Aquarius Platinum Ltd – Overcoming its Operational Issues

• Aquarius’ share price has more than halved in the past year to a low of A$5.00 due to the Rand’s strength, and lower non-Pt PGE prices, while possibly overreacting to BEE (Black Economic Empowerment), the expected Money Bill’s royalty rates, the perceived forex exposure/money pipeline (due to accounting the sale of pges 3 months before they occur, and booking the difference), Zimbabwe’s financial influence on Mimosa, and operational restrictions at Kroondal and Marikana.
• The strengthening Rand is materially increasing the costs on the South African operations, (a R125/t cash cost at Kroondal becomes US$17.90/t at ZAR7/US$, compared to US$13.90/t at ZAR9/US$). The Rand corrected slightly to 7.5/US$ on Friday 2 May, but remains volatile as the US$ continues to weaken against the Euro (reputedly from the oil nations switching currency, and the US financing Iraq)
• The operational restrictions being encountered by Kroondal in the form of potholes and other geological disturbances were being rectified during the March Qtr 2003, since face availability had risen to over 80% on one of the shafts in February, while only 67% is required to attain a 250,000tpm throughput rate.
• Marikana is being commissioned on low recovery oxide and transition ore for the period to May 2003 when it is expected to begin increasing its blend of sulphide to about 75% by September 2003, with production gradually building up to an expected 130,000ozpa 4E, and possibly an expanded 160,000ozpa.