ANNUAL REPORT 2010 Aquarius Annual Report 2010 GEOLOGY OF THE PGM-BEARING ORE TABLE OF CONTENTS Aquarius Platinum Limited (Aquarius) has assets located on the Bushveld Complex in South Africa and Report profile 2 Operational management 104 on the Great Dyke in Zimbabwe, the two most renowned PGM-bearing deposits in the world. At year- Highlights 2010 3 Risk management and internal controls 108 end, Aquarius reported total attributable Mineral Resources (after application of geological losses) of Corporate profile 4 119.72 million ounces and Mineral Reserves of 8.99 million ounces. Material contracts 116 Year in summary 6 Annual financial statements 117 Operations at a glance 8 Directors’ report 118 Chairman’s letter 12 Corporate governance statement 126 CEO’s review 14 Key performance indicators 22 Statement of comprehensive income 134 South Africa Production by metal* Statement of financial position 135 UG2 Reef mined in the Case study: Platinum: 57% Redevelopment of Everest 24 Bushveld Complex, a Palladium: 32% Statement of changes in equity 136 tabular layered igneous Rhodium: 9% Market review 26 intrusion Statement of cash flows 138 Gold: 2% Case study: * Aquarius group mine weighted average Safety – a priority at Aquarius 30 Notes to the annual Mineral Resource and financial statements 139 Mineral Reserve Statement 32 Directors’ declaration 204 Resources and reserves – summary 42 Independent audit report 205 Kroondal 46 Additional shareholder information 206 Marikana 55 Everest 63 Glossary of terms 209 Blue Ridge 69 Forward-looking statement 210 Mimosa 75 Corporate directory IBC Zimbabwe By-products CTRP 82 The Main Sulphide Zone (MSZ) Significant by-products for both Platinum Mile 84 hosts the PGM-bearing ore in reefs mined – UG2 and MSZ – the Great Dyke are nickel, copper and chrome Exploration review 86 Corporate citizenship – summary 96 1 Aquarius Annual Report 2010 REPORT PROFILE HIGHLIGHTS 2010 Aquarius Platinum Limited’s 2010 Annual Reserves (SAMREC 2007) and its equivalent, the Report covers the period from 1 July 2009 to Australian Code for the Reporting of Mineral 30 June 2010. The report reviews the Resources and Ore Reserves (JORC 2004). This • Total attributable PGM production of 422,645 ounces, despite lack of Everest operational and financial performances of the statement has been signed off by the relevant group over this period, and has been compiled Competent Persons as defined by these codes. output for most of the year in line with the regulations of the Australian Securities Exchange (ASX), which hosts The corporate governance statement presented Aquarius’ primary stock exchange listing. in this report has been compiled in line with the • Higher PGM prices boost revenue by 52% to $472 million Australian Securities Exchange Corporate In this report, platinum group metal (PGM) Governance Council’s Principles of Good production, reported in ounces (oz), refers to the Corporate Governance and Best Practice • Cash on-hand rises strongly to $382 million three primary platinum group elements (PGE) – Recommendations, with reference to the platinum, palladium and rhodium – and gold, Combined Code on Corporate Governance which are together referred to as 4E or 3E+Au. 2008, as prepared by the Financial Reporting Financial data is reported in US dollars and, Council in the United Kingdom. The annual • Debt streamlined to reduce balance sheet liability and eliminate Rand exposure where applicable to South African subsidiaries in financial statements were prepared in the operational review, in South African Rands. accordance with the International Financial Historical information is provided for the financial Reporting Standards and audited in accordance • Good cost control contributes to rise in on-mine costs in South Africa of just years 2008 to 2010. with International Standards on Auditing. 8% in Rand terms Included in this report is the group Mineral A separate, more detailed report on Aquarius’ Resource and Reserve statement in which corporate citizenship activities, compiled in line Aquarius’ Mineral Resources, Mineral Reserves with the G3 reporting guidelines of the Global • Everest resumes production by year-end and exploration results for its operations in South Reporting Initiative (GRI), will be available on the Africa and Zimbabwe are reported in corporate website, www.aquariusplatinum.com, accordance with the South African Code for in November 2010. A summary of this report is • Dividend for year of 6 US cents per share (FY2009: nil) Reporting of Mineral Resources and Mineral presented in this annual report. Contribution to production Contribution to group revenue by operation – FY2010 by operation – FY2010* July 1995 Aquarius enters into an option agreement to acquire 100% of Gemex Exploration & Mining Company Limited, which is subsequently renamed Kroondal Platinum Mines Kroondal 48% Kroondal 49% Mimosa 24% Mimosa 27% Marikana 16% Marikana 17% Blue Ridge 7% Everest 2% Platinum Mile 2% Platinum Mile 2% Everest 2% Corporate 2% CTRP 1% CTRP 1% * Blue Ridge revenue capitalised due to its project status 2 3 Aquarius Annual Report 2010 CORPORATE PROFILE Aquarius’ listings around the globe* Aquarius is a focused platinum group metals Platinum Mile Resources (Pty) Limited, both of (PGM) producer, with operations on both the which recover PGMs from the tailings streams eastern and western limbs of South Africa’s of various platinum and chrome mining renowned PGM-bearing intrusion, the Bushveld operations on the western limb of the Complex, and on the Great Dyke in Zimbabwe. Bushveld Complex. Aquarius’ attributable PGM (4E) production in the 2010 financial year was 422,645 ounces. • In Zimbabwe: Aquarius’ interest in Mimosa, one of the lowest cost producers in the PGM industry, is • In South Africa: held through a 50% stake in Mimosa Aquarius’ assets, which are operated through LSE: AQP.L Investments Limited. Aquarius Platinum (South Africa) (Proprietary) Limited (AQPSA), are the Kroondal, Marikana Aquarius Platinum Ltd Aquarius also has an active exploration and Everest mines. With the acquisition of programme with a particular focus on the Ridge Mining plc early in FY2010, Aquarius eastern Bushveld Complex, as well as at and took over management of the Blue Ridge mine. around existing mines. Through Aquarius’ wholly-owned subsidiary, Aquarius’ shares are quoted on the Australian Aquarius Platinum (South Africa) (Corporate Securities Exchange (ASX), the main board of the ASX: AQP.AX Services) (Pty) Limited (ASACS), the group London Stock Exchange (LSE) and the JSE Limited Aquarius Listing location JSE: AQP. also holds a 50% interest in the Chromite (JSE). The company also has a sponsored Level Aquarius Platinum Platinum Operations (South Africa) Corporate Tailings Retreatment Plant (CTRP), and in 1 ADR program in the United States. (Pty) Ltd Services (Pty) Ltd Registered Office *Aquarius also has an ADR program on the NYSE Location of Aquarius’ operations in southern Africa July 1999 Aquarius successfully completes a scoping project for the Marikana ZIMBABWE Platinum Project and proceeds with a bankable feasibility study F A Everest E Platinum Mile G B Marikana F Mimosa C Kroondal G Blue Ridge A D CTRP B SOUTH AFRICA C D E 4 5 Aquarius Annual Report 2010 YEAR IN SUMMARY July 2009 2010June July 2009 February 2010 In line with its growth strategy, Aquarius acquires Mining resumes at Everest with reef being 100% of Ridge Mining plc, which comprises the stockpiled ahead of the recommissioning of Blue Ridge PGM mine (50%) and PGM the concentrator. exploration project, Sheba’s Ridge (39%). Managed contractor model, as in use at Work proceeds on the first phase of the Everest Kroondal and Marikana, applied to workforce at re-establishment project. Blue Ridge. August 2009 Aquarius finalises the Firstplats transaction which March 2010 results in the addition of 0.44 million PGM ounces to Kroondal’s P&SA1 reserves* and New tailings dams secured to supply additional 0.47 million PGM ounces to Marikana’s P&SA2 feed material to CTRP. reserves, effectively extending the operating lives of these operations. * Reserves quoted for Firstplats in this report differ from the ‘transaction’ reserves due to changes made to May 2010 the pillar design for the underground workings. First concentrate shipped from Everest, three months ahead of schedule, following the November 2009 suspension of operations in December 2008. Following the initial launch and successful completion of a US$250 million convertible bond offering, this offering was increased to US$300 million with the exercise in full of the June 2010 over-allotment option. Platinum price rises from a monthly average of Department of Mineral Resources (DMR) lifts US$1,167 per ounce in July 2009 to the Section 54 suspension notice at Everest in US$1,554 per ounce in June 2010 – an its entirety. increase of 33%. 6 7 Aquarius Annual Report 2010 OPERATIONS AT A GLANCE Group Kroondal Marikana Everest* Aquarius, a mid-tier PGM producer with Kroondal, which has been managed in a A second pool and share agreement Everest, which is wholly owned, exploits the assets in southern Africa, is the world’s fourth 50:50 pool and share agreement (P&SA1) (P&SA2) exists between Marikana and UG2 reef on the eastern limb of the Bushveld largest primary platinum producer. Aquarius with Anglo Platinum since 2003, is Aquarius’ Anglo Platinum (50:50). Following the Complex. Operations here resumed towards has five operating, highly mechanised, low largest PGM operation. The mine comprises Firstplats