Aquarius Platinum Output Falls; Takes More Action To Cut Costs

By Alex MacDonald

LONDON--South Africa's Aquarius Platinum Ltd. (AQP.LN) Thursday reported lower output last quarter compared with the previous three months, and said it's taking more drastic action to cut costs further in response to tumbling prices.

The miner, whose shareholders last week approved a takeover offer from South Africa's Sibanye Gold Ltd. (SGL.JO), said it produced 89,399 platinum group of metal ounces during its second fiscal quarter, which ended Dec. 31, 2015. This is down 4% on the quarter but up 0.5% on the year.

Output fell on a quarterly basis due to lower grades and a work stoppage at Aquarius's Kroondal mine in South Africa. The fall more than offset a marginal increase in production from its Mimosa mine in Zimbabwe.

During the same period, Aquarius also reported a 7% drop in its achieved average sales price to $802 an ounce, reflecting relatively lackluster demand among jewelry and automakers and excess platinum supply globally.

On a positive note, the company reduced its average cash cost at both mines to $648 an ounce and $772 an ounce respectively during the quarter, largely due to the weakening of the South African rand against the U.S. dollar, which has made it cheaper to pay local salaries and energy bills despite increases in both.

Aquarius said it's making progress towards satisfying the conditions to complete Sibanye's $294 million cash purchase of the platinum producer.

The deal would make Sibanye, South Africa's largest gold producer by output, the world's fifth-largest platinum producer with annual production of more than one million platinum equivalent ounces.

-Write to Alex MacDonald at [e-mail]

(END) Dow Jones Newswires

January 28, 2016 06:23 ET (11:23 GMT)

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