JOHANNESBURG (miningweekly.com) – South Africa-focused platinum miner Aquarius increased its output by 2% quarter-on-quarter and 5% year-on-year to 174 953 oz of platinum-group metals (PGMs) in the three months ended December 31.

This was despite a sharp drop, by 8%, in PGM prices during the period to $1 208/oz  – the lowest for 2014 and similar to prices in July 2009.

Although the 111 115 oz of PGMs produced by the company’s 50%-owned Kroondal mine had remained relatively flat compared with the September 2014 and the December 2013 quarters respectively, the mine had recorded its eighth consecutive quarter of exceeding 105 000 oz.

The mine’s revenue had, however, decreased by 17% quarter-on-quarter to R1-billion, owing to lower rand prices and a negative sales adjustment of R87-million as a result of lower metal prices.

Its 50%-owned Zimbabwe-based Mimosa mine, meanwhile, attained a new quarterly production record of 60 842 oz, while production at the 100%-owned Platinum Mile mine increased to 2 996 oz in the quarter under review.

The Mimosa management team had identified a number of cost saving initiatives, which were being implemented, to mitigate the mine’s rising cost pressures.

The company noted that this had been the highest attributable quarterly production for a quarter from Kroondal, Mimosa and Platinum Mile combined.

“Increased production, coupled with excellent cost management, enabled Aquarius to generate positive operational cash flows,” CEO Jean Nel commented.

“The operating teams under the leadership of [MD] Rob Schroder deserve much credit for the performance,” he added.

Further, a 1% quarter-on-quarter decrease in cash costs at Kroondal to R8 925/oz and a 4% quarter-on-quarter decrease in cash costs at Mimosa to $781/oz also bolstered Aquarius’ results.

PLATINUM PRICE
In the quarter under review, the platinum price had fallen as a result of a drag in falling gold prices and a sizable quantum of above ground stocks.

“Auto-related demand has shown signs of firming across Europe, amplified by the implementation of Euro 6 legislation, and jewellery demand has been responsive to lower prices. China’s platinum imports have softened and have not been offset by imports into Hong Kong,” the company said in a statement.

After being dragged lower alongside the rest of the PGM complex, palladium had, however, managed to recover and traded, at times, above the $800/oz level. Destocking helped China’s palladium imports to recover during 2014, with the average monthly imports reaching 65 000 oz compared with 60 000 oz in 2013.

Aquarius was not expecting PGM prices to increase materially in the short term, given muted demand growth and “continued supply of metal from unprofitable mining operations in South Africa”.

“In this regard, Aquarius will continue to focus on operational efficiencies and excellence to improve margins,” stated Nel.