Aquarius holders nod Sibanye deal as revenue dips 31%

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Harare - Shareholders in Aquarius Platinum [JSE:AQP] have voted in favour of an acquisition bid by Sibanye Gold [JSE:SGL] worth about $294m, Aquarius chief executive officer, Jean Nel, said on Tuesday, adding that the deal now awaits final approval by the SA Competition Commission.

Aquarius operates the Mimosa mine in Zimbabwe (jointly held together with Impala Platinum [JSE:IMP]) as well as the Kroondal mine in SA. On Tuesday, Aquarius reported lower operating costs from its mines for the half year to December, with revenues declining 31% to $78m due to weaker metal prices.

“Following the approval by Aquarius Platinum shareholders of the amalgamation in general meeting on 18 January 2016, Aquarius Platinum continues to co-operate with Sibanye in fulfilling the remaining conditions precedent to the Amalgamation Agreement,” Nel said on Tuesday.

He highlighted that the platinum mining industry continues to effect cost cutting measures to stay afloat in light of current suppressed commodity prices.

Analysts expect the commodity price environment to only start picking up by the end of next year as demand from China – the biggest consumer of commodities – cools off.

“The lower PGM prices experienced during the half year (to December) significantly impaired both Kroondal and Mimosa’s profitability.

"In order to ensure sustainability in this macro environment (US$ PGM prices fell to the lowest level in more than a decade) further cost saving initiatives were implemented at Kroondal, and specifically Mimosa, which management expects to result in unit costs reducing further going forward,” Nel added.

While platinum miners have continued to face turbulence, Sibanye Gold is seeking to capitalise on the cash starved pgm mining industry to buy properties as it has adopted a long term outlook for the platinum industry. This had seen it table an offer for Aquarius Platinum.

According to Aquarius, the deal now only awaits regulatory approval from the SA competition commission. “The only outstanding regulatory approvals required for the transaction to proceed are those of the South African Competition Commission and the Competition Tribunal,” it said.

Despite the cost control measures undertaken during the half year, EBITDA earnings for the group were $5m, compared to $18m in the previous quarter. As It resultantly posted a headline loss of $25m at 1.69 cents per share.

Combined production from the Kroondal and Mimosa mines for the period was however at a high of 352 107 PGM ounces. Production from Mimosa was 2% higher while costs were 2% lower although the mine had one fatality and four lost time injuries.


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