Platinum Mile‚ a tailings retreatment facility‚ gets its feed stock from an Amplats' concentrator plant.
"Net-net‚ we believe Aquarius is largely over its financial and operational hurdles‚" said SBG Securities analyst Setendra Naidoo in a note.
"The platinum miner had been " transformed to a company that could adequately see itself through a constrained basket pricing scenario while remaining significantly leveraged to improving basket prices‚ which may potentially see (it) returning to a significant free cash flow generator".
The Kroondal mine in South Africa notched up its sixth consecutive quarter of platinum group metal (PGM) production above 105‚000oz‚ marking the benefits of moving away from contractor mining to employing its own mining workforce during last year.
Unlike its major peers in the Rustenburg area‚ Aquarius agreed to a three-year wage deal with the National Union of Mineworkers and other trade unions without a damaging strike.
"The successful conclusion of three-year wage agreements ... was also very pleasing and testimony to good labour relations between Kroondal and its workforce as well as represented unions‚" CEO Jean Nel said on Thursday, 24 July 2014.
Production at Kroondal‚ which is shared by Aquarius and Amplats‚ was 106‚181oz‚ 2% lower than in the March quarter. Half of that output is attributable to Aquarius.
Aquarius had a cash margin of 17%. It had cash costs of $890/oz.
"While 17% cash margins still leave little room for error‚ management are doing a good job against a challenging environment‚" said John Meyer from SP Angel.
The Mimosa mine‚ which is shared with Impala Platinum‚ produced 60‚818oz‚ a 17% quarter-on-quarter increase.
"Mimosa delivered an equally credible production and cost performance despite implementing a significant voluntary retrenchment programme during the quarter‚" Mr Nel said. "This programme is expected to contribute to lower costs at Mimosa going forward."
The cost per PGM ounce rose 2% in the June quarter to $908 because of the retrenchment bill of $5.3m. This added $105 to each ounce produced‚ but the gross profit margin jumped to 30% from 26%.
Platinum Mile had no production in the quarter compared with 289oz in the strike-affected March quarter and 4‚810oz in the June period a year ago. It will receive feed again at the end of this month.
Aquarius completed a rights offer and limited convertible bond tender offer‚ reducing debt owing to bond holders from $298m to $125m and boosting its cash coffers.
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