VANCOUVER,
Nov. 15, 2011 /PRNewswire/ - Anooraq
Resources Corporation ("Anooraq" or the "Company" or, together with
its subsidiaries, the "Group") (TSXV: ARQ; NYSE Amex: ANO; JSE:
ARQ) announces its operational and financial results for the three
months ended September 30, 2011 ("Q3
2011"). This release should be read with the Company's unaudited
interim financial statements for the three and nine months ended
September 30, 2011 and related
Management Discussion & Analysis, available at
www.anooraqresources.com and filed on SEDAR at www.sedar.com.
Currency values are presented in South African rand ("ZAR"),
Canadian dollars ("C$") and United
States dollars ("US$").
Key features of the quarter
- Disappointing safety performance
- 20% improvement in production volumes quarter-on-quarter
- Development continues to improve mining flexibility
- 14% improvement in unit cost performance
quarter-on-quarter
- Two-year wage deal concluded
Harold Motaung, CEO of Anooraq,
commented, "During the third quarter, 2011 we began to see the
results of certain on mine initiatives which have improved mining
fundamentals and established a better foundation for operational
improvements at Bokoni.
These improvements have resulted in improved
production and development volumes at Bokoni, together with reduced
unit costs quarter-on-quarter, despite wage inflation increases and
other continuing cost pressures.
Key areas of concern remain safety which
deteriorated over the quarter, whilst operating costs continue to
come under pressure as a result of the significant increase in
development, wage inflation increases effective July 2011 and other inflationary pressures, such
as increased utility charges.
Our challenge is now to build on the much
improved operational foundation at Bokoni which we have developed
during the past two quarters and to ensure that we continue to show
positive trends on operational and financial metrics going
forward."
Review of operational and financial
performance in Q3 2011
Safety
Anooraq's safety performance saw some
deterioration quarter-on-quarter. Bokoni's lost time injury
frequency rate ("LTIFR") deteriorated by 13% quarter-on-quarter to
1.66 per 200,000 hours worked. Despite the safety trend improving
by 33% when measured against the third quarter of 2010, the decline
in our current safety improvement trend is disappointing, given our
"zero harm" target at Bokoni. No fatalities were recorded for
the quarter and on 19 July, 2011
Bokoni achieved one million fatality-free shifts. The operations
lost six operating shifts due to Section 54 safety stoppages.
Development
Our focus on improved development continues with
total primary development improving 2% quarter-on-quarter. Notably,
primary reef development improved 24% quarter-on-quarter to 1,202
metres, whilst re and sub development increased to 4,570 metres, up
300% when measured against the third quarter of 2010. Creating the
required mining flexibility at Bokoni remains a priority. These
improved development initiatives had a negative impact on the
financial performance of the operations in the short term, but will
generate enhanced returns at Bokoni in the medium term. The
required mining flexibility will ensure that all stoping crews have
blast friendly panels available to mine on a continuous basis,
despite incidences of increased potholing, particularly at the
Merensky operations.
Grade
The operations achieved a head (delivered) grade
of 3.94 g/t (4E) for the quarter, a 3% reduction quarter-on-quarter
and a 3% decrease when compared to the third quarter of 2010,
primarily due to increased re and sub development initiatives at
the operations.
Recoveries
Concentrator recoveries improved marginally
during the period, with Merensky recoveries improving by 4% to 88%
and UG2 recoveries remaining at 81%. Recovered grade (4E) improved
5% quarter-on-quarter from 3.28 g/t to 3.44 g/t.
Production
Tonnes milled for the quarter were 302,923
tonnes, 20% higher than the third quarter of 2010. Increased
production volumes yielded a total of 33,358 4E ounces, a 19%
improvement quarter-on-quarter and an 8% improvement, when measured
against the third quarter of 2010.
The key production and development parameters
for Bokoni in Q3 2011 were:
|
|
Q2 2011 |
Q3 2011 |
Variance
Q-on-Q |
Q3 2010 |
Variance
Q3 11 vs
Q3 10 |
Tonnes delivered |
Tonnes |
258,882 |
301,208 |
22% |
282,173 |
7% |
Total primary
development |
Metres |
2,549 |
2,600 |
2% |
2,618 |
- |
Head grade
(delivered) |
g/t, 4E* |
4.05 |
3.94 |
(3%) |
4.08 |
(3%) |
Tonnes milled |
Tonnes |
266,866 |
302,923 |
14% |
252,861 |
20% |
4E ounces
produced* |
Ounces |
28,119 |
33,358 |
19% |
30,877 |
8% |
* 4E consists of platinum, palladium, rhodium and gold
Metal production was as follows:
Metal |
|
Q2 2011 |
Q3 2011 |
Variance
Q-on-Q |
Q3 2010 |
Variance
Q3 11 vs
Q3 10 |
Platinum |
Ounces |
15,499 |
18,439 |
19% |
16,838 |
10% |
Palladium |
Ounces |
10,027 |
11,821 |
18% |
11,136 |
6% |
Rhodium |
Ounces |
1,593 |
1,849 |
16% |
1,802 |
3% |
Gold |
Ounces |
1,000 |
1,249 |
25% |
1,101 |
13% |
Nickel |
Tonnes |
236 |
278 |
18% |
219 |
27% |
Copper |
Tonnes |
143 |
169 |
18% |
131 |
29% |
Revenue and costs
Revenue for Q3 2011 amounted to C$45.3 million (ZAR327.7
million), representing a 26% increase quarter-on-quarter and
a 31% increase when compared to the corresponding period in
2010.
Higher revenues resulted from increased
production volumes, together with a 4% quarterly increase in the
ZAR platinum group metals (PGM) basket price received, offsetting a
1% decrease in the US$ PGM basket price during the period. PGM
basket prices achieved for Q3 2011 increased to ZAR 10,102/4E Oz (US$1,414/ 4E Oz), up 18% (US$) and 15% (ZAR) when
compared to the third quarter of 2010. Higher production
volumes resulted in a 14% decrease in unit operating costs
quarter-on-quarter, to US$1,375/4E
ounce.
Profitability
The Bokoni operations achieved an operating
profit of C$1.1 million (ZAR4.4 million) for the quarter, largely
attributable to increased production volumes and a higher PGM
basket price.
The Company incurred a basic and diluted loss
per share of C$0.04 for Q3 2011,
largely attributable to increased debt financing charges. Anooraq's
current debt structure is under review, pursuant to an intended
refinancing, restructuring and recapitalization transaction for
Bokoni and Anooraq, currently being negotiated between Anglo
American Platinum Limited and Anooraq, as referenced in the
cautionary announcements dated 13 May
2011, 28 June 2011,
10 August 2011, 21 September 2011 and 2
November 2011.
Capital expenditure
Capital expenditure during Q3 2011 amounted to
ZAR42.9 million, a reduction of 25%
compared to the second quarter of 2011 expenditure.
Wage negotiations
During Q3 2011, Bokoni concluded a two-year wage
agreement with the Togetherness Amalgamated Workers' Union of
South Africa ("TAWUSA"), the
National Union of Mineworkers ("NUM") and the United Association of
South Africa ("UASA") providing
for increases ranging from 8 to 9% for both years. These
increases are effective from 1 July
2011.
The agreement was negotiated and finalized with
no disruption to the Company's operations.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release. The NYSE Amex has neither
approved nor disapproved the contents of this press release.
Cautionary and forward-looking
information
This document contains "forward-looking
statements" that were based on Anooraq's expectations, estimates
and projections as of the dates as of which those statements were
made, including statements relating to the Bokoni Group restructure
and refinancing and anticipated financial or operational
performance. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as "may",
"will", "outlook", "anticipate", "project", "target", "believe",
"estimate", "expect", "intend", "should" and similar
expressions.
Anooraq believes that such forward-looking
statements are based on material factors and reasonable
assumptions, including the following assumptions: the Bokoni Mine
will increase or continue to achieve production levels similar to
previous years; the Ga-Phasha, Boikgantsho, Kwanda and Platreef
Projects exploration results will continue to be positive;
contracted parties provide goods and/or services on the agreed
timeframes; equipment necessary for construction and development is
available as scheduled and does not incur unforeseen breakdowns; no
material labour slowdowns or strikes are incurred; plant and
equipment functions as specified; geological or financial
parameters do not necessitate future mine plan changes; and no
geological or technical problems occur.
Forward-looking statements are subject to known
and unknown risks, uncertainties and other factors that may cause
the Company's actual results, level of activity, performance or
achievements to be materially different from those expressed or
implied by such forward-looking statements. These include but are
not limited to:
- uncertainties related to the completion of the Bokoni Group
restructure and refinancing;
- uncertainties and costs related to the Company's exploration
and development activities, such as those associated with
determining whether mineral resources or reserves exist on a
property;
- uncertainties related to feasibility studies that provide
estimates of expected or anticipated costs, expenditures and
economic returns from a mining project;
- uncertainties related to expected production rates, timing of
production and the cash and total costs of production and
milling;
- uncertainties related to the ability to obtain necessary
licenses, permits, electricity, surface rights and title for
development projects;
- operating and technical difficulties in connection with mining
development activities;
- uncertainties related to the accuracy of our mineral reserve
and mineral resource estimates and our estimates of future
production and future cash and total costs of production, and the
geotechnical or hydrogeological nature of ore deposits, and
diminishing quantities or grades of mineral reserves;
- uncertainties related to unexpected judicial or regulatory
proceedings;
- changes in, and the effects of, the laws, regulations and
government policies affecting our mining operations, particularly
laws, regulations and policies relating to:
-
- mine expansions, environmental protection and associated
compliance costs arising from exploration, mine development, mine
operations and mine closures;
- expected effective future tax rates in jurisdictions in which
our operations are located;
- the protection of the health and safety of mine workers;
and
- mineral rights ownership in countries where our mineral
deposits are located, including the effect of the Mineral and
Petroleum Resources Development Act (South Africa);
- changes in general economic conditions, the financial markets
and in the demand and market price for gold, copper and other
minerals and commodities, such as diesel fuel, coal, petroleum
coke, steel, concrete, electricity and other forms of energy,
mining equipment, and fluctuations in exchange rates, particularly
with respect to the value of the U.S. dollar, Canadian dollar and
South African rand;
- unusual or unexpected formation, cave-ins, flooding, pressures,
and precious metals losses (and the risk of inadequate insurance or
inability to obtain insurance to cover these risks);
- changes in accounting policies and methods we use to report our
financial condition, including uncertainties associated with
critical accounting assumptions and estimates; environmental issues
and liabilities associated with mining including processing and
stock piling ore;
- geopolitical uncertainty and political and economic instability
in countries which we operate; and
- labour strikes, work stoppages, or other interruptions to, or
difficulties in, the employment of labour in markets in which we
operate mines, or environmental hazards, industrial accidents or
other events or occurrences, including third party interference
that interrupt the production of minerals in our mines.
For further information on Anooraq, investors
should review the Company's annual Form 40-F filing with the United
States Securities and Exchange Commission www.sec.gov and annual
information form for the year ended December
31, 2010 and other disclosure documents that are available
on SEDAR at www.sedar.com.
SOURCE Anooraq Resources Corporation