ANOORAQ ANNOUNCES RESULTS FOR THE PERIOD ENDED DECEMBER 31, 2010
Anooraq maintains production levels through challenging quarter, returns
mine to operating profit
VANCOUVER, March 24 /PRNewswire-FirstCall/ – Anooraq Resources Corporation (“Anooraq” or
the “Company”) (TSXV: ARQ) (NYSE: ANO) (JSE: ARQ) announces production
from the Bokoni Platinum Mines (“Bokoni”) and its financial results for
the three and twelve months ended December 31, 2010. This release
should be read with the Company’s Financial Statements and Management
Discussion & Analysis, available at www.anooraqresources.com and filed on www.sedar.com. Currency values are presented in South African Rand (ZAR), Canadian
dollars (C$) and United States dollars (US$).
Key features for the quarter and financial year:
-- 4E oz produced up by 7% quarter-on-quarter to 30,776 oz1, year-on-year production remained steady at 116,164 oz -- Tonnes milled up by 10% quarter-on-quarter to 278,242 tonnes, 11% year-on-year increase to 1,044,084 tonnes -- Operational stability achieved at concentrator, stockpile depleted o recovered grade improved 4% in quarter to 4.17 g/t 4E -- Improved revenues reflect improving PGM market conditions -- Fatality suffered at Middelpunt Hill shaft
The final quarter of the 2010 financial year maintained the year’s focus
on production, in line with the Company’s Phase 1 growth plan.
Philip Kotze, President and Chief Executive Officer (“CEO”) of Anooraq,
“The 2010 year has been one of mixed performance for Anooraq and Bokoni.
Many of the managerial and operational changes implemented at Bokoni
post the takeover in July 2009 have been successful, and the improved
mining performance is testament to the validity of our on-mine
strategy. We continue to focus on operational performance, with
improved mining flexibility key to our ability to deliver results. The
concentrator upgrade took longer than we anticipated but we are
starting to see results with higher and more consistent yields.
Importantly, we have made enormous strides in transforming our
operating culture and in embedding many basic good practices in terms
of mining and development, efficiencies, planning and cost control,
into the running of the Company.”
Review of operational and financial performance
The Bokoni lost-time injury frequency rate (“LTIFR”) decreased from 2.46
to 2.32 hours per 200,000 hours worked quarter-on-quarter, a pleasing
downward trend. Previous LTIFR statistics have been restated to include
serious accidents. We regret to report that there was one fatal
accident during the quarter, on 7Â November 2010 at Middelpunt Hill
shaft.Â Seven shifts were lost as a result of stoppages in terms of
section 54 of the South African Mine Health and Safety Act (Act 29 of
1996) (“Section 54 stoppages”). As a result, Anooraq is focusing on
managing safety proactively through an internal safety audit programme
and the execution of the Rethusanang training programme.
Mining activities delivered a mixed performance with tonnes produced
decreasing by 9% quarter-on-quarter to 258,033 tonnes, mainly as a
result of Section 54 stoppages.Â Development rates dropped by 22% as a
result of infrastructural development around the main stations and the
impact of Section 54 stoppages. However, tonnes milled increased by 10%
during the quarter to 278,242 tonnes, with head grade and recovered
grade rising by 6% to 4.41g/t 4E and 4% to 4.17g/t 4E respectively.
Metal production during the quarter increased by 7% to 30,776 4E ounces
(Q3 2010: 28,868 4E ounces).The steady production rate across the
quarter reflects the operational stability achieved at the concentrator
post the automation transition in September 2010. An adjustment was
made to the ore stockpile assessment during the quarter, resulting in a
write down of CAD$3.8 million (ZAR26 million), which had a negative
impact on operating costs and operating profit during the fourth
A summary of the metal produced at Bokoni for the quarter is as follows:
_____________________________________________________________ |Metal |Q3 2010 production|Q4 2010 production|Variance| |______________|__________________|__________________|________| |Platinum (oz) |15,742 |17,050 |8% | |______________|__________________|__________________|________| |Palladium (oz)|10,411 |10,905 |5% | |______________|__________________|__________________|________| |Rhodium (oz) |1,685 |1,679 |- | |______________|__________________|__________________|________| |Gold (oz) |1,030 |1,142 |11% | |______________|__________________|__________________|________| |Nickel (t) |219 |264 |21% | |______________|__________________|__________________|________| |Copper (t) |131 |164 |25% | |______________|__________________|__________________|________|
The year-on-year comparison is as follows:
_____________________________________________________________ |Metal |FY 2009 production|FY 2010 production|Variance| |______________|__________________|__________________|________| |Platinum (oz) |61,807 |63,141 |2% | |______________|__________________|__________________|________| |Palladium (oz)|43,713 |42,180 |(4%) | |______________|__________________|__________________|________| |Rhodium (oz) |7,169 |6,752 |(6%) | |______________|__________________|__________________|________| |Gold (oz) |3,897 |4,091 |5% | |______________|__________________|__________________|________| |Nickel (t) |838 |898 |7% | |______________|__________________|__________________|________| |Copper (t) |499 |543 |9% | |______________|__________________|__________________|________|
Production has remained steady across the financial year, with an 11%
increase in tonnes milled to 1,044,085 tonnes (2009: 943,403 tonnes).
This was tempered by a 4% decrease in recovered grades as a result of
the concentrator automation transition completed during the year and
accompanying processing downtime which had a negative impact on
____________________________________________________________ | | |FY2009 |FY2010 |Variance| |_________________|_______________|_______|_________|________| |Tonnes milled |tonnes |943,403|1,044,084|11% | |_________________|_______________|_______|_________|________| |Head grade (grade|g/t, 4E* |4.26 |4.18 |(2%) | |delivered) | | | | | |_________________|_______________|_______|_________|________| |Recovered grade |g/t milled, 4E*|4.31 |4.12 |(4%) | |_________________|_______________|_______|_________|________| |4E oz produced** |oz |116,586|116,164 |-% | |_________________|_______________|_______|_________|________|
The Company’s primary development focus remains to create mining
flexibility, as evidenced through the deployment of dedicated re- and
sub-development, and equipping crews. The mine’s improved mining
layouts are mostly complete and the new TM3 equipment is now on site
which will improve vehicle availability and efficiencies at our
trackless operations. This dedicated development focus at the
operations, employed during the past year, should yield better
operational results for Bokoni moving into the second half of 2011,
once the effects of such development efforts to generate additional
immediately mineable stopes (IMS) take full effect.
Total on mine operating costs quarter-on-quarter (including treatment
charges) rose 2% to ZAR1,058/tonne, however stripping out the
stockpile-associatedÂ cost writeback provides a closer-to-target
ZAR964/tonne operating cost figure. The per ounce operating costs rose
6% and 12% respectively to ZAR9,566/4E oz (US$1,386/4E oz), reinforcing
ZAR strength through the quarter.
Revenue increased by 25% quarter-on-quarter to C$43,244 (22% in ZAR
terms to ZAR296,177) in Q4, reflecting the higher basket price despite
a stronger rand. The US$/PGM 4E ounce price increased by 13% during the
quarter to US$1,357, while the ZAR/US$ exchange rate strengthened by
Revenue for the 2010 financial year rose to C$148,287, reflecting the
43% increase in the US$/PGM 4E ounce basket price over the period to
US$1,257. The ZAR strengthened some 13% against the US dollar over the
period, therefore limiting the impact of the rising ZAR basket price.
Bokoni mines returned an operating profit in the quarter, however the
loss after tax on a consolidated level increased by 15% to C$32,401
(ZAR223,733).The higher loss after tax is due to an increase in
interest expenses as a result of additional facility draw downs to fund
Bokoni’s capital expansion programme and a prior year deferred tax
adjustment on mineral rights.
Capital expenditure, cash and facilities
Bokoni remains in a high capital growth expansion phase through to 2014
with project expansions continuing at the Brakfontein Merensky and
Middelpunt Hill UG2 shaft operations.Â Capital expenditure for the
quarter was C$11 million (ZAR74.5 million), with drawn facilities
amounting to C$57.2 million (ZAR378.5 million) and available facilities
as at December 31 of C$56.1 million (ZAR371.5 million).
Results presentation: conference call details
Philip Kotze, President and CEO of Anooraq, will host a conference call
to discuss the Company’s operational and financial results for the
quarter ended December 31, 2010 at 10:00 Eastern Standard Time (“EST”)
(16:00 Central African Time (“CAT”)) on Thursday, March 24, 2010. The
dial-in details for the conference call are listed below. A playback
will be available for three days after the call on this website. The
presentation to be used during the call will be available for
downloading on the Company’s website at 09:45 EST (15:45 CAT) on
Thursday, March 24, 2010.
_____________________________________________________________________ |Johannesburg, South |16:00 (local time)|Toll |+27 11 535 3600 | |Africa | | | | |_______________________|__________________|_________|________________| | | |Toll-free|+27 800 200 648 | |_______________________|__________________|_________|________________| |London, United Kingdom |14:00 (local time)|Toll-free|+44 800 917 7042| |_______________________|__________________|_________|________________| |New York, United States|10:00 (local time)|Toll |+1 412 858 4600 | |_______________________|__________________|_________|________________| | | |Toll-free|+1 800 860 2442 | |_______________________|__________________|_________|________________| |Toronto, Canada |10:00 (local time)|Toll-free|+1 866 605 3852 | |_______________________|__________________|_________|________________|
____________________________________________________________ |SA and other |Code 2159#|Toll |+27 11 305 2030 | |______________________|__________|_________|________________| |United Kingdom |Code 2159#|Toll-free|+44 808 234 6771| |______________________|__________|_________|________________| |United States & Canada|Code 2159#|Toll |+1 412 317 0088 | |______________________|__________|_________|________________|
For and on behalf of the Board
Philip Kotze, President and Chief Executive Officer
De Wet Schutte: Chief Financial Officer
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. Generally, these forward-looking
statements can be identified by the use of forward-looking terminology
such as “outlook”, “anticipate”, “project”, “target”, “believe”,
“estimate”, “expect”, “intend”, “should” and similar expressions.
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 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 o mine expansions, environmental protection and associated compliance costs arising from exploration, mine development, mine operations and mine closures; o expected effective future tax rates in jurisdictions in which our operations are located; o the protection of the health and safety of mine workers; and o 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 20-F filing with the United States Securities and
Exchange Commission www.sec.com and home jurisdiction filings that are available at www.sedar.com.
Â¹4E consists of platinum, palladium, rhodium and gold
SOURCE Anooraq Resources Corporation