JOHANNESBURG (miningweekly.com) – Despite facing significant headwinds and a quarter that ended with weak commodity prices, both of platinum producer Aquarius Platinum’s operating mines achieved record fourth-quarter production levels, as well as lower costs.
The JSE-listed group’s overall attributable production from its operating Kroondal and Mimosa mines edged up 5% quarter-on-quarter and 6% year-on-year during the three months to June 30.
Kroondal, in South Africa, and Mimosa, in Zimbabwe, achieved quarter-on-quarter platinum group metal (PGM) production increases to 112 024 oz – Kroondal’s tenth consecutive quarter above 105 000 oz – and 60 035 oz respectively.
Kroondal’s unit costs continued on a downward trend, registering a 4% quarter-on-quarter and 2% year-on-year decline to $763/oz for the quarter under review, owing to improved volumes, Aquarius CEO Jean Nel commented.
Mining cash costs at Mimosa remained unchanged at around $797/oz.
However, the quarter ended on a weak pricing platform, with the average dollar PGM basket price decreasing 4% during the quarter – equating to a 16% decline compared with the corresponding quarter the year before.
Kroondal’s PGM basket price decreased 3% quarter-on-quarter and 5% year-on-year to average $1 005/oz, while Mimosa’s PGM basket price fell 3% quarter-on-quarter and 13% year-on-year to average around $1 010/oz.
“From a macro perspective, the lower metal prices, which prevailed during the period and especially post-quarter end, will not only require an increased focus on safety, cost and production discipline, but also a focused assessment of the viability of each shaft at each operating mine to ensure the sustainability of the business in a low metal price environment,” Nel said.
Precious metals suffered “a weak end to the quarter”, with the price of palladium decreasing to almost a two-year low at $675/oz and platinum ending the quarter 6% down at $1 080/oz, both largely driven by exchange-traded products outflows and weaker than expected Chinese consumption.
Aquarius closed the fourth quarter of the year with $201-million in cash.