JOHANNESBURG (miningweekly.com) – Platinum miner Aquarius Platinum narrowed its after-tax net loss for the three months ended September 30, to $10-million, from $19.6-million in the prior comparative period.

The company’s revenue for the first quarter of the 2014 financial year was also up marginally at $60-million, compared with $58-million in the first quarter of the 2013 financial year.

The higher revenue, achieved despite the lower platinum-group metals (PGMs) basket price, was driven by a 16% year-on-year increase in production at Aquarius’s 50%-owned Kroondal operation to 106 441 oz of platinum, palladium, rhodium and gold (4E) PGMs for the quarter ended September, compared with the 92 073 oz of 4E PGMs produced in the quarter ended September 2012.

Further, Aquarius reported earnings before interest, tax, depreciation and amortisation (Ebitda) of $6.3-million for the three months ended September 30, a $4.7-million increase from the $1.6-million recorded in the previous corresponding period.

However, the company’s Ebitda was down $4-million quarter-on-quarter, owing to higher costs and lower recoveries at its Kroondal operation.

Revenue from the company’s Mimosa operation, in Zimbabwe, was lower owing to a $5.3-million negative sales adjustment incurred during the quarter.

Aquarius’ attributable production increased 9% year-on-year to 84 504 oz of 4E PGMs. Production was, however, 2.6% lower quarter-on-quarter.

“The quarter in question was yet another challenging quarter on all fronts. However, despite the challenges we faced, all operations delivered production results in line or above forecast,” Aquarius CEO Jean Nel commented.

He pointed out that Kroondal had exceeded its forecast production levels, having delivered in excess of 100 000 oz of 4E PGMs for the fourth consecutive quarter, despite both concentrator plants undergoing planned maintenance during the quarter and despite the mine encountering geological and consequential recovery problems throughout the quarter.

London-based Liberum Capital commented that production results were in line with expectations, as the Kroondal operation continued to see the benefits of the transfer to becoming an owner-operated mine the mine’s revised hanging wall system that was implemented.

Cash costs peer PGM ounce at Mimosa increased 1% year-on-year; however, cash costs decreased 4% quarter-on-quarter to $838/oz.

Meanwhile, cash costs at Kroondal decreased 1% year-on-year, but increased 17% quarter-on-quarter.

Higher costs at Kroondal were mainly driven by a one-off adjustment in leave provisions, which added 6% to costs; the implementation of the wage increase in July, which added 4%; winter electricity tariffs, which added 3%; and lower concentrator plant recoveries, Aquarius said.

“The credible operational performance for the quarter, and the significant reduction in the company’s corporate cost base notwithstanding, our business remains marginal at prevailing metal prices, where no improvement appears imminent. Against this backdrop, management will remain resolute in its focus on improved safety, cost and operational performance,” Nel said.

Liberum added that while company-level performance remained strong with structurally high South African cost inflation, market conditions remained far outside the levels required for the platinum industry’s sustainability.

“The platinum price remains lacklustre despite record Chinese jewellery demand, record exchange-traded fund buying and imminent strike action at other companies. It remains unclear when platinum will break free from gold’s downward trend,” Liberum stated.