Nov. 16, 2009 (PR Newswire) --
Positive first quarter at Bokoni
Growth projects on track to deliver 270,000 PGM (4E) ounces by 2014
Highlights for the quarter:
- Completed Lebowa Platinum Mines (now called Bokoni Mines) acquisition
- New management team in place and early "wins" from operations
- Good safety performance
- Tonnes mined and milled up by 15%
- Produced 30,835 PGM (4E)1 ounces
- Unit operating cost (in South African rand (ZAR) per tonne) decreased
by 13%
- Excellent PGM (4E) recoveries - Merensky: 92% UG2: 89%
- Narrowed operating loss
- Completed capital expenditure review and revised budgets
The past quarter saw the most significant development in the company's history - the implementation of the Lebowa transaction on
"This is our first report on the performance of Bokoni Platinum Mines, and we are pleased to be able to indicate a positive trend for both production and costs.
"Our focus at Bokoni is on both optimizing the existing mine operations and developing new mines at Brakfontein and Middelpunt Hill, ensuring that Bokoni becomes a new-generation PGM producer with significant growth prospects. The size and scale of the Bokoni orebody, together with its attractive grades and well-developed mine and support infrastructure, provides us with a number of opportunities to increase production at shallow mining depths. The new Brakfontein mine on the Merensky Reef at Bokoni represents a significant ramp-up operation and will play a key role in achieving our phase 1 growth milestone of 270,000 PGM (4E) ounces by 2014.
"Another key part of our initial work at Bokoni has been to effect a cultural turn-around at the operation. A new management team has been appointed which has developed a production ramp-up plan, implemented disciplined operating cost controls and completed a review of capital costs. We are encouraged by the early gains achieved at the operations, which have resulted in a real decrease in unit costs, rationalization of capital expenditures and identification of potential new sources of lower-cost ounces, such as those presented by the vamping(2) opportunities at the Vertical and Middelpunt Hill shafts.
"Although much work remains to be done to fully embed our new culture of delivery, accountability and empowerment at Bokoni, we have made a good start in our first operating quarter."
Review of operational and financial performance
The results for the quarter ended
Safety
Bokoni continued to report good safety performance. There were no fatal injuries during the quarter and by
Production
Mill production at 254,399 tonnes was 15% higher when compared to the average quarterly performance for the first half year, mainly because of a 15% increase in tonnes broken. This increase was largely due to a more disciplined approach to the mining effort through new mine management initiatives. A PGM (4E) head grade of 4.19 g/t was achieved for the quarter. Grade control is a key area of focus going forward. Concentrator plant recoveries PGM (4E), at 92% for Merensky and 89% for UG2, remain among the highest in the PGM industry.
As tonnes mined and milled increased metal production, when compared to the first half year, gained momentum.
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Metal produced - Q3 2009 Units
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Pt (oz) 16,668
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Pd (oz) 11,249
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Rh (oz) 1,877
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Au (oz) 1.040
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Ni (t) 214
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Cu (t) 126
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Opportunities have been identified to add low-cost tonnes from vamping at Vertical and Middelpunt Hill shafts. It is estimated that production from vamping could be effected at approximately 30% of current unit operating costs.
Total development for the quarter was 2,374 metres and on reef development was 1,253 metres. During the quarter more focus was placed on re-development and sub-development in order to ensure increased immediately available reserves for mining.
Costs
Efforts to reduce costs have yielded early positive results. Total operating costs remained constant at
In early
Other results from cost reduction and efficiency improvement efforts during the quarter include a 34% decrease in stores cost, through the implementation of a disciplined budget initiative, as well as a 13% decrease in concentrator unit costs and a 9% reduction in power (kw/h) usage.
Revenue
Metal prices remained fairly stable during the quarter, with a price recovery particularly evident in the US$ PGM prices. The gross US$ PGM basket (4E) price of
Revenues from precious metals were
Capital expenditure
Bokoni Mines remains in a high capital expenditure growth phase, as its production rates are being increased by 100% over the next three years through the ramp up of the new Brakfontein Merensky mine.
Capital expenditure for the quarter was
During the quarter, a thorough review of planned capital expenditures was undertaken. Budgeted capital expenditures were reduced without compromising the planned production build-up. Capital expenditure guidance going forward is as follows:
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2010 2011 2012 Total
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ZAR252 million ZAR282 million ZAR312 million ZAR846 million
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CAD$ 35.8 million CAD$40.1 million CAD$44.4 million CAD$120.3 million
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* Expressed in real 2009 money terms and using a CAD$1:ZAR7.03 exchange
rate
Profitability
As a result of the implementation of successful cost reduction initiatives and increased production, the operating loss margin at Bokoni reduced to 24% (as compared to an operating loss margin of 31% for the first half of the year). The Bokoni Mines had an operating loss of
The Company continued to incur losses during its high capital intensive growth phase. This resulted in a basic and diluted loss of
Cash and Facilities
The Company held cash on hand at the end of the period of
The Bokoni Mines four year growth plan to 160,000 tpm steady state production or 270,000 PGM (4E) ounces per annum remains fully funded without further recourse to capital markets.
Teleconference call details
Conference call
Johannesburg, South Africa 16:00 (local time) Toll 011 535 3600
Toll-free 0800 200 648
London, United Kingdom 14:00 (local time) Toll-free 0800 917 7042
New York, United States 09:00 (local time) Toll 1 412 858 4600
Toll-free 1 800 860 2442
Toronto, Canada 09:00 (local time) Toll-free 1 866 605 3852
Playback facility
SA & Other Code 2159 followed Toll +27 11 305 2030
by the # sign
United Kingdom Code 2159 followed Toll-free 0808 234 6771
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For further information, please contact:
For and on behalf of the Board
Philip Kotze, President and Chief Iemrahn Hassen:
Executive Officer Chief Financial Officer
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. The American Stock Exchange has neither approved nor disapproved the contents of this press release.
Cautionary and Forward Looking Information
This release includes certain statements that may be deemed "forward looking statements". All statements in this release, other than statements of historical facts, that address potential acquisitions, future production, reserve potential, exploration drilling, exploitation activities and events or developments that Anooraq expects are forward looking statements. Anooraq believes that such forward looking statements are based on reasonable assumptions, including assumptions that Bokoni (formerly Lebowa) Mines will continue to achieve production levels similar to previous years; the planned Bokoni expansions will be completed and successful. Forward looking statements however, are not guarantees of future performance and actual results or developments may differ materially from those in forward looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, changes in and the effect of government policies with respect to mining and natural resource exploration and exploitation and continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward looking statements. For further information on Anooraq, investors should review the Company's annual information form filed on www.sedar.com or its form 20-F with the United States Securities and Exchange Commission and its other home jurisdiction filings that are available at www.sedar.com.
(1) PGM (4E) means platinum, palladium, rhodium and gold
(2) Vamping is a mining operation for the removal of previously broken
tonnage left underground during mining operations
SOURCE Anooraq Resources Corporation
