Aquarius Platinum , the world's fourth-largest primary platinum producer, posted better-than-expected underlying full-year profit, as higher output and metal prices outweighed rising costs, lifting the shares, according to Reuters. However including exceptional items, the company reported a net loss of $10.4 million after taking a $159.8 million impairment charge due to the suspension of the jointly owned Blue Ridge mine. "The writedown should not overshadow a good financial performance," said Liberum Capital. "It is worth 0.21 stg/share yet since it was first flagged on 1 June the shares have lost 1.24/share, therefore it is more than priced in." The shares were up 5.2 percent at 1039 GMT in London. The stock has lost a third of its value this year. "AQP is the second worst performing PGM stock in 2011. However given recent high quality M&A and management, we think the current share price is an excellent entry point for the medium term investor," Liberum said. Core profit (EBITDA) rose 40 percent to $203 million in the year to end June, on revenue up 45 percent to $683 million. The Blue Ridge mine, where Aquarius holds a 39 percent interest, has been closed for redevelopment since last August and development funding was halted this June as the rand price of Platinum Group Metals (PGMs) made the mine uneconomic. "A difficult year on all fronts, but the market may take in its stride as underlying earnings are OK with all the bad news already out," said Numis Corp. Aquarius has also temporarily halted operations at Marikana's 1 Shaft due to low rand PGM prices. Marikana is a 50:50 joint venture with Anglo Platinum (AMSJ.J). Aquarius said dollar PGM prices increased materially, but that this benefit was outweighed by the stronger rand. Its costs are mainly in rand while PGMs are priced in dollars. "Strengthening PGM prices and a briefly weaker rand in the first half of the year were cause for the optimism I spoke about at the half year results and which proved to be premature," said Chief Executive Stuart Murray. In common with its peers, Aquarius also faced higher costs of labour, electricity, steel and diesel. Its mine costs in South Africa increased 12 percent in rand terms, while cash costs in Zimbabwe grew 14 percent. ZIMBABWE Zimbabwe's President Robert Mugabe has given several large foreign-owned mining companies to the end of September to dispose of at least 51 percent of their shares to locals in a move that has worried foreign investors. Aquarius, which has a 50:50 joint venture with Impala Platinum in the country, said it submitted its plans for the Mimosa mine on May 9. "Discussions on this issue remain in progress," it said. Mimosa was the second-biggest contributor to full-year production, accounting for more than 20 percent of Aquarius's attributable output. Overall, group attributable production rose 15 percent to 487,404 PGM ounces for the full year.
