group metal (PGM) ounces in the 2014 financial year – a 13.9% increase on the 170 295 oz produced the year before.
This was also the mine’s highest production since 2006.
Atlatsa attributed the higher output to better operating efficiencies, improved mining flexibility and improved grade control.
Meanwhile, the company’s sales revenues increased by 21.4% year-on-year to C$237.4-million.
Revenue was boosted by a 12.4% weakening of the rand against the dollar over the period, from R9.65/$ in 2013 to R10.85/$ in 2014. The average dollar sales price realised during the current period declined marginally by 0.5% from $1 112/oz to $1 107/oz.
Further, mine development decreased by 2.9% year-on-year to 10 735 m, as planned, following a strategic decision to reduce development to a level sufficient to meet the Bokoni mine’s stoping flexibility requirements.
“In a challenging economic environment for South African PGM producers, mine management continues to focus on various initiatives to improve operational efficiencies, disciplined capital allocation and cost management, without compromising Bokoni mine’s existing ramp-up plan,” the company said in a statement.
Despite the high mining returns, the company still reported a basic and diluted loss a share of C$0.05, compared with basic and diluted earnings a share of C$0.47 and C$0.46 a share respectively, in 2013, which resulted in a headline loss of C$23.6-million.
Speaking in a conference call, Atlatsa CEO Harold Motaung noted that the past financial year was “a very challenging one for all PGM participants”, adding that the negative pricing trend had worsened.
“The current industry is based on how companies are going to reposition themselves for long-term sustainability,” he said.
Atlatsa stated that more emphasis would be placed on pothole management, with a focus on secondary development to improve the face length available for mining.
Recoveries at the concentrator plant decreased by 0.2% to 89.6% and 1.3% to 85.6% for the Merensky and upper group two (UG2) concentrate, respectively, as a result of an increase in throughput and processing of lower-grade ore from the opencast operation.
The Brakfontein Merensky and Middelpunt Hill UG2 development shafts remained in their ramp-up phase in line with the mine plan and were on target to achieve steady-state production levels of 100 000 t/m and 60 000 t/m respectively by 2018.
The gap between the mill’s installed processing capacity of 160 000 t/m and current underground ore production of 140 000 t/m would continue to be filled by ore generated from the opencast operation, which would be managed on a flexible volume basis to produce sufficient material for this purpose.
Total cash operating costs were 16.4% higher, reflecting the higher volumes sold. In addition to increased production, the cost increase was largely attributable to a 10.8% increase in labour costs as a result of yearly wage increases and an increase in production bonus payments during the year; a 42.2% increase in contractor costs as a result of increased tonnes delivered at the Klipfontein opencast mine; a 13.9% increase in stores costs owing to an increase in square metres mined and increased working cost development.
Further, the company also attributed cost increases to a 10% increase in utility costs as a result of increased production and an 8% increase in the power tariff by parastatal Eskom, while a 24% increase in sundries, owing to a 40% increase in the cost of spare parts and maintenance, related to drilling equipment mainly used at the Brakfontein shaft, which also impacted the bottom line.
Atlatsa spent $35.1-million in capital expenditure (capex) at Bokoni during the financial year, compared with $51.2-million in 2013. Capex comprised 29% sustaining capital and 71% project expansion capital associated with the two key ramp-up shaft operations.
The 31.5% decrease in capex was as a result of a strategic decision by management to employ a “just in time” approach to capital development at the operations in an effort to reduce cash flow expenditure through improved capital discipline, without compromising the Bokoni mine’s development plan.