2013 For personal use only

2013

ANNUALREPORT

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The annual financial statements have been prepared in accordance with the Financial Reporting Standards and audited in accordance with Australian Auditing Standards. The corporate governance statement has been compiled in line with the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles & Recommendations, the UK Corporate Governance Code and the South Africa King Code of Governance Principles (King III), collectively referred to as (the Recommendations).

This annual report contains a summary of the Mineral Resource and Mineral Reserve Technical Statement in which Aquarius’ mineral resources, mineral reserves and exploration results for its operations in South Africa and Zimbabwe are reported in accordance with the South African Code for Reporting of Mineral Resources and Mineral Reserves (SAMREC 2007) and its equivalent, the Australian Code for the Reporting of Mineral Resources and Ore Reserves (JORC 2004). This summary statement has been signed off by the relevant Competent Persons as defined by these codes.

A separate report on Aquarius’ sustainable development activities, compiled in line with the principles of the G3 reporting guidelines of the Global Reporting Initiative (GRI), is available on the corporate website, www.aquariusplatinum.com. A summary of that report is presented in this annual report.

Platinum group metals (PGMs) in this document refers to the three primary platinum group elements (PGE) – platinum, palladium and rhodium – and gold, which are together referred to as 3E+Au. Throughout this report, financial data is reported in US Dollars and in the operational review, where applicable to South African subsidiaries, in South African Rands.

Key performance indicatorsThe key performance indicators (KPIs) reported in this Annual Report cover health and safety, operations and financial metrics, and are used by the Board of Aquarius and operational management to monitor performance over time. They are reported here to provide all stakeholders with the tools necessary to assess the Company’s results on a consistent basis.

This Annual Report 2013 reviews the operational and financial performance of Aquarius Platinum Limited (Aquarius) for the 12 months from 1 July 2012 to 30 June 2013 (FY2013).

Scan this QR barcode with your smartphone or tablet to download the pdf of the Aquarius Platinum Annual Report 2013.

REPORT PROFILE

2013

ANNUALREPORT

www.aquariusplatinum.com

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cOnTEnTs

corporate profile 2

Highlights 3

chairman’s letter 4

chief Executive Officer’s review 6

Review of operations 10

Kroondal 10

Mimosa 12

Platinum Mile 14

Mineral resource and reserve statement – a summary 15

sustainable development – a summary 24

Risk management and internal controls 31

Executive management – south Africa and Zimbabwe 36

Directors’ report 37

Remuneration report 42

corporate governance statement 45

Annual financial statements 52

Directors’ declaration 99

Independent audit report 100

Additional shareholder information 101

Glossary of terms 103

Forward-looking statement 104

corporate directory

QUIcK REFEREncEsP4P10P24P52

Chairman’s letter

Review of operations

Sustainable development

Annual financial statements

1AquArius plAtinum limited AnnuAl report 2013

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cORPORATE PROFILE

Aquarius Platinum Limited (Aquarius), a focused, independent platinum group metals (PGM) producer, has assets on two world-renowned PGM-bearing deposits – the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe.

SOUTH AFRICA

ZIMBABWE

Blue Ridge

Mimosa

Everest

Marikana

Kroondal

CTRP

Platinum Mile

“Aquarius has transformed itself into a leaner, more focused business, intent on maintaining the positive momentum into the future“

Currently, Aquarius has two mechanised, low-cost operating mines:

• Kroondal, on the western limb of the Bushveld Complex in South Africa, which is Aquarius’ primary asset. It is operated through AQPSA and is managed in a 50:50 PSA with Anglo American Platinum (Amplats).

• Mimosa, on the southern portion of the Great Dyke in Zimbabwe, which is one of the lowest-cost producers in the PGM sector. Mimosa is held through a 50% stake in Mimosa Investments Limited, with the balance being held by Impala Platinum Holdings Limited (Implats).

Aquarius also has an interest in an operating retreatment facility:

• Platinum Mile, in which Aquarius holds a 91.7% stake through wholly-owned subsidiary, ASACS. Platinum Mile operates a retreatment facility on Amplats’ Rustenburg Platinum’s lease area and recovers PGMs from the tailings streams of various platinum and chrome mining operations on the western limb of the Bushveld Complex.

Operations at the Everest, Marikana and Blue Ridge mines and at CTRP were suspended and these entities are currently on care and maintenance. Everest is wholly owned and Aquarius has 50% stakes in each of the other assets. The Blue Ridge mine has been on care and maintenance since July 2011.

The primary metals produced by Aquarius are platinum, palladium, rhodium and gold. Iridium and ruthenium are produced as co-products with nickel, copper and chrome produced as significant by-product metals.

Aquarius has an active exploration programme in South Africa. Although conducted at and around most operations, the major focus is on the eastern limb of the Bushveld Complex. Greenfield exploration is currently undertaken at Zondernaam, while brownfield exploration is being carried out at Hoogland and Vygenhoek.

Aquarius has its primary listing on the Australian Securities Exchange (ASX), and is also listed on the main boards of the London and Johannesburg stock exchanges. The company has a sponsored Level 1 American depositary receipt (ADR) in the United States. There were 486.85 million shares on issue at 30 June 2013. The geographic distribution of shareholders was as follows:

Geographic distribution of shareholders• South Africa 31.56%• North America 25.51%• Australia 13.33%• United Kingdom 21.43%• Europe (excl UK) 5.16%• Asia 2.37%• Rest of the world 0.64%

Source: Nasdaq OMX

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financial

Mine EBITDA increased by 145% to $70 million (FY2012: $29 million) • Revenue decreased by 24% to $371

million (FY2012: $486 million)

• Headline loss (before exceptional charges) of $61 million (FY2012: headline loss $154 million)

• Reported net loss of $288 million (61.13 cents loss per share) after impairment losses of $226 million

• Group cash balance of $103 million at financial year end

• No dividend declared

strategic

• Implementation of revised support system at Kroondal completed

• Move to owner operator model at Kroondal completed

Focus on turnaround at Kroondal yields improved operating results – Kroondal EBITDA up 12 fold compared to previous year • Kroondal mine life increased to 9.5

years following agreement with PSA1 partner, Amplats.

• All unprofitable operations on care and maintenance for the duration of the current downturn

operational

Group attributable production, excluding operations on care and maintenance, increased by 13% to 325,103 PGM ounces • US Dollar PGM price weakened by 6%,

offset in South Africa by weaker Rand-US Dollar exchange rate

• Average Rand basket price up 7% year-on-year at just over R10,940 per PGM ounce due to Rand weakness.

• Weighted average on-mine unit cash costs in South Africa decreased by 15% in Rand terms

HIGHLIGHTs

Contribution to production by operation• Kroondal 63%• Mimosa 33%• Platinum Mile 4%

Production by metal• Platinum 56%• Palladium 34%• Rhodium 8%• Gold 2%


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If 2012 was an annus horribilis, 2013 has been a year when we have been happy to see matters improve. Patience and an attention to detail are being rewarded.

Under the direction of Jean Nel, who was promoted to Chief Executive Officer in November 2012, the many technical, labour and legislative challenges have been handled quietly and competently.

The restructuring that has been affected has placed your company in a better position to move forward. Our ongoing operations are at the lower end of the industry cost curve, cash flow is positive and our safety record has improved.

I have to report the unfortunate death of Mr Raohang Ramakhetha. Mr Ramakhetha, a rock drill operator employed by a contractor, died on 25 March in a fall of ground at Kroondal. I join his colleagues in mourning his death and in sending sincere condolences to his family and friends.

The economic problems which have affected the global economy since 2008 have somewhat ameliorated but are still with us. Our future depends on how we react to them.

The price of platinum has moved from $1,426/oz at 1 July 2012 to hit a high of $1,738/oz in February, a low of $1,308 in June and at the end of the financial year was $1,336/oz. Since June it has traded between $1,533 and $1,308. Other metals which we produce have been similarly volatile.

As I write, there has been no significant increase in demand but supply has been restricted by mines being put on care and maintenance, production cuts and delays in capital spend on capacity increases. The activities of Aquarius in these respects are fully described in the Chief Executive Officer’s Review.

Production costs in Southern Africa continue to be adversely affected. Electricity, diesel and steel costs continue to escalate ahead of in-country inflation rates. Our highest cost item, wages, has continued to rise at rates well ahead of inflation. Organised labour seems to be unconcerned about the obvious consequences of this unsustainable trend. We have avoided most of the widely reported strike action in the industry in South Africa by concentrating effort on improving relations with the work force and their representatives and increasing efficiencies.

The operations team at Kroondal, led by Rob Schroder and Wessel Phumo, has made great progress in improving production with the effective implementation of the move from contractor to owner operator. This has been combined with the introduction of a revised support system in the mine. The resuIts of this are dealt with later In this document.

Relations with our host-country governments continue to be handled albeit in an atmosphere of some legislative uncertainty.

In Zimbabwe, we continue to engage with the government in relation to its indigenisation legislation. On 14 December 2012, Mimosa Investment Holdings Limited, a 50:50 partnership with Impala Platinum Holdings Limited, concluded a non-binding term sheet in respect of a proposed indigenisation plan with the Government of Zimbabwe. Included is the requirement for definitive agreement to be concluded between the parties. At the time of writing, definitive agreement had not been reached and an extension of time has been requested. Consequently, management is unable to estimate the financial effect of any transaction which might be concluded.

In South Africa, we demonstrated our commitment to the black economic empowerment (BEE) and regulatory framework by providing a limited guarantee and pledge to assist in preserving

cHAIRMAn’s LETTER

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the BEE credentials of Aquarius. Your Board considers that it is in the interests of Aquarius to remain compliant with BEE regulation by assisting our BEE partners to preserve their remaining shareholding in Aquarius. We continue to develop our relations with the regulators.

I am acutely aware that it is a long time since Aquarius was in the dividend lists. It would not be prudent to consider payment of a cash dividend in the near future. We are working hard to reduce costs, increase the profitability of our operational resources and strengthen our financial condition. Restrictions of production within the industry will assist price performance but increases in prices will make it more attractive for production to be increased and closed facilities reopened.

For prosperity to return to the industry a significant increase in uses for platinum is necessary. There are signs that technological advances are likely to bring this about but when and to what extent is anybody’s guess. Meanwhile we hope that economic recovery in Europe may be helpful. Nevertheless, we are conscious of our obligations to create real value for our shareholders and recognise that when it becomes prudent to do so we will declare dividends.

I would like to thank management and all employees who have striven to considerable effect to develop Aquarius during a period fraught with difficulties and to congratulate them for what has been achieved. It is clear that the operational performance of Aquarius has greatly improved during the year. This is a tribute to Jean Nel and to Rob Schroder at Kroondal, to Winston Chitando at Mimosa, and to all the work force whose loyalty is greatly valued. Your directors recognise the challenges which the whole of the platinum industry presently faces – in particular, cost management, supply discipline and the still subdued state of many of the world’s economies. We will continue to remain focused on maintaining and improving operational stability and to preserve our funding to ensure

that Aquarius remains well positioned to respond to any increase in PGM prices.

I also express my appreciation to two directors who retired during the year. To Sir William Purves who retired as Senior Non-executive Director whose wise advice in all circumstances will be much missed. I wish him the happiest of retirements. To Stuart Murray who resigned after ten testing years with Aquarius as Chief Executive Officer. I appreciate his efforts and hope that he enjoys a successful and enjoyable future.

I welcome to the board Ms Sonja de Bruyn Sebotsa, who joined us as a Non-executive Director and has subsequently been appointed Chairman of our principal subsidiary, Aquarius Platinum (South Africa) Pty Ltd.

And finally my thanks to you, the shareholders, without whom none of this would have been possible.

Nicholas SibleyChairman27 September 2013


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In this my first review as CEO of Aquarius Platinum, I report on a year which was probably the most challenging and tumultuous in the company’s existence. I am pleased to note that Aquarius survived the upheavals of the 2013 financial year and has begun to show positive momentum. The company is now better positioned than it was in July 2012.

The past financial year was essentially one of two halves: in the first, we had to contend with violent labour unrest, initially at our Kroondal operation and then in the sector at large; the suspension of operations at the unprofitable high-cost mines Everest and Marikana; the restructuring of those mines which remain in operation, Kroondal and Mimosa, to boost their efficiency; implementation of the revised hanging wall support system and the transition from contractor to owner mining at Kroondal. In the second half of the year, we began to see the results of our concentrated focus on consolidation and the restoration of operational credibility. The outflow of cash was reversed as production began to increase and the three operating entities – Kroondal, Mimosa and Plat Mile – were repositioned at the lower end of the cost curve. In addition, we had to contend with regulatory uncertainty in both our operating jurisdictions in an environment in which PGM prices continued to materially underperform consensus forecasts.

In all, the past year could be described as the most difficult in the company’s history but we have emerged having learnt much and as a more focused, leaner business.

marKet oVerVieWWhile PGM market fundamentals remained subdued, metal prices continued to be volatile in the past year.

The platinum price fluctuated from a low of $1,385/oz in July 2012 to a high of $1,741/oz in February 2013 to touch another low of $1,315/oz in June 2013, a level not seen since 2009. On the supply side, the production cuts envisaged by the market took much longer to materialise than expected.

The uncertain economic outlook in the United States, Europe and even more recently China, and the resultant lack of growth in automobile

sales dampened demand. A sharp fall in investment demand led to a slump in the platinum price in the three months to June 2013, to levels below that of gold for the first time since September 2011. More encouragingly, jewellery demand has responded positively to the lower prices and autocatalyst demand is being underpinned by the introduction of yet stricter emission standards in Europe.

In contrast, the palladium sector has performed strongly with the price rising from an average of $581/oz in July 2012 to $715/oz in June 2013. Palladium demand is being boosted by increased demand for gasoline vehicles in developing countries.

operational performanceGiven the suspension of operations at Everest and Marikana, total attributable group production of 325,103 PGM ounces was 21% down year-on-year. A comparison of production by continuing operations gives an overall increase of 13% – 21% up at Kroondal and 3% at Mimosa.

At Kroondal, major features of the year were the transition from contractor to owner mining and the implementation of the revised hanging wall support regime referred to in the 2012 annual report. This involved optimising the mining direction and the installation of hybrid hanging wall support.

The decision to end contractor mining at AQPSA and to opt instead for owner mining was based on the imperative to have greater control of our operations. The advantages of using a general contractor to undertake our mining function had diminished in recent years and it had become increasingly apparent that it would be beneficial to undertake and manage this function internally and to outsource specialist, niche work to contractors. The conversion to owner mining, which began in July 2012 and involved changes at many levels, was completed in December 2012, on time and below budget.

This change has proved to be successful. The transition to owner mining involved the direct employment of approximately 5,000 people – formerly either contractor employees or employees transferred from Marikana following the suspension of operations there – and the implementation of our own systems for the management of safety, maintenance and procurement, among others. Notwithstanding these changes, production and safety improved.

The concomitant management and production changes led to a spirit of revitalisation among employees and a new-found trust in management, enhanced job security and a more stable management team. As an initial step, much effort was put into communication with key stakeholders which resulted in greatly improved relationships with employees and the various labour unions. This strengthened communication process is now a feature of our operating processes.

Compounding this industrial relations challenge was the fallout from the strike at Kroondal’s Kwezi shaft in July 2012, as reported in the 2012 annual report. This involved restoring trust and maintaining co-operative relations between management and employees while all around our operation chaos and mayhem reigned. The particular

cHIEF ExEcUTIvE OFFIcER’s REvIEW

PGM basket price – US Dollars and Rands

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2012 2013Jul JulAug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

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challenge successfully managed was to promote the concept of team work and unity, which was an entirely new way of thinking and working.

The improved communication process played a vital part in the wage negotiations which began in February 2013. Management and union representatives identified and agreed to amendments to the collective bargaining process before the Aquarius wage negotiations began. This, together with the commitment of vital personnel, resulted in more equitable, speedier and less acrimonious negotiations which were successfully concluded. In terms of the agreement signed with the unions an increase of slightly more than the prevailing rate of inflation was agreed. Management has undertaken to deliver on and do what it says it will, thus promoting a relationship with employees and the unions based on honesty and trust.

The 21% increase in production at Kroondal contributed to a dilution of fixed costs and thus reduced unit costs for the year.

At Mimosa, production continued to exceed design capacity. The major challenge, however, was to contain costs, which had escalated late in the first half of the 2013 financial year, while maintaining operational efficiencies. The escalation in costs in the first half of the year was partially reversed in the second half as the mine again reported record production. More work remains to be done, however, to achieve greater control of unit costs.

Limited progress has been made since the signing of the Memorandum of Understanding (MoU) with the Government of Zimbabwe in December 2012 regarding the indigenisation implementation plan, the salient features for which were spelt out in the MoU. Both Aquarius and Mimosa will continue to engage with the Government of Zimbabwe in an effort to finalise the terms of this plan expeditiously. Discussions covering the draft minerals policy continue at the Zimbabwean Chamber of Mines level.

Revenue generated by Mimosa declined by 7%, in line with the drop in the average basket price received which fell from $1,277/PGM ounce to $1,206/PGM ounce, a decrease of almost 6%.

Mimosa’s average cash cost per PGM ounce for the year was $867. The 13% increase in costs was driven by inflationary increases in the cost of labour, steel, diesel, surface lease fees, certain once-off expenses including an inventory write-off, and the cost of rebuilding the stockpile which had been depleted following the fire in May 2012.

The retreatment facility, Platinum Mile, was affected by the strike at Amplats’ Rustenburg Platinum Mine which supplies the feedstock to be treated at this facility. While the amount of material processed declined by 28%, revenue was 18% higher and the cash margin improved to 25% from 13% the previous year.

financial performance Thanks to a depreciation in the value of the Rand versus the US Dollar, especially in the second half of the financial year, the average Rand basket price received by the South African entities rose by 6% to R10,937/PGM ounce. This contributed to increases in revenue at Kroondal and Plat Mile of 20% and 11% respectively. The price received compared with a Rand cash cost of R8,343/PGM ounce at Kroondal and R6,606/PGM ounce at Plat Mile.

For Mimosa, in Dollar terms, the basket price received declined by 6% to $1,206/PGM ounce as compared with cash costs of $867/PGM ounce, which were 13% higher. The increase in production was insufficient to negate these factors and revenue was 7% lower.

Overall at Group level, Aquarius reported a consolidated loss of $288 million (61.13 cents per share) for FY2013, following an impairment charge of $226 million.

On-mine EBITDA was $70 million, an increase of 145% on the previous year. Again, the year’s financial results represent two contrasting halves. In the first six months EBITDA totalled $22 million despite the significant challenges encountered – the closure of Marikana and Everest and, at Kroondal, the transition to owner operated mining and implementation of the revised support system – which required not only management time but also consumed cash. This resulted in a net operating cash outflow for the half year to

Headline earnings, profit and production comparison: FY2012 – 2013

FY2013 FY2012 MovementFinancialsHeadline loss $m (61) (154) 93EBITDA $m 70 29 41Foreign exchange loss $m (19) (95) 76Net loss after tax, before impairment $m (62) (154) 92Impairment $m (226) (4) (222)Net loss after impairment and tax $m (288) (158) (130)PGM production (oz)Mines in operation oz 325,103 287,035 38,068Mines on care and maintenance oz – 124,363 (124,363)Total oz 325,103 411,398 (86,295)


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cHIEF ExEcUTIvE OFFIcER’s REvIEW CONTINUED

December 2012 of $38 million. In contrast, in the second half of the financial year the gains achieved in the first half were consolidated. In the second half of the year, EBITDA was $48 million, 125% up on the previous six months, a function of higher production levels, increased prices and lower operating costs, among other things. Net operating cash inflow for the second six months was $60 million, a turnaround of $98 million on the first six months of the year.

The suspension of operations at the high-cost entities (Marikana, Everest and CTRP), improved operating performance and increased efficiencies resulting primarily from the successful implementation of the revised support system and the change to owner mining at Kroondal, had a beneficial impact on revenue, cost of sales and gross profit.

• Revenue (including PGM sales and interest earned) for the year was $371 million, down 24% from $486 million in FY2012. The decline in revenue was a result of a 86,295-ounce decline in group attributable PGM production. On a PGM ounce basis, revenue decreased to $1,230 per PGM ounce from $1,310 per PGM ounce in FY2012.

• Total cash cost of sales of $307 million was $158 million lower due to the decline in Group production. On a per PGM ounce basis, this represented a 19% decrease in Dollar terms (and 15% in Rand terms), a consequence of the closure of high-cost mines and increased efficiencies at Kroondal.

• Gross profit of $13 million was reported in FY2013 compared with a gross loss of $45 million in FY2012, a turnaround of $58 million.

• Average unit cash costs declined significantly year-on-year. In Dollar terms, average unit cash costs fell 19% to $912 per 4E ounce. The average cash cost per PGM ounce at the South African operations decreased by 15% to R8,242, equivalent to $936 per PGM ounce at the average Rand exchange rate for the year. The decrease in US dollar terms was 25%, as a result of a weaker Rand relative to the Dollar during the year.

Exchange rate movements continued to have a volatile effect on earnings. The Rand weakened significantly over the 2013 financial year, starting the year at R8.24 to the US Dollar and ending it at R10.00, a decline of 21%. The weakness in the Rand can be attributed in part to Federal Reserve Chairman, Ben Bernanke’s proposal to taper off quantitative easing in the United States. This resulted in an outflow of capital from emerging markets, including South Africa, with investors looking to the United States rather as an investment destination. Also playing a role in the weakness of the Rand were structural problems in the South African economy and labour issues in the mining sector, which contributed to negative

investor sentiment. The Rand averaged R8.80 to the Dollar during the year. This was 14% weaker than the average of R7.74/$ recorded in FY2012.

Aquarius recorded net foreign exchange losses of $19 million in FY2013. This comprised gains of $15 million on sales adjustments at the EBITDA level, offset by a foreign exchange loss of $24 million arising from the closure of a currency contract taken out to fix the exchange rate covering the potential R1.2 billion purchase of Booysendal, and an additional foreign exchange loss of $10 million on pipeline advances.

Net operating cash flows generated by the Group’s mining operations amounted to $22 million for the year. Other cash flows included $54 million for mine development, a $15 million refund of the deposit paid on the Booysendal acquisition, $14 million interest paid, a $24 million foreign exchange loss on currency contract and a $10 million repayment of borrowings. The Group’s cash balance at 30 June 2013 was $103 million, $77 million less than on 30 June 2012 but significantly more than the cash balance of $83 million at 31 December 2012.

At 30 June 2013, Group interest-bearing debt (excluding pipeline advances) of $302 million comprised principally $268 million of convertible notes.

IMPAIRMeNTFollowing a review of the carrying value of the Group’s mining assets, a total impairment of $226 million was charged to the income statement. This impairment included $86 million related to the Everest mine, $84 million to Afarak, $19 million to Marikana and another $37 million on Plat Mile, Blue Ridge and other mineral rights.

safety, HealtH and enVironmentSafety is a priority at Aquarius and, while there have been improvements in safety performance, it is with regret that we report one fatality during the year. Mr Raohang Ramakhetha, a rock drill operator employed by a contractor, was fatally injured in a fall of ground in March 2013 during drilling operations at Kroondal. We extend our condolences to the family, friends and colleagues of Mr Ramakhetha. There were no fatalities at Mimosa which reported just two lost-time injuries for the year.

Aquarius acknowledges that its operations, like all mining operations, have an impact on the natural environment. We do all that we can to meet and exceed environmental legislative requirements through responsible and progressive approaches to environmental management, impact mitigation and rehabilitation. We monitor closely our carbon emissions and water and energy usage, and this year we again submitted responses to the Carbon Disclosure Project (CDP) and the Water Disclosure Project (WDP).

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Our corporate social investment programmes continued in 2013 as did our training and development programmes. We continue to work towards complying with the spirit of the Mining Charter and meeting the targets set. Additional information on our sustainability performance is available in our Sustainable Development Report 2013 which is available on our website, www.aquariusplatinum.com.

corporate mattersISSue oF ShAReS To SuPPoRT Bee PARTNeRSOn 4 October 2012, Aquarius provided a limited guarantee and pledge to help preserve its black economic empowerment (BEE) credentials. This limited guarantee and pledge were released in January 2013. Following the decrease in the Aquarius share price during the second half of the financial year, Aquarius agreed to reinstate the limited guarantee and pledge provided to the BEE partners’ financiers for 10.2 million shares on identical terms and conditions. In line with its ongoing commitment to comply with BEE and the regulatory framework in South Africa, the Aquarius Board believes it is in the company’s interests to assist its BEE partners to preserve their remaining shareholding in Aquarius and comply with the South African Mining Charter.

BooySeNdAl SAle oF RIGhTS AGReeMeNT lAPSeSThe sale agreement concerning the rights at Booysendal South entered into with Northam Platinum Limited and its subsidiaries lapsed on 30 April 2013 since the condition precedent that Section 102 approval be granted by the Department of Mineral Resources prior to the close of business on 30 April 2013 was not fulfilled. The $15 million held in an escrow account in terms of this transaction has been returned to Aquarius.

exTeNSIoN oF The KRooNdAl PSAThe Kroondal PSA between AQPSA and Amplats has been expanded and potentially increases its life of mine to close on 10 years. In terms of the latest agreement, Amplats will contribute 15.97Mt of ore reserves located immediately down-dip of Kroondal’s underground mining infrastructure and treatment plants. In exchange for these reserves, Kroondal will mine and process these reserves and continue to manage the PSA in terms of the original PSA agreement with Kroondal. Similarly, AQPSA’s share of the concentrate produced from the additional reserves will be sold to Amplats in accordance with the existing off-take agreement.

KRooNdAl wAGe AGReeMeNTSAQPSA concluded one-year wage agreements with the National Union of Mineworkers (NUM) and Solidarity on behalf of their members who are employed at Kroondal. Both agreements, which were effective from 1 July 2013, granted average increases slightly exceeding the increase in the cost of living as measured by the inflation rate. The successful conclusion of these wage agreements

was significant, particularly given the current difficult labour environment in the South African platinum sector. I am extremely proud of our employees who showed leadership and maturity and maintained production throughout the wage negotiation process and acknowledge the critical contribution employees have made to safety and operational improvements.

in conclUsionI would like to extend my thanks to the Board, management and all Aquarius employees for the dedication and support shown during this very difficult year. While we have accomplished much, the environment in which we are operating remains challenging and complex across most disciplines.

Ensuring a sustainable future in which all interested parties are able to benefit from the value created by Aquarius will require improved understanding and communication across the spectrum, ranging from employees, regulators and organised labour to management and host governments. The platinum sector plays too important a part in the economy of southern Africa to have its sustainability jeopardised. Much remains to be done to ensure and improve the future of our company and that of the platinum sector.

Finally, my thanks go to our shareholders for their continued support of the Company and the strategy we have embarked upon in the past year.

Jean NelChief Executive Officer27 September 2013


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The Kroondal Platinum Mine (Kroondal), Aquarius’ largest mine, is located on the western limb of the Bushveld Complex, not far from Rustenburg, in North West Province, South Africa and is located up-dip of Amplats’ Rustenburg Platinum Mines (RPM).

Kroondal mines the UG2 reef in the Kroondal and Townlands ore bodies, via four operating decline sections – Kopaneng, Simunye, Bambanani and Kwezi. Two concentrator plants (K1 and K2) with a combined monthly processing capacity of 570,000t, process the ore mined. A fifth decline shaft, K6, is currently in development and has begun ramping up production. Kroondal is managed in 50:50 pool and share agreements (PSA) with Anglo Platinum.

safetyAlthough Kroondal achieved two million fatality-free shifts, there was regrettably one fatality at Kroondal’s Kwezi shaft, where as a result of a fall of ground, Mr. Raohang Ramakhetha, employed by Precrete, was fatally injured in March 2013. At year-end, three business units had recorded more than one million fatality-free shifts each, with the Bambanani shaft having recorded more than three

million fatality-free shifts. The overall disability injury incidence rate (DIIR) per 200,000 hours worked was 1.14, an improvement on the 1.20 recorded in FY2012.

Along with the improved safety performance in 2013, there was also a decline in the number of section 54s received, from 18 in FY2012 to 11 in FY2013. This decline was a result of certain improvements in systems, more vigorous interaction with the Department of Mineral Resources (DMR) and an improvement in employee adherence to safety standards and procedures.

There were in addition six official safety inspections at Kroondal following which operations were not curtailed in terms of section 54s. Nevertheless, management remains keenly aware of the need to be vigilant regarding employee safety and is investigating improved safety management systems and performance.

REvIEW OF OPERATIOnsKrOONDal

Kroondal – Key statistics

FY2013 FY2012 FY2011 FY2010

operational – total Tonnes milled Mt 6.59 5.61 6.24 6.18Average head grade g/t 2.41 2.38 2.59 2.59Recoveries % 79 78 80 79Cost per PGM (1) ounce produced $/oz 948 1,130 892 761

R/oz 8,343 8,748 6,273 5,769Price received per PGM (1) ounce $/oz 1,243 1,322 1,454 1,227

R/oz 10,937 10,236 10,222 9,301R/$ exchange rate R/$ 8.80 7.74 7.03 7.58Total no. of employees (including contractors) 8,065 5,371 4,864 4,530Total production – in concentrate Platinum oz 238,214 197,360 243,991 240,441Palladium oz 122,349 99,766 123,604 121,572Rhodium oz 43,879 36,112 45,369 44,533Gold oz 2,055 1,613 1,982 2,024Total PGM production oz 406,497 334,850 414,946 408,570Total PGM production (5PGM+Au) oz 495,040 408,449 507,646 499,400Attributable PGM production oz 203,249 167,425 207,473 204,285Financials – attributableRevenue (2) $m 217 180 268 230On-mine cash cost $m 193 189 186 156Gross profit/(loss) $m (8) (32) 58 54Capital expenditure $m 31 32 29 13

(1) 3PGM+Au(2) Net of foreign exchange sales variance

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operational performanceWith the focus on optimising production at Kroondal, volumes mined and processed of 6.59Mt were at record levels. This was an increase of 17% on the previous year and together with marginal improvements in head grade and recoveries resulted in a 21% increase in PGM ounces produced.

These improvements were belied by the start of the financial year when there was some industrial action at Kwezi shaft, a result of the labour unrest being experienced in the area and operations were interrupted intermittently for approximately three months. Following this a concerted effort was made to improve industrial relations and engage and communicate sincerely with employees and various stakeholders.

Major operational milestones achieved at Kroondal were the successful conversion to owner operation and implementation of the revised hangingwall system. The change to owner mining, accomplished on time and on budget, was received positively by employees and helped contribute to improved industrial relations at the mine, particularly when the mines in the greater Rustenburg area experienced some of the worst labour unrest.

Implementation of the revised hangingwall support system was finalised at all shafts, with the exception of Bambanani where this will be completed during FY2014, once the necessary equipment has been delivered.

Good progress was made with the ramp up at K6 which helped to contribute to volumes mined. Decline and on-reef development continued. Raise boring of the first ventilation shaft was completed and its equipping had begun prior to year-end. Excellent progress was made with development and associated infrastructure, enabling mining at the first stoping section to begin three months ahead of schedule. The production ramp-up at the K6 shaft is proceeding apace with a target of steady state production of 160,000t scheduled for December 2015.

Just before year end, one-year wage agreements were concluded in terms of which employees agreed to increases that slightly exceed inflation. This was successfully achieved without a single production shift being lost.

Kroondal is now successfully producing at full capacity and a stockpile is in place for the first time in many years. The focus in FY2014 and onwards will be on incremental improvements in unit costs, the production of quality ounces and significantly improved safety.

The PSA agreement with Amplats was recently extended to give Kroondal an additional three years of mine life. In terms of this agreement, Amplats will contribute ore reserves (proved and probable) totalling 15.97Mt at an average grade of 2.42g/t. These reserves are located immediately down-dip of Kroondal’s

current operations and will be mined from existing underground mining infrastructure and treated at its plant. AQPSA will in turn manage the PSA and sell its share of the concentrate produced from the additional reserves to Amplats, in line with existing terms and conditions and off-take agreement. A variable royalty determined on a per ton mined basis will also be payable to Amplats.

Total stay-in-business capital expenditure of R400 million ($45 million) was primarily on ongoing infrastructure development, continued development of the K6 shaft and the replacement of mobile equipment. The K6 shaft accounted for approximately R172 million. An additional R88 million will be spent on the K6 shaft in FY2014.

financial performanceGiven the increase in production and higher Rand PGM basket price received, Kroondal’s revenue was 39% higher at R3.8 billion, Mining cash costs fell by 2% to R513/t, making Kroondal one of the most efficient mechanised mines in the country. Costs per PGM ounce produced were 5% lower. The cash margin for the year improved to 12% from -6% the previous year.

oPeRATIoNS oN CARe ANd MAINTeNANCeGiven the on-going poor economic environment, a result of the subdued PGM basket price, the Marikana, Everest and Blue Ridge mining operations and CTRP continue on care and maintenance. The aim of these care and maintenance programmes is to preserve the company’s assets so as to minimise the cost of restarting operations once market fundamentals so indicate and the resumption of operations has been approved by the Board.

Each of these operations is currently being overseen by a core team with the skills necessary to maintain equipment and plant. The care and maintenance programmes include, among other things, ensuring adherence to DMR prescriptions and environmental compliance; maintaining a high level of safety; the dewatering of mines; and ensuring the mills, flotation cells and pumping circuits remain in working order.


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safety There were no fatalities at Mimosa during the 2013 financial year and the mine had achieved more than 3 million fatality-free shifts by year end. The incidence of lost-time injuries for the year declined with just two being recorded in FY2013.

The DIIR improved to 0.05 per 200,000 hours worked from 0.24 in FY2012. Of concern is the frequency of near misses and minor injuries, which are monitored as a matter of course. The identification of the reasons for what are termed

near misses and minor injuries and how to prevent these is being incorporated into the safety strategy and managerial responsibilities at Mimosa.

A strategic safety session attended by management is held annually to address safety issues. This session provides useful insight into and highlights various issues regarding safety in and around the mine. Mimosa has in place the necessary safety, health and environmental (SHE) systems, policies and procedures, and the focus is on employee behaviour in terms of safety.

REvIEW OF OPERATIOns CONTINUED

MIMOsa

The Mimosa mine, the lowest cost producer in the Aquarius’ stable, is located in the Wedza sub-chamber of the southern portion of the Great Dyke in Zimbabwe, 150km from Bulawayo and 32km from the town of Zvishavane. Mimosa is a relatively shallow underground operation accessed via a decline shaft. A surface concentrator has a monthly capacity of 185,000t. Mimosa is owned by Aquarius and Implats in a 50:50 joint venture.

Mimosa – Key statistics

FY2013 FY2012 FY2011 FY2010

operational – totalTonnes milled Mt 2.41 2.26 2.38 2.28Average head grade g/t 3.66 3.65 3.63 3.59Recoveries % 78 77 77 76Cost per PGM (1) ounce produced $/oz 867 769 695 610Price received per PGM (1) ounce $/oz 1,206 1,277 1,280 993Total no. of employees (including contractors) 1,682 1,772 1,796 1,802Total production – in concentrate Platinum oz 109,234 105,950 104,915 101,241Palladium oz 84,953 82,321 80,247 76,603Rhodium oz 8,849 8,476 8,391 8,708Gold oz 14,836 14,149 14,282 13,702Total PGM production oz 217,872 210,985 208,016 199,625Total PGM production (5PGM+Au) oz 230,626 222,810 219,666 210,318Attributable PGM production oz 108,936 105,448 104,008 99,812Financials – attributableRevenue (2) $m 133 143 170 126On-mine cash cost $m 96 80 74 62Gross profit $m 25 52 87 59Capital expenditure $m 18 31 24 18


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operations Annual production at Mimosa again exceeded design capacity. Volumes milled were up 7% while the grade mined and recoveries remained relatively steady. PGM production rose by 3% over the year, largely as a result of on-going process stabilisation, optimisation and cost reduction initiatives currently being pursued at the mine.

Continuous improvement is integral to the operating culture at Mimosa. Informal work clusters across the mine, comprising employees involved in a particular work function, examine individual processes to identify both factors that might inhibit performance and ways of enhancing refining capabilities so as to improve output. The suggestions made by these cluster work groups are investigated and, if valid with potential benefits, they are implemented.

Operationally, the major challenge was the deteriorating ground conditions in the mine. This has necessitated the adoption of alternative ground support mechanisms to ensure the safety of employees and maintain production. This additional support has however resulted in increased costs. Other factors that have aggravated costs are:

• A 7% salary increase awarded in January 2013 in order to match industry standards.

• Increased consumption of chemicals and reagents owing to variable quality.

• The costs associated with establishing a team to rebuild the stockpile after the fire incident in May 2012. Following the fire, production was temporarily halted at those sections of the mine affected by the fire as they underwent repairs. As a result the stockpile was depleted by the plant. The stockpile was re-established by January 2013 and the team was disbanded.

• A significant rise in ground rental charges.

Cost containment remains an area of focus. Various initiatives such as the labour optimisation exercise, mobile equipment fleet rationalisation and productivity improvement initiatives are being pursued to ensure that costs are maintained within budget.

financial performanceAttributable gross revenue decreased by 7% to $133 million for FY2013, a function of the lower Dollar PGM basket price achieved. Costs per PGM ounce produced, which increased by 13%, were the greatest challenge of the past financial year. The focus on cost containment continues through the various initiatives highlighted above. The cash margin declined from 46% the previous year to 26% in FY2013.

indigenisationA non-binding term sheet regarding the planned indigenisation of Mimosa was signed on 14 December 2012. The term sheet set out the key details of the plan and paved the way for the drafting of detailed agreements that would facilitate the implementation of the plan. There is still some uncertainty on the matter and no further progress has been made. Management will continue with discussions on the way forward, soon after a new cabinet has been appointed in Zimbabwe.

taxationThe proposed new Income Tax Bill was gazetted in November 2012. The bill was presented to Parliament for first reading in May 2013 and, following amendments from all relevant stakeholders, the bill passed the second and third reading in Parliament on 25 June 2013. It now awaits sign off by the President to become law. Once signed by the President, the new bill is expected to be effective from 1 January 2014.

The income tax rate has remained at 25% of taxable income and the withholding tax on technical fees and dividends at 15% and 10% respectively.


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safetyAs in previous years, there were no fatalities at Platinum Mile and the DIIR was zero for FY2013.

operating performance Since Platinum Mile relies on Anglo Platinum for its feed stock, operational disruptions at Anglo Platinum as a result of the labour unrest in the second half of calendar 2012 negatively affected operations at Platinum Mile. Minimal volumes of feed stock were received in the three months from September to November 2012. Consequently, the volume of material processed declined by 28%. Despite this and a 13% decline in recoveries, PGM production fell by just 1% for reasons given below.

The plant ran efficiently during the year and much attention was given to ultra-fine grinding so as to enhance recoveries. Work began on the conventional grinding mill project and this is due to be commissioned during 2014. Platinum Mile aims to further improve recoveries by the conventional grinding of course unliberated material fed to the plant.

The major challenge of the year was the unpredictable labour unrest, both on and off-site.

Given the increase in the Rand PGM basket price received, revenue improved by 18% to R118 million and increases in the cash cost were contained at 2%. Following a review of the carrying value of the asset, an impairment of $12 million was calculated. The cash margin increased from 13% in FY2012 to 25% in FY2013.

REvIEW OF OPERATIOns CONTINUED

PlaTINUM MIlE

Platinum Mile is a tailings retreatment facility located adjacent to Kroondal on Amplats’ Rustenburg Platinum Mine (RPM), in which Aquarius has a 91.7% stake. This facility retreats tailings received from RPM and is a consistent source of profitable low-cost ounces. Concentrate produced by Platinum Mile is sold to RPM, in terms of a profit-sharing agreement.

Platinum Mile – Key statistics

FY2013 FY2012 FY2011 FY2010

operational – total

Tonnes processed Mt 3.4 4.8 4.4 7.0

Average head grade g/t 0.75 0.52 0.68 0.58

Recoveries % 14 16 23 15

Cost per PGM (1) ounce produced $/oz 721 818 694 747

R/oz 6,606 6,506 4,795 5,618

Price received per PGM (1) ounce $/oz 1,247 1,233 1,477 1,278

R/oz 11,423 9,802 10,206 9,610

Total no. of employees (including contractors) 60 62 57 63

Total production – in concentrate

Platinum oz 7,209 7,242 13,191 11,446

Palladium oz 3,909 4,018 7,126 6,015

Rhodium oz 1,075 1,053 1,927 1,789

Gold oz 403 406 589 420

Total PGM production (3PGM+Au) oz 12,596 12,719 22,833 19,670

Total PGM production (5PGM+Au) oz 14,557 14,641 27,353 22,809

Attributable PGM production (3PGM+Au) oz 11,551 12,719 11,417 9,835

Financial – attributable

Revenue (2) $m 12.7 11.3 14.3 11.2

On-mine cash cost $m 9.3 9.4 8.2 7.4

Gross profit/(loss) $m 0.03 (2.4) 1.0 (0.9)

Capital expenditure $m 0.2 1.2 0.2 0.7


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Reporting of Mineral Resources, Mineral Reserves and exploration results is done in accordance with the South African Code for Reporting of Mineral Resources and Mineral Reserves (SAMREC 2007) and the Australian Code for Reporting of Mineral Resources and Ore Reserves (JORC 2004).

The JORC code is the Australasian equivalent of SAMREC and is prepared under the auspices of the Australasian Institute of Mining and Metallurgy (AusIMM). The SAMREC Code and SACNASP (South African Council for Natural Scientific Professions) are officially recognised on a reciprocal basis by AusIMM.

This section is a summary of the full mineral resources and mineral reserves statement. For complete details, refer to Aquarius’ Mineral Resource and Mineral Reserve Technical Statement 2013, which will be available on the Aquarius corporate website, www.aquariusplatinum.com.

Rounding off of numbers may result in minor computational discrepancies. Where this occurs, such discrepancies are deemed to be insignificant.

HIGHLIGHTs• Build up in production at Kroondal’s K6 shaft has begun and is on

schedule

• Kroondal’s PSA agreement with Amplats has been expanded, thus adding a total of 15.97Mt to Kroondal’s Mineral Reserves and extending its life to approximately 9.5 years. In exchange for Amplats’ contribution to reserves, AQPSA will:

• Contribute the use of its infrastructure and continue to manage the PSA in line with the existing terms and conditions;

• Sell its share of concentrate produced from the additional reserves to Amplats as per the existing off-take agreement; and

• Pay Amplats a variable royalty with a base rate of R11.50/t mined, as and when mined. The royalty varies with fluctuations in the Rand metal price, with a cap and floor of R14.95/t and R8.05/t respectively.

MInERAL REsOURcE AnD REsERvE sTATEMEnT a sUMMary

This 2013 Mineral Resource and Mineral Reserve statement reflects the Mineral Resources and Mineral Reserves of Aquarius’ operations in South Africa (through AQPSA) and in Zimbabwe (through Mimosa Investments Limited) as at 30 June 2013.

Other PGM mining operations

PPMAnglo Platinum(Mokopane)

Aquarius(Zondernaam)

Atlatsa(Bokoni)

Implats(Marula)

ARM/Anglo Platinum(Modikwa)

Anglo Platinum(Der Brochen)

Anglo Platinum(Amandelbult)

Anglo Platinum(Union)

Anglo Platinum/Lonmin(Pandora)

Eastplats(Crocodile River)

RPMImplats(Impala Platinum)

Anglo Platinum(Bafokeng-Rasimone)

N

Northam(Booysendal)

Mokopane

Lonmin(Limpopo)

Steelpoort

Aquarius(Vygenhoek)Aquarius

(Sheba’s Ridge)

Aquarius(Blue Ridge)

Aquarius(Fonte Verde)

Aquarius(Red Bush Ridge)

Pretoria

Brits

Johannesburg

Rustenburg

Aquarius(Kroondal)

Aquarius(CTRP)

Aquarius(Marikana)

Aquarius(Hoedspruit)

Aquarius(Kruidfontein)

Karee

Locality of Aquarius operations and projects in the Bushveld Complex, South Africa

Western limb

South Africa

Aquarius’ operations/projects

Towns

Middelburg

Northam(Zondereinde)

Pilanesberg Complex

Lonmin(Western and

Eastern Platinum)

Mashishing(Lydenburg)

Implats/ARM(Two Rivers)

Anglo Platinum(Twickenham)

Eastplats(Kennedy’s Vale)

km

0 20 40 60 80

Eastern limb

Northern limb

Aquarius(Everest)


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MInERAL REsOURcE AnD REsERvE sTATEMEnT CONTINUED a sUMMary

Harare

Bulawayo Aquarius/Implats(Mimosa)

ZIMBABWE

Implats(Zimplats)

Anglo Platinum(Unki) Selukwe Complex

Locality of Aquarius operations on the Great Dyke, Zimbabwe

Zvishavane

N

WedzaComplex

MuzengeziComplex

HartleyComplex

Total Mineral Resources at 30 June 2013• Operations 18.61 Moz• Projects 47.24 Moz

Total Mineral Resources 65.84 Moz

Total Mineral Resources at 30 June 2012• Operations 21.03 Moz• Projects 131.27 Moz


Total Mineral Reserves at 30 June 2013• Operations 6.09 Moz• Projects 0 Moz


Total Mineral Reserves at 30 June 2012• Operations 6.73 Moz• Projects 2.88 Moz


“The extension of the Kroondal PSA will

contribute positively to attributable resources

and reserves“

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operationsSummary of the Mineral Resources and Mineral Reserves for Aquarius’ operations as at 30 June 2013 (after the application of geological losses).

Mineral resources Mineral reservesMeasured indicated inferred inferred (oxides) Total Proved Probable Total

Kroondal – uG2Mt 11.88 1.93 0.17 13.98 18.14 3.04 21.18 4E g/t 5.87 6.18 6.19 5.92 2.99 3.17 3.01Moz 2.24 0.38 0.03 2.66 1.74 0.31 2.05

Marikana – uG2Mt 8.99 5.30 1.76 16.05 11.67 4.34 16.004E g/t 5.27 4.97 3.39 4.96 2.76 2.83 2.78Moz 1.52 0.85 0.19 2.56 1.04 0.39 1.43

everest – uG2Mt 24.20 3.70 1.13 29.03 11.83 0.37 12.20 4E g/t 3.37 3.06 3.53 3.33 2.86 2.98 2.87 Moz 2.62 0.36 0.13 3.11 1.09 0.04 1.13

Blue Ridge – uG2Mt 14.77 4.14 4.18 23.094E g/t 3.31 3.18 3.24 3.28Moz 1.57 0.42 0.44 2.43

AQPSA – TotalMt 59.85 15.06 7.24 82.15 41.64 7.75 49.394E g/t 4.14 4.16 3.40 4.08 2.89 2.99 2.91Moz 7.96 2.01 0.79 10.76 3.87 0.74 4.61

MimosaMt 28.93 21.37 10.11 6.24 66.65 7.58 5.93 13.514E g/t 3.75 3.55 3.74 3.46 3.66 3.52 3.26 3.40Moz 3.49 2.44 1.22 0.69 7.84 0.86 0.62 1.48

Aquarius – TotalMt 88.78 36.43 17.35 6.24 148.80 49.22 13.68 62.904E g/t 4.01 3.80 3.60 3.46 3.89 2.99 3.11 3.01Moz 11.45 4.45 2.01 0.69 18.61 4.73 1.37 6.09

Kroondal – PSA extension – uG2Mt 14.27 7.53 – 21.80 9.91 6.06 15.974E g/t 3.83 3.83 – 3.83 2.38 2.48 2.42Moz 1.76 0.93 – 2.69 0.76 0.48 1.24

Notes:

Although Marikana and Everest are currently on care and maintenance, the Mineral Reserves declared for these operations form part of the future mining plan. These operations will be re-started once a more favourable commodity pricing regime returns

4E g/t – corrected 4E PGE grade (Pt+Pd+Rh+Au)


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Project locality Mode of occurrence notes on Mineral resource statement

Kroondal On the western limb, on the outskirts of eastern Rustenburg, North West Province

UG2 Reef divided into Main and Leader seams, separated by pyroxenite parting

Converted mining right.

All internal waste is excluded in Mineral Resource estimations.

The in situ corrected 4E PGE grade is used to estimate Mineral Resources.

All dyke volumes plus 10m buffer zones are EXCLUDED from Mineral Resource estimations.

Geostatistically estimated density is used.

Geological losses are determined per shaft.

Mineral Resource tonnages and PGE grades are reported exclusive of external waste dilution.

Kroondal – PSA extension

Down dip of the existing Kroondal Platinum Mine

UG2 Reef divided into Main and Leader seams, separated by pyroxenite parting

Mineral Resource estimations are based on resource cuts as prepared by Anglo American Platinum.


All dyke volumes are INCLUDED in Mineral Resource estimations.


Geological losses applied per block, as per Anglo American Platinum standards.

Marikana On the western limb; 8km east of Kroondal, North West Province

UG2 Reef divided into Main and Leader seams separated by pyroxenite parting

Converted mining right – includes Salene: Firstplats mine and Firstplats Ptn20.

The in situ corrected 4E PGE grade is used for the estimation of Mineral Resources.

All dyke volumes are EXCLUDED from Mineral Resource estimations.


Geological losses are determined per shaft.

Mineral Resource tonnages and PGE grades are reported exclusive of external waste dilution.

A buffer zone of 10m either side of the major dykes is EXCLUDED from Mineral Resource estimations.

everest In the southern reaches of the eastern limb of the Bushveld Complex, near Mashishing in Mpumalanga

UG2 Reef divided into Main and Leader seams separated by pyroxenite parting

Converted mining right.

All internal waste is included in Mineral Resource estimations.


Mineral Resource tonnages and PGE grades are reported for full width cut.


Geological loss of 10% is applied.

All dyke volumes plus a buffer zone are EXCLUDED from the Mineral Resource estimation.

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Blue Ridge On the south-western extension of the eastern limb of the Bushveld Complex about 15km from the town of Groblersdal in Mpumalanga

A, B and C chromitites separated by internal pyroxenites similar to UG2 reef

Awaiting approval of Section 11 and conversion of mining right by the DMR .


The in situ corrected 4E PGE grades are used to estimate Mineral Resources.

Mineral Resource tonnages and PGE grades are reported for full width cut.

Geological losses: Blaauwbank block 13%, Millenium block Rietkloof 25%, Millenium block, Haakdoringdraai 30%.

Statistically determined density from 94 measurements across the property is used.

Mimosa Mimosa is located in Zimbabwe, east of Bulawayo in the Wedza Complex of the Great Dyke

PGM Mineral Resources at Mimosa are located in four erosionally isolated and fault-bounded blocks

A specific gravity of 3.15 is used for all Mineral Resource tonnage calculations.

The mining lease has some chrome seams way below the PGM Main Sulphide Zone horizon that are currently not being exploited.

Mineral Resources are quoted at a 2.0m mining cut.

In situ grades have been used to estimate Mineral Resources.

Determination of the economic channel is based on optimisation of the PGE metal content only (excluding base metal content).

Different geological losses are applied to resource categories and areas at an average 18%.


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* Various Competent Persons, as defined by the SAMREC Code have contributed to the Mineral Resource and Mineral Reserve figures quoted in this report. As such, these statements reflect the estimates as compiled by teams of professional practitioners from the various operations and projects. The Group Consulting Geologist, Martin Bevelander, a full-time employee of AQPSA, assumes responsibility for the Mineral Resource and Mineral Reserve estimates for the AQPSA Group. He has 13 years’ experience in the exploitation of PGM-bearing deposits.

Competent persons* for operations

Mineral resource Mineral reserve

KroondalCompetent person reporting date: June 2013

J.e. (ernie) VenterPr.Sci.Nat. 400241/07GSSA 6035219 years’ experience in the platinum industry

C.J. (Neels) KotzeMineral Resource ManagerIMSSA 179717 years’ relevant experience

Kroondal PSA extensionCompetent person reporting date: June 2013

M. (Martin) BevelanderPr.Sci.Nat. 400158/0713 years’ experience in the platinum industry

C.J. (Neels) KotzeMineral Resource ManagerIMSSA 179717 years’ relevant experience

MarikanaCompetent person reporting date: June 2013

J.e. (ernie) VenterPr.Sci.Nat. 400241/07GSSA 6035219 years’ experience in the platinum industry

F.J. (Freddie) huyserGroup Manager Technical Services IMSSA 1815 19 years’ relevant experience

everestCompetent person reporting date: June 2012

M.J. (Michael) PhippsPr.Sci.Nat. 400271/04GSSA 5661714 years’ experience in platinum industry, 27 years’ experience in total

J. (Jac) van heerdenMine Manager Operations: Everest17 years’ experience in the mining industry

Blue RidgeBankable feasibility report reviewed by SRK 2003, updated 2006, depleted 2010 and 2011


No Mineral Reserves declared

MimosaCompetent person reporting date: June 2013

d. MapunduCert.Sci.Nat. 200021/0519 years’ experience in the platinum industry

Alex MushonhiwaGeneral Manager: MiningB.Sc. (Hon.) in Mining Engineering 20 years’ relevant experience(six years at Mimosa)

VIew FoR 2014The Everest and Marikana mines were placed on care and maintenance towards the end of financial year 2012. They join Blue Ridge, which has been on care and maintenance since 2011. An appropriate business case is being developed for Everest and a business improvement initiative is being rolled out at Kroondal to enhance mining efficiencies and reduce unnecessary waste dilution.

Considering the prevailing metal prices, a concerted focused effort is being maintained to improve production grade at all operations while reducing external dilution to the mining cut.

Aquarius operations focus on the quality of resources and reserves in anticipation of an improvement in metal prices.

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Summary of the Mineral Resources for Aquarius’ projects as at 30 June 2013 (after the application of geological losses)

Mineral resourcesMeasured indicated inferred Total

Vygenhoek – uG2 Mt 1.39 1.394E g/t 5.11 5.11Moz 0.23 0.23

Sheba’s Ridge – PGes Mt 31.15 37.91 167.02 236.083E g/t 0.88 0.85 0.96 0.94Moz 0.88 1.04 5.18 7.10

Millennium – uG2 Mt 14.51 2.96 17.474E g/t 3.07 3.07 3.07Moz 1.43 0.29 1.73

Kruidfontein – Merensky** Mt 2.52 26.67 29.194E g/t 8.31 8.00 8.04Moz 0.68 7.18 7.86

Kruidfontein – uG2 Mt 4.53 40.67 45.204E g/t 5.56 5.48 5.49Moz 0.82 7.21 8.03

hoogland – uG2 Mt 2.71 3.89 6.604E g/t 3.16 2.68 2.88Moz 0.28 0.33 0.61

Zondernaam – Merensky Mt 43.07 43.074E g/t 5.12 5.12Moz 7.09 7.09

Zondernaam – uG2 Mt 34.35 34.354E g/t 7.98 7.98Moz 8.81 8.81

hoedspruit – Merensky** Mt 12.46 2.86 15.324E g/t 6.01 5.72 5.99Moz 2.45 0.53 2.98

hoedspruit – uG2** Mt 15.60 1.64 17.244E g/t 4.98 5.36 5.00Moz 2.53 0.28 2.81

Aquarius projects – TotalMt 32.53 90.25 323.13 445.914E g/t 1.06 3.18 3.55 3.29Moz 1.11 9.23 36.89 47.24

** The resource stated here is according to the inventory received

proJectsThe first phase of drilling at Zondernaam was completed and yielded promising results on both UG2 and Merensky reefs. Results to date motivate for the continued exploration of this very promising project. All exploration work on the project has been stopped until the renewal application for continued exploration is returned from the DMR.

The sale agreement concerning rights at Booysendal South entered into with Northam Platinum Limited and its subsidiaries has lapsed. The condition precedent that Section 102 approval be granted by the DMR prior to the close of business on 30 April, 2013, was not fulfilled.

In terms of the MPRDA, a mining right application has been lodged for Vygenhoek and is currently being processed by the DMR.

Similarly, final adjudication on the inclusion of Hoogland in Everest’s mining right is eagerly anticipated.

Prospecting rights for Chieftains and Walhalla have expired and AQPSA has submitted a new prospecting right application for these projects. Renewal applications for various prospecting rights across a number of projects are currently being reviewed by the DMR and their granting is expected in the new financial year.


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Vygenhoek 35km south-west of Mashishing, Mpumalanga

UG2 Reef deposited in synclinal structure in the floor rock where mineralisation has “ponded” as at Everest South

Mining right application has been submitted to the DMR.



All dyke volumes are excluded from Mineral Resource estimations.



hoogland 1.2km directly south of Everest orebody

UG2 Reef occurs as two erosional outliers

Section 102 application for inclusion in Everest’s mining right has been submitted to the DMR.

Mineral Resource tonnages and PGE grades are reported EXCLUSIVE of external waste dilution, and INCLUDE the upper and lower chromitite layers.


A buffer zone of 10m either side of the major dykes is EXCLUDED from Mineral Resource estimations.



Sheba’s Ridge

Approximately 30km from Groblersdal, Mpumalanga

Wide (150-300m) pyroxenite containing disseminated platinum and base metal sulphides

Awaiting renewal of prospecting right by the DMR.

The oxide and transition zones have been EXCLUDED from the Mineral Resources.


A cut off grade of 0.5g/t 3E PGE was used for the Mineral Resource tabulation.



hoedspruit Near Rustenburg, North West Province

Merensky and UG2 Reef developed. Project is the natural down dip extension of Brakspruit Anglo Platinum operations


A minimum width of 1.0m has been applied to resource selections.

The in situ corrected 4E PGE grade is used to estimate of Mineral Resources.



The Mineral Resources stated here are as received from Afarak. AQPSA is currently in the process of evaluating the orebody and will update the resource statement accordingly.

Kruidfontein North of the Pilanesberg Complex, North West Province

Merensky and UG2 Reef developed.


A minimum width of 1.0m has been applied to resource selections.




The Mineral Resources stated here are as received from Afarak. AQPSA is currently in the process of evaluating the orebody and will update the resource statement accordingly.

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Zondernaam 35km east of Lebowakgomo, Limpopo

Both Merensky Reef and UG2 Reef developed. Sub-outcrops with abutment against Transvaal Supergroup



The in situ corrected 4E PGE grade is used for the estimation Mineral Resources.



Red Bush Ridge

7km west of Steelpoort, Limpopo

Both Merensky Reef and UG2 Reef has been intersected

A purchase agreement has been reached with Midvaal Mining (Pty) Ltd in terms of this project. The required application is currently being processed by the DMR.

Sterkfontein Contiguous with Everest orebody

UG2 Reef occurs as two erosional outliers

Inside perimeter of Everest mine.

Exploration target.

Rooikraal To the east of the Blue Ridge mine, Mpumalanga

Same as Blue Ridge Awaiting renewal of prospecting right by the DMR.

Agreement has been reached with Bushveld Platinum to purchase all the prospecting rights relating to the Rooikraal Project.

Fonte Verde Close to the town of Delmas, Mpumalanga

Massive shearzone hosted siIver deposit


Agreement has been reached with Bushveld Platinum to purchase all the prospecting rights relating to the Fonte Verde Project.

Competent persons for projects

Mineral resourceVygenhoekCompetent person reporting date: September 2009

C. (Cecilia) hattinghPr.Sci.Nat. 400019/03GSSA 96390212 years’ experience in the platinum industry

hooglandCompetent person reporting date: November 2009

J.e. (ernie) VenterPr.Sci.Nat. 400241/07; GSSA 6035219 years in Platinum industry

ZondernaamCompetent person reporting date: 30 June 2010

C. (Cecilia) hattinghPr.Sci.Nat. 400019/03GSSA 96390212 years’ experience in the platinum industry

MilleniumBankable feasibility report reviewed by SRK 2003, updated 2006, depleted 2010 and 2011


Sheba’s RidgeCompetent person reporting date: 30 June 2010

S. (Steve) SavagePr.Sci.Nat. 400205/04GSSA 6050810 years’ experience in the platinum industry

hoedspruitCompetent person reporting date: August 2008

N (Nico) dennerPr.Sci.Nat. 400060/9814 years’ experience in the platinum industry

KruidfonteinCompetent person reporting date: September 2009

N (Nico) dennerPr.Sci.Nat. 400060/9814 years’ experience in the platinum industry

VIew FoR 2014To configure the most appropriate business case for Everest, a business improvement initiative project is now being rolled out to assist in improving mining activities and reducing unnecessary external waste-dilution.


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In the past financial year, the Company has made considerable inroads into repositioning the Group’s operations to best meet the challenges of the present difficult environment and to continue to provide employment, generate value for shareholders and make a contribution to communities.

Responsible, ethical conduct underpins our interaction with our stakeholders who include shareholders, employees, government, non-government organisations and local communities. Aquarius complies with the laws prevailing in its operating jurisdictions and respects human rights as defined by national and international organisations. We engage with communities in the areas in which we operate and strive to preserve and conserve the environment. The use of scarce resources, such as water and power, is monitored and measured, and Aquarius participates in the Carbon Disclosure Project as well as the Water Disclosure Project.

This summary of Aquarius’ sustainable development performance is based on the more detailed Sustainable Development Report 2013 that is available as a pdf on our corporate website: www.aquariusplatinum.com.

approacH to sUstainable deVelopmentAquarius aims for continuous improvement in its safety, health and environmental performances and to be a good corporate citizen in the communities in which it operates. We are committed to operating cost-efficiently and to delivering shareholder value, while simultaneously making every effort to ensure the well-being of all employees – be they employed directly or indirectly through contractors.

The safety, health, environmental, risk and quality (SHERQ) policy commits AQPSA, the unions and contractors to the establishment of a sustainable foundation for growth, and to the creation of value for stakeholders and society while reducing safety and health risks and the adverse impacts of operations on our employees and the environment.

Following consultation and agreement with the unions, the SHERQ policy was revised to ensure its alignment with Section 8 of the Mine Health and Safety Act as well as with the procedures and requirements of ISO 9001/ISO 14001 and OHSAS 18001. In terms of our certification with these standards, we review our policy every two years. The latest revision reinforces our commitment to any wellness and health-related issues that might arise from our mining and processing activities and to minimising the exposure

of the surrounding communities to our mining activities. The policy acknowledges that Aquarius’ operations have the potential to expose employees, supplies, customers, business partners and surrounding communities to safety, health and environmental risks.

Given the Company’s commitment to good business practices, we aim to provide a sustainable foundation for growth and value creation both for stakeholders and for society, while limiting any adverse impacts of our operations.

Given Aquarius’ several South-African based operations, compliance with the Broad-Based Socio-Economic Empowerment Charter for the South African Mining and Minerals Industry (the Mining Charter), as well as its accompanying scorecard and the targets set, is critical. Each South African mine has a Social and Labour Plan (SLP) setting out how these Mining Charter targets are to be achieved and progress made with these is reported annually to the DMR. Following the suspension of operations at Everest and Marikana, implementation of their respective SLPs has been postponed. Currently, only the SLP for Kroondal is in force.

The SLPs were developed to ensure that the operations meet the targets set out in the Mining Charter, along with their respective Environmental Management Plans (EMPs) and Mine Works Plans (MWPs). The SLPs, MWPs and EMPS are all prepared in line with the conditions pertaining to the approved new order mining rights. The initial plans were compiled for the period 2006 to 2011. While revised plans for the period 2011 to 2016 were approved in 2012, those for Marikana and Everest are currently on hold until such time as these operations resume production.

A major highlight of the year at Kroondal was that within 10 months of the start of the transition to owner operator mining from contract mining, the mine received accreditation for OHSAS 18001 (health and safety systems and procedures), ISO 14001 (environmental systems, processes and procedures) and ISO 9001 (which relates to quality management).

The Mimosa mine in Zimbabwe remains certified in line with both OHSAS 18001 and ISO 14001.

etHics and goVernanceThe Board is committed to the principles of good corporate governance and aims to achieve the highest standards and best practices in its overall performance. In accordance with the Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles & Recommendations, the UK

sUsTAInABLE DEvELOPMEnTa sUMMary

The principles of sustainability and sustainable development underpin the management of Aquarius’ operations, and this has never been more so than in the past year when the platinum sector was exposed to a myriad of challenges, both from a micro and macro perspective, all of which demanded a review of all aspects of the business model to ensure the challenges of the ongoing economic downturn in the platinum sector were best managed. These principles encompass Aquarius’ economic performance, safety, health, employment, community development, the environment, stakeholder engagement and governance.

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Corporate Governance Code, the South African King Code of Governance Principles (King III), collectively (the Recommendations), the Board has established systems of accountability and control through its corporate governance framework as outlined in its corporate governance statement.

As the corporate governance environment is constantly evolving, the charters and policies under which Aquarius operates will be monitored and amended. The Company will disclose the extent to which it has followed the guidelines and any reasons for departure from them.

A Code of Conduct, developed by the Board, provides a framework for all employees to conduct the business of the Company in an ethical and legal manner. The Board believes it is important that the Company maintain its obligations to shareholders and stakeholders. There are areas in which the Company must develop detailed policies, in accordance with the local legislative and regulatory requirements. The Code of Conduct guides employees to act with integrity and make informed choices when communicating or acting on behalf of the Company. The Aquarius Board and senior executives have a clear commitment to the Code of Conduct, a summary of which is available at www.aquariusplatinum.com.

Whistle-blowing policies, at all Aquarius operations in South Africa and Zimbabwe, support the Group’s governance initiatives.

risK managementEstablished policies on the oversight of risks and their management are in place, as is a process to identify, monitor and actively manage material risks. Risk registers at each operation are updated quarterly by the director responsible for risk. The risk registers are reviewed quarterly by the Audit/Risk Committee and annually by the Board, thus ensuring that the Board is made aware of internal control practices, risk management and compliance matters which may significantly impact upon the Company in a timely manner.

Internal controls are designed to identify, evaluate and manage significant risks to, whether negatively or positively, the achievement of the Company’s objectives.

For additional information on risk management and internal controls, refer to pages 31 to 35 of this report.

safetyEmployee safety is a priority at all operations. Emphasis is placed on developing and entrenching a culture and awareness of safety

among all by reinforcing behaviour that delivers positive safety outcomes. Allied to this is the concept of the shared responsibility for safety among all employees – from the most senior to the most junior levels.

There was, regrettably, one fatality across the Aquarius group in FY2013 (FY2012: four). See page 8 and the Sustainable Development Report 2013 for details. Other safety performance indicators improved, however, with the group’s disabling injury incidence rate (DIIR) declining to 0.94 per 200,000 hours worked from 1.06 in FY2012.

Most notably, the number of safety-related stoppages (Section 54s) issued to Kroondal declined year-on-year – there were 10 in FY2013 as compared with 18 in FY2012.

Several benefits resulted from of the changeover to owner-operated mining, one of which was the establishment of a centralised, structured SHERQ department and the appointment of a SHERQ departmental head to oversee, among other things, all aspects of safety at AQPSA. A new electronic SHERQ risk-management system was designed and implemented, becoming fully operational within four months.

The SHERQ department is responsible for all permanent employees as well as the management of contractors involved in niche, specialised functions. This was vastly improved with continuous monitoring and auditing of contractor systems and controls. In addition, since the transition, there has been an improvement in management stability and a more positive team spirit has been noted among employees.

In addition the annual Blast-Friendly Audit, undertaken by joint venture partner Anglo Platinum, was successfully concluded. The week-long audit covered all shafts and sections, and monitors compliance with policies and procedures. The 2013 audit concluded that overall compliance and performance had improved.

There were no fatalities at Mimosa during the 2013 financial year and the mine had achieved more than 3 million fatality-free shifts by year-end. The incidence of lost-time injuries for the year declined – there were just two in FY2013 to give an LTIFR of 0.26 for the year.

Mimosa’s DIIR declined to 0.05 per 200,000 hours worked from 0.24 in FY2012. As lost-time injuries have declined significantly, focus is now placed on near misses and minor injuries which are monitored as a matter of course. The identification of the reasons for what are termed near misses and minor injuries and how to prevent these is being incorporated into the safety strategy and in managerial responsibilities at Mimosa.

Aquarius – number of fatalitiesFY2010FY2011FY2012FY2013

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Aquarius – DIIR per 200,000 hours workedFY2010FY2011FY2012FY2013

0.550.50

0.941.06


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DIIR per 200,000 hours worked

FY2013 FY2012 FY2011

Kroondal 1.14 1.20 0.77

Marikana –* 0.47 0.48

Everest –* 2.24 0.41

CTRP –* 0

Plat Mile 0 0

Mimosa 0.05 0.24 0.03

GROUP 0.94 1.06 0.50

* On care and maintenance

HealtHAll Aquarius employees and their dependants have access to comprehensive health-benefit schemes. On-site primary-health and occupational health services are also available.

At Kroondal, the most significant occupational health risk is noise-induced hearing loss (NIHL). In FY2013, 17 cases of NIHL (FY2012: 14) were identified and submitted for possible compensation. Aquarius continues to address NIHL through hearing-conservation programmes that combine education, the provision of personal protective equipment as required, noise monitoring and silencing at source.

At Kroondal and Platinum Mile in FY2013, 10,811 medical surveillance examinations (FY2012: 12,283) were conducted for employees and contractors. As required by South African legislation, all employees attend annual medical examinations and screening, and the appropriate action is taken as and when required. Although silicosis is not a risk in PGM mining, screening for occupational lung-disease is done in line with legislation. As legally required, any incidence of tuberculosis (TB) is referred to the Medical Bureau for Occupational Diseases.

Allied to this, the biggest, industry-wide, health challenge in South Africa is the management of TB which is spread from person-to-person. This is monitored at our outsourced Occupational Health Centre at Bleskop Hospital (Anglo Medical/Health Services).

Regarding the management of HIV/Aids, two voluntary counselling and testing sessions were held at Kroondal shafts during FY2013 and 1,030 (FY2012: 5,789) employees underwent counselling and testing. Additional opportunity for counselling and testing is offered at the annual medical examinations.

Mimosa, through its Medical Services Department, has a comprehensive employee and workplace surveillance programme to monitor and address issues to do, among others, with exposure to dust, noise and chemicals in the workplace. These include regular monitoring of pneumoconiosis (with the assistance of the Medical Bureau of NSSA), hearing conservation programmes (HCP) for employees exposed to noise levels greater than 85dBA, biological lead monitoring for those who handle lead and chronic disease monitoring of employees who work in dangerous occupations, such as operators/drivers.

Although there are no occupational diseases at Mimosa, HIV/Aids and associated tuberculosis, are of concern. While the rate of infection of HIV/Aids has declined from 13% to 10%, this is still of concern, and opportunistic and related infections, including pulmonary TB, are problematic. The incidence of non-communicable lifestyle conditions, such as hypertension and diabetes, is on the increase.

employmentAquarius employed a total 9,946 people in all for FY2013 (FY2012: 10,141) – 7,261 permanent employees and 2,703 contractors as compared to 1,725 permanent employees and 8,415 contractors the previous year. Of the total, 8,264 were employed in South Africa and 1,682 in Zimbabwe.

The overall decline in employment of 1.9% was due largely to the suspension of operations at Marikana and Everest. Every effort was made to redeploy those affected at Kroondal, which had begun the changeover from contractor to owner mining in July 2012. This changeover resulted in a sharp drop in the number of contractor employees and a corresponding increase in the number of people employed directly. The total number of people employed at Kroondal rose by 50% or 2,694.

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Total number of employees by operation

employees contractors Total

FY2013 FY2012 FY2013 FY2012 FY2013 FY2012 FY2011

Corporate office 16 26 3 7 19 33 32

Kroondal 5,551 23 2,514 5,348 8,065 5,371 4,864

Marikana 33 3 56 1,306 89 1,309 1,528

Everest 28 8 – 1,529 28 1,537 1,681

Blue Ridge 21 – – 26 21 26 33

Treatment plants 60 93 – – 60 93 86

Mimosa 1,552 1,572 130 199 1,682 1,772 1,796

Total 7,261 1,725 2,703 8,415 9,946 10,141 10,024

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AQPSA successfully concluded one-year wage agreements with the National Union of Mineworkers (NUM) and Solidarity in relation to their members employed at Kroondal. The NUM is the majority union at the mine, representing Kroondal’s semi-skilled work force (Cat B) with Solidarity representing Kroondal’s skilled work force (Cat A). Both agreements provide for an on-average increase which slightly exceeds the increase in the cost of living as measured by the inflation rate. The increase came into effect on 1 July 2013.

The successful conclusion of these wage negotiations was a significant positive development for the company, particularly given the current difficult industrial relations environment in the mining sector in South Africa. AQPSA is extremely proud of its employees who continued to work, uninterruptedly, throughout the negotiations and maintained production.

In addition, after the transition, there was an improvement in management stability and a more positive team spirit among employees.

commUnity deVelopmentAquarius is cognisant of its social responsibilities to the communities located in the vicinity of its operations and aims to provide meaningful developmental, financial, technical and other support to improve the lives of community members, and to eliminate or minimise any negative impacts of mining on the communities. The Company contributes where it can to the sustainability of these communities and the development of their members beyond the lives of our operations.

The Group spent around R43.56 million (approximately $4.95 million) on corporate social investment in FY2013, despite reporting a loss in FY2012 – R2.2 million in South Africa and $4.7 million in Zimbabwe.

CoMMuNITy PRoJeCTS IN SouTh AFRICAMajor projects in South Africa for FY2013 were:

• early childhood development centre in Ikemeleng: R360,000 was spent to cover the operating costs of this centre which accommodates 200 children daily.

• Formalisation of the Ikemeleng township: R1.84 million was spent on this in FY2013, bringing to R12 million the total spent to date on the formalisation of Ikemeleng which is home to around 5,000 people. Actual expenditure so far has covered the formalisation process, legalities, completion of a bulk-water project and the provision of chemical toilets (180 in all). In addition, AQPSA has committed R3.4 million to Ikemeleng’s sanitation project, which will follow on from the initial phase of the project which is to be undertaken by the Rustenburg Local Municipality (RLM) and has yet to begin. The steering committee set up to oversee infrastructure development in Ikemeleng and which includes representatives from the RLM, Aquarius and the community, continues to meet monthly.

In addition, the following LED projects have begun:

• Community skills development: Kroondal has been involved in assisting communities to identify the skills they require to enable them to be economically sustainable and to reduce their dependence on the mining sector for employment. The Asset-

Based Community Development (ABCD) Leadership Programme has been instituted to do this and several community meetings and walkabouts have been conducted to identify existing community assets to be developed into sustainable resources. Several training session have been held so far in the Photsaneng, Mfidikwe, Thekwana, Ramochana and Ikemeleng villages. The training is aimed at community leaders – 128 leaders have been trained to assist them to take ownership of community projects and a week-long workshop was held with each community group.

• Vuka Mentorship Programme (Vuka): Vuka is an SMME development programme which relates to mentoring and enhancing the capabilities of SMMEs to enable them to be included in the local procurement supplier databases of AQPSA and other mining companies. From an initial group of 100 local SMMEs identified from local communities and the greater Rustenburg area, 25 were selected for mentoring. Two workshops have been held to date, resulting in a business plan being developed for each SMME attending. These workshops are to be followed by a six-month one-on-one mentoring programme aimed at enhancing the capabilities of the SMMEs to facilitate their inclusion in the local procurement databases of AQPSA and other mines in the area.

CoMMuNITy PRoJeCTS IN ZIMBABweMajor projects carried out during the year were in the areas of health, education, the environment and disadvantaged community interventions. These were in the form of refurbishments to health care infrastructure, the provision of administrative equipment, infrastructural development, and water reticulation to supply clean water.

Widespread deforestation is a major ecological disaster and Zimbabwe has not been spared. To combat this, Mimosa has helped to establish a nursery, Mtshingwe, at a local school to support the reforestation of the land of the surrounding Zvishavane communities. The nursery produces seedlings, serves as a referral centre for all trees, garden plants and herbs in the province and disseminates knowledge to communities. The nursery has contributed to a positive culture for the planting of indigenous plants and conservation in the communities.

Mimosa continues to value community engagement in its approach to corporate social investment and holds quarterly liaison meetings to enable community leaders to take the lead in defining such initiatives and in their prioritising them.

Employees remain an integral part of Mimosa and the vision is to implement and run a company whose heart and essence is focused on PEOPLE.

Particular projects in FY2013 were:

• Refurbishment of the maternity wing at the Zvishavane District Hospital and construction of a hospital laundry facility at a cost of $199,640.

• Health intervention expenditure that included renovations to the student nurse hostels at Harare Hospital as well as the provision of equipment and an ambulance for St Giles at a cost of $3,879,000.

• Refurbishment of Manhinga Orphanage at a cost of $69,000.


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enVironmentAquarius is fully aware of the potential impact its mining operations might have on the environment in the vicinity of its operations and is mindful of its obligation to mitigate and minimise this impact and protect the environment. While climate change has not been integrated explicitly into the business strategy, it is addressed indirectly by energy efficiency and cost-improvement initiatives.

Aquarius’ environmental management and compliance are governed by SHERQ policies and a code of ethics. These policies and the code of ethics address compliance and management, the prevention of pollution, environmental training and education, as well as management principles and the setting of targets. At the very minimum they ensure full compliance with local and provincial legal requirements.

The four most important environmental risks at Aquarius are:

• water – its availability and, in particular, the potential contamination of clean water resources and failure to optimise the consumption of dirty water.

• energy – security of supply and carbon emissions (the extent of our carbon footprint).

• waste management and the use of resources – the efficient, responsible disposal of waste and the efficient, optimal use of resources.

• land – management and rehabilitation, especially around former opencast operations.

Other potential significant environmental impacts from mining activities relate to the use of resources, the handling of contaminated oil and the management of hazardous waste. Control measures are in place to alleviate any harmful consequences. Such measures include the use of bunded storage areas for oil and fuel, the optimised use of reagents, temporary storage yards for hazardous waste, scheduled maintenance of equipment and vehicles, and vehicle emissions monitoring, among others.

Risk management is crucial to environmental management. Internal audits to rank and prioritise perceived risks are undertaken regularly at each mine. Environmental incidents are grouped in terms of their impact on the environment, health and hygiene, and quality. Each environmental-incident report includes an action plan to mitigate the consequences of the incident and prevent its reoccurrence.

Given the potential for future regulatory and physical environmental risks, Aquarius quantifies its carbon and water footprints annually, and reports these in its submissions to the carbon and water disclosure projects. Despite Kroondal being the only Aquarius mine in operation in South Africa, external legal compliance audits, environmental monitoring and impact mitigation measures continue at Everest, Marikana and Blue Ridge, the mines under care and maintenance.

In South Africa, in line with applicable legislation, EMPs and Integrated Water and Waste Management Plans (IWWMPs) are in place. In addition, Integrated Water Use Licence Applications (IWULAs) for all identified water use activities have been submitted to each of the relevant provincial Departments of Water Affairs (DWA) for approval. The sites which have received their Water Use Licences are audited accordingly and adherence to the licence conditions is improved annually. All the required legislative documentation has been submitted to the applicable government departments so as to obtain approval prior to the start of all proposed projects. External and internal audits are undertaken in line with all legally-binding plans and the conditions of those licences that have been received to date. The results of these audits are submitted to the relevant departments for review.

The Aquarius Group has adopted the ISO 14001 standard as the basis for its environmental management system. Aquarius operations on the western limb in South Africa have been awarded ISO 14001 recertification until 9 June 2016. Mimosa in Zimbabwe also retained its ISO 14001 certification in FY2013.

Given the impact of mining on land, Aquarius acknowledges its role as custodian of the land under its management and the conservation of biodiversity.

With the start of the West West Pit rehabilitation project, structural rehabilitation at the Marikana open pits was halted in January 2011 because approval was being sought with all relevant departments for a proposed new, revised rehabilitation method. The revised method of rehabilitation required an amendment to the approved EMP, in accordance with the National Environmental Management Act (NEMA 1998) and the MPRDA, 2002. New water use activities were identified and therefore approval for the submission of a new IWULA/IWWMP was required. Thus far, approval has been received from the DMR and the North West Department of Economic Development, Environment, Conservation and Tourism (NWDEDECT). However, the revised rehabilitation project may only begin once approval for the amended IWULA has been received from the DWA.

The West West Pit rehabilitation project involves the following activities, for which the relevant legislative authorisations referred to above are required:

• to use re-treated tailings from Kroondal in the overall rehabilitation required at Marikana’s former open pit;

• to develop a tailings storage facility (TSF) above the rehabilitated West West Pit and a contingency TSF north of the West-West Pit (Northern Surface TSF). The TSFs will comprise a tailings dam and associated return water to accommodate the re-treated tailings not used in the rehabilitation of the West-West Pit; and

• to build a proposed pipeline extending from Marikana to Kroondal, adjacent to the existing haul road between the two mines.


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Total water consumption (100%) – Ml

FY2013 FY2012 FY2011 FY2010

Kroondal 1,717 3,040 3,528 5,760Mimosa 3,336 3,263 2,300 2,659Marikana* – 2,192 4,662 1,113Everest* – 1,402 4,186 388Blue Ridge* – – – 1,974GROUP TOTAL 5,053 9,897 14,676 11,894

* Operations on care and maintenance

Water consumed by source (Ml)

FY2013 FY2012 FY2011

south africa Zimbabwe Total



Total water withdrawal from external sources 578 2,344 2,922 2,229 2,124 4,353 2,798 2,315 5,113Total clean water consumption from external sources (potable water) 1,139 0 1,139 4,405 0 4,405 1,231 0 1,231TOTAL WATER CONSUMPTION 1,717 2,344 4,061 6,634 2,124 8,758 4,029 2,315 6,344

Total energy consumption (100%) – MWh

FY2013 FY2012 FY2011 FY2010

Kroondal 422,455 381,133 359,328 337,354Mimosa 162,501 154,267 157,100 152,525Marikana* 6,067 94,657 100,948 92,135Everest* 8,580 102,915 91,582 15,635Blue Ridge* 4,836 – – –GROUP TOTAL 604,439 732,972 708,958 597,649

* Operations on care and maintenance

Emissions – CO2e tonnes (100%)

FY2013 FY2012

south africa Zimbabwe south africa Zimbabwe

Scope 1 – direct emissionsDiesel oil consumption 25,267 – 30,714 –On-site diesel oil consumption 17,435 8,995 27,172 9,333Scope 2 – indirect emissionsElectricity 530,326 160,876 704,866 152,087Scope 3 – other indirect emissionsProduct distribution 65,835 4,422 1,079 4,300Employee business travel 32,368 149,179 36,484 87,962Total by country 671,231 323,472 800,315 253,682GROUP TOTAL 994,703 1,053,997

Note: The Intergovernmental Panel on Climate Change (IPCC) Guidelines, 2006 conversion factors were used in doing these calculations


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The prime motivation for the revised West-West Open Pit rehabilitation project is to create additional TSF storage capacity as the additional platinum resources acquired as part of the PSA between AQPSA and RPM’s Rustenburg Section will lead to an increase in the total volume of platinum ore to be processed. Consequently, the total volume of tailings to be produced by Kroondal will increase. The three tailings dams at Kroondal will have all reach full capacity by January 2014.

Once full capacity is reached at the existing TSFs, the preferred outcome will be to use these tailings to rehabilitate the Marikana West-West Pit, as an alternative closure plan, and to accommodate the surplus tailings in a new TSF close to the pit.

Substantial progress has been made with land rehabilitation at Everest. The structural and functional phases of the rehabilitation of the old open pits has been successfully completed. Structural and slope stability work on the embankments to improve storm water management measures will continue throughout the rainy season. This will allow the natural biodiversity to self-establish. Signs of this can already be seen at the Valley boxcut. In addition, rehabilitation work has also begun on most of the existing prospecting roads.

Mimosa does not have any open-pit mining activities and the only disturbed areas are borrow pits from which gravel and sand are abstracted as needed for construction purposes.

leGISlATIVe CoMPlIANCe Compliance with the relevant legislation, regulations and environmental permits is expected as a minimum, both at the operations and at group level.

In South Africa, in addition to the Constitution, the following mining and environmental legislation applies (but is not limited to):

• Mineral and Petroleum Resources Development Act, 2002 (MPRDA)

• National Environment Management Act 1998

• National Water Act 1998

• Environmental Conservation Management Act 1969

• National Environmental Management Waste Act 2008

• National Environmental Management: Air Quality Act 2004 National Environmental Management: Biodiversity Act 2004

Compliance with South Africa’s National Air Quality Act in particularWe comply with the requirements of the National Environmental Management, Air Quality Act, 2004 (Act No 39 of 2004) (NEM:AQA), all the provisions of which finally came into effect on 1 April 2010. These provisions cover the requirements for an Atmospheric Emissions Licence and penalties for non-compliance with the Act, which is a criminal offence. This Act also has ramifications for emissions and the reporting of industrial greenhouse gas (GHG) emissions data and mitigation plans. The government has taken important steps to co-ordinate and develop a coherent policy framework to curb GHG emissions by 34% by 2020 and 42% by 2025 below the business-as-usual (BAU) trajectory, subject

to the provision of adequate financial, technological and capacity-building support by developed countries. The National Climate Change Response White Paper (henceforth the 2011 White Paper) provides an overarching policy framework for enabling this transition in the short, medium and long term. It elaborates on the government’s role in developing and implementing a suite of policy measures and strategies aimed at both mitigating and adapting to the impacts of climate change.

Atmospheric Emission Licences (AELs) are not currently required at any of the Aquarius operations. However, to show our commitment to mitigating any potential contribution to ambient air quality, the following have been implemented:

• Air quality impact assessments for current (and possible future) activities for Aquarius operations on both the western and eastern limbs of the Bushveld Complex so as to:

• evaluate our potential contribution to air quality in the region by means of dispersion modelling exercises;

• evaluate and improve current management and mitigation measures as required; and

• evaluate the potential contribution to ambient air quality for various operating conditions (current and future), eg, changing from rail to road transport of ore from different locations.

• Assessments of ambient air quality by means of dust fallout monitoring.

Aquarius is in the process of procuring additional equipment so as to expand its current dust fallout monitoring network. Locations for the installation of at least two PM10 monitoring stations are being investigated in the area surrounding Kroondal and Marikana. Also being considered is the potential use of passive sampling equipment (Radiello equipment) for ambient air monitoring of gaseous pollutants at various locations surrounding the operations.

Amplats, AQPSA’s joint venture partner in the PSA agreements at Kroondal and Marikana, has monitored ambient air in the Rustenburg area since 1995, the data for which AQPSA has access, in terms of the PSA agreement. There are currently four ambient air monitoring stations close to the Kroondal and Marikana operations as part of Amplats’ monitoring network.

Aquarius’ data collection and calculations of Scope 1 and Scope 2 GHG emissions are based on the Greenhouse Gas (GHG) Protocol: A Corporate Accounting and Reporting Standard (Revised Edition) and the ISO 14064-1:2006 standard which specifies the principles and requirements at an organisation level for the quantification and reporting of GHG emissions and removals. This includes requirements for the design, development, management, reporting and verification of an organisation’s GHG inventory.

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Because of the limitations inherent in any system of internal control, this system is designed to meet the Company’s particular needs and the risks to which it is exposed rather than eliminate risk altogether. Consequently it can only provide reasonable and not absolute assurance against material misstatement or loss.

The Board has delegated its responsibility for reviewing the effectiveness of these controls to the Audit/Risk Committee. In terms of its Charter, the Audit/Risk Committee is responsible to the Aquarius Board for all its operations and responsibilities. This includes the oversight and management of the Company risk profile and management thereof under the guidance of Committee member Mr Haslam. The Audit/Risk Committee meets on a quarterly basis to review and update the Company risk profile, which receives input from line managers across the Aquarius business. Strategic risks facing the Company are identified, monitored and actively managed through the allocation of appropriate resources to address the risks identified. The day-to-day responsibility for managing risk and the maintenance of the Company’s system of internal control is collectively assumed by the AQPSA Executive Committee in South Africa and the Board of Mimosa in Zimbabwe.

Key risk and control issues are reviewed regularly by the Board. On behalf of the Board, the Audit/Risk Committee has established a process for identifying, evaluating and managing the significant risks faced by the Company. The Company has also adopted a risk-based approach in establishing the Company’s system of internal control and in reviewing its effectiveness. To assist in managing key internal risks, it has established a number of Company-wide procedures, policies and standards and has set up a framework for reporting matters of significance. The Audit/Risk Committee is responsible for reviewing the effectiveness of the Company’s risk management, internal control systems and the interim and annual financial statements before their submission to the Board.

The allocation of resources currently focuses on the alignment of an organisational strategy that will ensure:

• Continuous improvement in safety, health and environmental performance towards the goal of ‘zero harm’.

• The requisite resources, skills and structures are in place to deliver on production objectives, as efficiently and cost-effectively as possible, in line with the Group’s stated strategic plan.

• The Company attracts, develops, retains and motivates the requisite management, operational, technical and business skills.

• Organisational diversity and improved employee engagement and participation in all business activities.

• The most efficient management of the Group’s mineral resource base, to maximise the value thereof to the Group and its business partners.

• Maintaining the safe, efficient and productive use of employees and contractors on the Group’s key operations.

• Attaining unit production costs in the lowest quartile of the industry.

• Maintaining effective project management processes and skills to ensure successful project implementation and delivery on Group operations.

• Protecting and maintaining the security and reliability of physical assets.

• Retaining process, systems and management technology competitiveness.

• Retaining permission to operate, on a fully compliant basis, within a dynamic legal and regulatory environment.

• Managing the uncertainties that affect the Zimbabwe operation.

• Addressing relevant issues regarding corporate responsibility, and being recognised as a good corporate citizen in the countries and communities in which the Company operates.

• Ensuring that impacts on the business in terms of utility supply disruptions are minimised.

• Ensuring that risks associated with suppliers and logistics are minimised.

• Managing through appropriate health policies, the impact of HIV and AIDS on employees.

The Board, through the Audit/Risk Committee, the AQPSA Executive Committee and the Mimosa Board, continually reviews the effectiveness of the Company’s system of internal controls. As part of this review, several key elements have been established within the Company to ensure a sound system of internal control which is described in detail below. These include:

• Regular review of risk and the identification of key risks at operational management level which are reviewed by the Audit/Risk Committee.

• Clearly defined organisational and reporting structure and limits of authority applied to subsidiary companies including monitoring and reporting on the regular board meetings held at the Company’s key subsidiaries.

• Clearly defined information and financial reporting systems including regular forecasts and a rigorous annual budgeting process with reporting against key financial and operational milestones.

• Rigorous investment appraisal process underpinned by the budgetary process where capital expenditure limits are applied to delegated authority limits.

• Clearly defined treasury policy monitored and applied in accordance with pre-set limits for investment and management of the Company’s liquid resources.

• Internal audit by the Finance Directors of the Company’s principal subsidiaries, AQPSA and Mimosa Holdings (Pvt) Limited who monitor, test and improve internal controls operating within the Company at all levels and report directly to the Audit/Risk Committee and the Board.

RIsK MAnAGEMEnT AnD InTERnAL cOnTROLs

The Board has overall responsibility for the Company’s system of internal control which includes risk management and reviewing its effectiveness. The system of internal control is designed to identify, evaluate and manage significant risks associated with the achievement of the Company’s objectives.


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There are a number of components to the system of internal controls within the Company which facilitate the control procedures and these are detailed below:

• A risk matrix has been developed and is monitored and reviewed by the AQPSA Executive, the Mimosa Board and the Audit/Risk Committee.

• A framework of transaction and entity level controls to prevent and detect material error and loss.

• A budgetary and periodic reporting review process performed by the Executive management of the Group.

• A documented structure of delegated authorities and approvals for transaction and investment decisions.

INVeSTMeNT PRoPoSAlSA budgetary process and authorisation levels regulate capital expenditure. For expenditure beyond specified levels, detailed written proposals are submitted to the Board for approval.

risKs to aQUariUs’ bUsinessThe Company faces several risks to its business and strategy, and management of these risks is an integral part of the management of the Company. The Company’s Audit/Risk Committee, through the AQPSA Executive and Mimosa Board, has put in place a formal process to assist it in identifying and reviewing risks. Plans to mitigate known risks are formulated, and the effectiveness of and progress in implementing these plans is reviewed regularly.

The list of the principal risks and uncertainties facing the Company’s business that follows below is based on the Board’s current understanding.

Due to the very nature of risk it cannot be expected to be exhaustive, and in keeping with best practice reporting standards, the list has been limited to those risks that have been judged most material by the Board. New risks may emerge and the severity or probability associated with known risks may change over time.

risKs relating to aQUariUs operationsPGM PRICeS ANd MARKeT

1. Description

The Company’s business is dependent on price developments in the market for PGMs and their by-products. These prices depend predominantly on the prevailing and expected level of demand for PGMs.

Demand for PGMs is driven mostly by economic growth, investment demand and automotive/jewellery sales. Autocatalyst demand exceeds 50% of PGM usage.

2. impact

Fluctuations in PGM prices as well as demand may negatively impact the financial result of the Company. PGM market demand is largely driven by the level of activity in the auto sector particularly in Western Europe which is a large user of platinum due to the high level of diesel vehicles within the auto sector.

3. Mitigation

Developments in the market are closely monitored by management and by the Board in order for the Company to be in a position to react in a timely manner to changes to PGM prices and demand. The Company recognises the importance of cost control in the mitigation of this risk.

Aquarius Board

Kroondal Marikana Everest

AQPSABoard d

AQPSAEXCO

Ridge MiningBoard

Blue RidgeBoard

Blue Ridge Mimosa

Mimosamanagement

MimosaBoard

CTRP PlatinumMile

ASACS

Audit/Risk Committee

50%

50%*

* Denotes effective holding in operation at Group level

50%* 100%* 50%* 50%* 91.7%*

Internal control structure of Aquarius Platinum Limited – as at 30 June 2013

RIsK MAnAGEMEnT AnD InTERnAL cOnTROLs CONTINUED

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MINING RISKS ANd hAZARdS

1. Description

The Company’s operations are subject to risks and hazards, including industrial accidents, equipment failure, unusual or unexpected geological conditions, environmental hazards, labour disputes, changes in the local regulatory environment, weather conditions and other natural phenomena. Hazards associated with hard rock underground mining include accidents involving the operation of mining and rock transportation equipment, and the preparation and ignition of large scale blasting operations, falls of ground, flooding and gas accumulation. In FY2013 the Company had one fatality, compared with four in 2012 and eight in 2011.

2. impact

The Company may experience material mine or plant shutdowns or periods of reduced production as a result of any of the aforementioned factors. Any such events could negatively affect the Company’s results of operations.

3. Mitigation

The Company is dedicated to a zero harm objective and the mitigation of mining risks is one of its primary operational goals. However, given the nature of mining operations there is no guarantee that accidents and fatalities will not occur in the future, despite all the safety initiatives undertaken and processes put in place. The Company has introduced the Silo Breaker system at AQPSA to manage and facilitate AQPSA’s complete enterprise risk profile. Silo Breaker consists of various modules covering Risk Management, Compliance Management, Unwanted Event Management, Task Allocation, Analytics, Production Management, Health Management and Asset Management.

lABouR RelATIoNS – CIVIl uNReST

1. Description

The Company’s ability to conduct its operations efficiently is dependent on managing a complex industrial and community relations environment, which has become increasingly so of late as the sector deals with accommodating both the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (AMCU) and their demands for wage increases within the framework of current labour legislation and collective bargaining structures.

2. impact

The Company may experience material mine or plant shutdowns or periods of reduced production as a result of any of the aforementioned factors, and any such events could negatively affect the Company’s results of operations. Above inflation wage demands will also have a detrimental effect on cash flows and productivity of the Group.

3. Mitigation

The Company has procedures and processes in place designed to increase communication with the work force and union leadership on an ongoing basis. A labour unrest action plan has been developed and implemented at AQPSA. AQPSA’s executive participates in the National Joint Operating Committee and Chamber of Mines safety and security initiatives.

exChANGe RATe RISK1. Description

The Group’s functional and presentation currency is US Dollars. The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Mimosa has a US Dollar functional currency and the South African entities have a South African Rand functional currency. Foreign exchange risk arises from future commitments, assets and liabilities that are denominated in a currency that is not the Group’s functional currency.

2. impact

Variations in the exchange rate may have a significant impact on profitability. Foreign currency transactions are converted into the functional currency using the exchange rate prevailing at the date of the transaction. Foreign exchange gains and losses arising from the settlement of such transactions and from the translation at reporting date exchange rates of monetary assets and liabilities denominated in foreign currencies are included in profit or loss. The assets and liabilities of the various entities are translated to the Group presentation currency at the rate of exchange ruling at the reporting date and income/expense items are translated at the period’s average exchange rate with any exchange differences being taken to the foreign currency translation reserve.

3. Mitigation

Currently there are no foreign exchange hedge programmes in place. Treasury maintains the majority of its currency in US Dollars.

ACQuISITIoN RISK1. Description

The Company has a stated strategy of pursuing growth through the acquisition of other companies and assets.

2. impact

New assets are by definition not as well understood as those in an existing portfolio despite any precautions that might be taken and, as a result, some financial and operation risk attaches to any acquisition. In addition, fees for advisors can be substantial and are payable even in the event that no transaction materialises.

3. Mitigation

The Company conducts comprehensive due diligence assessments on prospective acquisition targets and engages the services of reputable financial and legal advisors to advise it on all aspects of such potential transactions.

CASh Flow RISK1. Description

The Company operates in a sector that is going through a low commodity price period. PGM prices have remained low for an extended period of time in line with the extended low level of economic activity in Western Europe. Coupled with this, the mining environment is facing increased industrial activity and inflationary costs which is placing increased stress on profit margins and cash generation.


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CASh Flow RISK (continued)

2. impact

PGM price volatility can have a detrimental effect on the profitability of operations rendering some operations unprofitable and causing mine closures in some cases.

3. MitigationA Group cash forecast model and a Treasury Committee is in place to monitor the net cash position of the Group.

ReTeNTIoN oF Key PeRSoNNel

1. Description

The Company’s ability to conduct its operations efficiently is dependent on its ability to retain current talent and attract the correct level of new talent due to competing in a narrow labour market, both technically and professionally.

2. impactThe company is at risk of losing Corporate Memory/Intellectual Property due to staff turnover.

3. MitigationStrategic focus is on employee retention, including management philosophy, retention and incentive structures.

RISKS PARTICulAR To The SouTh AFRICAN oPeRATING eNVIRoNMeNT

1. Description

The majority of the Company’s assets are located in South Africa. Factors that may impact on the operations of the Group include:• Complex industrial relations environment,• Substantial electricity price increases due to shortage in

generating capacity,• Limited absolute availability of electricity and water for mining

operations (in particular new projects) and• High levels of cost inflation generally in Rand terms.

2. impactIncreased labour costs and electricity prices will affect the Company’s operating costs and, if electricity supplies are disrupted or strikes occur for any substantial period of time, this may have a detrimental effect on the Company’s ability to conduct its operations. Any changes in legislation, particularly as they relate to statutory imposed taxes and increased utility fees, may also have a detrimental effect.Changes in costs of the Company’s mining and processing operations could occur as a result of unforeseen events and consequently result in changes in profitability or the feasibility and cost expectations in mining existing reserves. Many of these changes may be beyond the Company’s control, such as those input costs controlled by South African state regulation, including energy costs and royalties.

3. MitigationThe factors having an impact on the Company’s future cost structure are closely monitored. Cost reduction initiatives are reviewed and reported to the Board. The Company cultivates good relations with the Department of Mineral Resources and the relevant labour unions and pursues power efficient mining methodologies.

lICeNCeS ANd Bee

1. Description

Mining companies operating in South Africa are required by law to have 26% ownership by black economic empowerment (BEE) entities in order to be granted new order mining rights or to achieve licence conversion of their old order mining rights. The South African government is also continuously reviewing the MPRDA, and changes to that legislation could have a detrimental effect on the Company’s business.

2. impactChanges to BEE legislation may impact on the Company. If BEE thresholds are increased as a result of the review of the MPRDA, this could have a detrimental effect on the Company.

3. MitigationThe Company completed a BEE transaction with the Savannah Consortium several years ago, which exceeded the full BEE ownership requirement and enabled it to convert all its licences. The Company also complies fully with BEE legislation in respect of Blue Ridge, which was acquired after the completion of the BEE transaction. The Company cultivates good relations with the DMR. The Company has through the AQPSA Board established a committee that is responsible for overseeing AQPSA’s BEE compliance with the Mining Charter.

RISKS PARTICulAR To The ZIMBABweAN oPeRATING eNVIRoNMeNT

1. Description

One of the Company’s operations, Mimosa (in which Aquarius has a 50% equity interest), is located in Zimbabwe. Factors that may impact on the operations of the Group include:• The Zimbabwean government has promulgated legislation that

requires all companies valued at more than $500,000 to be 51% owned by indigenous Zimbabweans.

• The Zimbabwean government has levied additional taxes and royalties on mining companies and there can be no guarantee that these will not be increased again in the future.

• The ability of ZESA to provide uninterrupted and reliable power supply to allow operations to perform efficiently.

2. impact

To the extent that the indigenisation law is enforced, it will reduce the Company’s level of equity holding in the Mimosa mine. Increased taxes and royalties in Zimbabwe, if implemented, will have a detrimental effect on the profitability of Mimosa.Interruptions to the power supply will cause disruption to Mimosa’s operations and will impact levels of production and profitability.

3. MitigationA non-binding term sheet regarding the planned indigenisation of Mimosa was signed on 14 December 2012. The term sheet set out key details of the plan and paved the way for the drafting of detailed agreements that would facilitate the implementation of the plan. There is still some uncertainty on the matter and no further progress has been made. As a result, the matter is ongoing and management is unable to estimate the financial impact of the proposed transaction. Management will continue with discussions on the way forward.The factors having an impact on the Company’s future cost structure are closely monitored and cost reduction initiatives are planned and reported to the Board.

RIsK MAnAGEMEnT AnD InTERnAL cOnTROLs CONTINUED

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PSA11. Description

The Kroondal pooling and sharing agreement (PSA1) reflects an arrangement whereby the parties have contributed funding, infrastructure and in situ PGM resources to the Kroondal unincorporated joint venture structure which is operated as the Kroondal mine by AQPSA. All production, costs and profits or losses are split equally.

2. Parties

• AQPSA

• RPM

3. Materiality

• Highly material

• The PSA1 arrangement remains in place for the entire life of the Kroondal mine

PSA21. Description

The Marikana pooling and sharing agreement (PSA2) reflects an arrangement whereby the parties have contributed funding, infrastructure and in situ PGM resources to the Marikana unincorporated joint venture structure which is operated as the Marikana mine by AQPSA. All production, costs and profits or losses are split equally. The Marikana operations have been placed on care and maintenance.

2. Parties

• AQPSA

• RPM

3. Materiality

• Highly material

• The PSA2 arrangement remains in place for the entire life of the Marikana mine

off-take agreements:

• Kroondal concentrate off-take agreement

• Marikana concentrate off-take agreement

• Everest concentrate off-take agreement

counterparty

• RPM

• RPM

• IRS

material contractsAs with all substantial enterprises, Aquarius relies on several key material contracts for the conduct of its business. In keeping with best practice reporting standards, a summary of the most material of these arrangements is provided below.

pgm concentrate off-taKe agreementsAQPSA also has concentrate off-take agreements in place at each of its mining operations. Each of these off-take agreements is a life-of-mine take-and-pay arrangement.

Mimosa has an off-take agreement with Centametall AG of Switzerland, but delivers the concentrate it produces to IRS in South Africa for toll processing and refining prior to delivery of metal.


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aQUariUsexeCuTIVe dIReCToR

Jean Johannes Nel – B.Acc. (Hons), CA(SA)Chief Executive Officer

Jean Nel obtained his honours degree in Accounting from the University of Stellenbosch in 1995, and completed articles with Deloitte & Touche, qualifying as a CA(SA) in 1998. He joined the corporate finance division of Investec Bank in 1999 and focused primarily on the resource sector of southern Africa until 2003 during which time he obtained the CFA (AIMR) qualification. Jean left Investec in 2003 to act as independent corporate finance consultant to mining and resource companies operating in southern Africa, where he acted for, among others, Aquarius Platinum Limited. In 2009, he completed the Advanced Management Programme at Insead. He joined the Board of AQPSA in January 2012 was appointed to the Aquarius Board in April 2012. He was appointed interim Chief Operating Officer of the Group in October 2012 and Chief Executive Officer of Aquarius in November 2012.

soUtH africa AQPSA

Robert (Rob) Neville Schroder – B.Sc. (QS)Managing Director

Rob Schroder joined AQPSA in January 2012 as Capital Projects Manager. Rob has 21 years’ experience in the mining and engineering industry, with exposure to coal, gold, platinum, chrome, nickel and diamonds. He has three years of experience as Managing Director and four years as Commercial Director of Shaft Sinkers, as well as 14 years in the consulting industry as a partner with RSI and Venn and Milford quantity surveyors. Rob was appointed Managing Director of AQPSA in July 2012.

Graham Ferreira – B.Compt., (Hons) B.Acc., CPAFinance Director

Graham Ferreira joined AQPSA in 1998 when he was appointed General Manager, Admin and Finance on the Kroondal Project which later the same year, listed on the JSE as Kroondal Platinum Mines Ltd (KPM Ltd). When AQPSA bought out KPM Ltd in 2002, he was appointed to the AQPSA Executive. Mr Ferreira studied accountancy part time while spending 10 years with Ernst & Young, servicing mostly listed mining industry clients. After leaving the profession, he worked as a financial executive in the retail and trade exhibition business both in South Africa and the USA.

wessel Phumo – NHD (Mining Engineering) B.Tech (Mining Engineering)General Manager Operations

Mr Phumo commenced his career as a learner official at Saaiplaas Gold Mine in January 1988, holding various positions within Harmony Gold Mining Company Limited until he joined AQPSA in May 2007 as Mine Manager. Mr Phumo was promoted to General Manager Operations: Marikana in December 2007 and subsequently appointed General Manager: Kroondal on 7 March 2011.

Gabriël (Gawie) de wet – B.Sc. Eng (Mech)General Manager Engineering

Mr de Wet obtained his mechanical engineering degree from the University of Pretoria in 1986 whereafter he joined the then Iscor Mining Company. He also holds a post-graduate diploma in maintenance engineering. Mr de Wet held various positions at Iscor’s Coal division until he joined Kroondal Mine in March 2000 as Engineering Manager. Mr de Wet was subsequently appointed as General Manager Engineering in March 2003.

ZimbabWe MIMoSA

winston Chitando – B.Acc.Executive Chairman

Winston Chitando was appointed Executive Chairman of Mimosa from 1 April 2013, having been Managing Director since 2007. Up until 30 September 2007, he was also Commercial Director of Zimasco. On leaving college in 1985, Winston joined Wankie Colliery Company. He worked for Anglo American Corporation Zimbabwe from 1990, until joining Zimasco in 1997.

herbert S. Mashanyare – B.Sc. (Chem), MPhil (Applied Research in Metallurgy), M.Sc. Eng., Diploma of Imperial College, (DIC)Executive Director

Herbert Mashanyare was appointed Technical Director in July 2004 and was responsible for growth and other major projects, research and development and the implementation of best practice at Mimosa. He was appointed Executive Director in August 2011. Herbert was previously the Metallurgical Executive responsible for process projects and improvements. His prior work experience includes eight years at Rio Tinto Zimbabwe, six years at the Institute of Mining Research and 13 years at Union Carbide.

Peter R Chimboza – B.Sc. (Physical Science)Resident Director

Peter Chimboza joined Mimosa Mining Company in August 2004 as General Manager and was appointed Production Director in January 2006. He was appointed Resident Director in January 2010 with overall responsibility for operations at Mimosa Mine. Prior to joining Mimosa, Peter worked for Zisco Steel and Zimasco in senior management positions at their metallurgical processing operations.

Fungai Makoni – B.Com. Accounting, CTA, Part II FQE ICAZManaging Director

Fungai Makoni joined Mimosa in December 2004 as Finance Executive in the Harare office and was appointed Company Secretary in April 2005. He was subsequently appointed to the position of General Manager Finance and Administration on 1 October 2007, a position he held until his appointment as a Director on 1 December 2012. He was subsequently appointed Managing Director on 1 May 2013. On leaving university, Fungai trained with Deloitte & Touche in Zimbabwe before joining Zimasco in July 2002.

ExEcUTIvE MAnAGEMEnTsOUTh afrICa aND zIMbabwE

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DIREcTORs’ REPORT

The directors of Aquarius Platinum Limited (Aquarius) provide hereunder their report as to the results and state of affairs of the Group for the financial year ended 30 June 2013. The consolidated financial information is presented in US Dollars.

directorsThe names of the directors of the parent entity in office during the financial year and until the date of this report are as follows:

Nicholas T. SibleyNon-executive Chairman

Mr Sibley is a Fellow of the Institute of Chartered Accountants in England and Wales, a director of Richland Resources Ltd, Wah Kwong Maritime Transport Holdings Ltd and a quoted investment company. He was formerly Deputy Chairman of Wheelock Capital from 1994 to 1997, as well as Executive Chairman of Barclays de Zoete Wedd (Asia Pacific) Limited from 1989 to 1993. Mr Sibley is a former director of Barclays de Zoete Wedd Holdings Ltd. Mr Sibley was appointed to the Aquarius Platinum Board in October 1999 and assumed the Chairmanship in July 2002. Mr Sibley is a member of the Audit/Risk and Remuneration Committees of the Group.

Jean NelExecutive Director/Chief Executive Officer

Mr Nel obtained his Accounting degree in 1994 and honours degree in Accounting in 1995 from the University of Stellenbosch, completed articles with Deloitte & Touche and qualified as a CA(SA) in 1998. Mr Nel joined the corporate finance division of Investec Bank in 1999 and focused primarily on the resource sector of Southern Africa until 2003 during which time he obtained the CFA (AIMR) qualification. Mr Nel left Investec in 2003 to act as an independent corporate finance consultant to mining and resource companies operating in Southern Africa, where he acted for, amongst others, Aquarius Platinum Limited. In 2009 Mr Nel completed the Advanced Management Programme at Insead. Mr Nel joined the Board of AQPSA in January 2012. He was appointed to the Aquarius Platinum Board in April 2012 and became Chief Executive Officer of the Group in November 2012.

david R. dix Non-executive Director

Mr Dix’s background is in economics, law and taxation and he is a Barrister and Solicitor in the High Court of Australia. He has held various positions with Shell Australia Limited and worked for 16 years in Corporate Advisory at both Macquarie Bank Limited and UBS AG specialising in the mining industry, including Head of Resources for Asia Pacific and in London as Head of Mining. Mr Dix is Non-Executive Chairman of Troy Resources NL. Mr Dix was appointed to the Aquarius Platinum Board in March 2004. He is Chairman of the Audit/Risk Committee and a member of the Remuneration Committee. He brings to Aquarius a wealth of experience gained in the international business and resources communities.

G. edward haslam Non-executive Director

Mr Haslam joined Lonmin plc in 1981 and was appointed a director of Lonmin plc in 1999 and Chief Executive Officer in November 2000. He retired from Lonmin plc in April 2004. Mr Haslam is a Director of the Finnish nickel mining company Talvivaara Mining Company Plc, which completed its listing on the LSE in June 2007. In March 2011, he was appointed Senior Independent Director of London and Toronto listed gold miner Centamin Egypt Limited. Mr Haslam was appointed to the Aquarius Platinum Board in May 2004 and is Chairman of the Remuneration Committee and a member of the Audit/Risk and Nomination Committees of the Group.

Tim Freshwater Non-executive Director

Mr Freshwater is a solicitor in the UK and Hong Kong and has been involved in Asian markets for over 35 years. Mr Freshwater is the director of a number of companies, including Swire Pacific Limited, Chong Hing Bank Limited, Cosco Pacific Limited, Savills PLC, and Hong Kong Exchanges and Clearing Limited. Mr Freshwater was appointed to the Aquarius Platinum Board in August 2006. Mr Freshwater is a member of the Audit/Risk and Nomination Committees of the Group and is a Senior Independent Director of the Company.

Kofi Morna Non-executive Director

Mr Morna is an Executive Director of Savannah Resources (Pty) Ltd, the lead investor in the Savannah Consortium, Aquarius Platinum’s BEE partner. Prior to joining Savannah Resources, Mr Morna worked with the International Finance Corporation as an Investment Officer, Gemini Consulting as a Senior Management Consultant and Schlumberger Oilfield Services as a Field Engineer. Mr Morna holds an MBA from the London Business School and a BS from Princeton University in the United States. He is currently a director of Mkhombi Holdings, Hall Core Drilling, AIM and ASX listed Ferrum Crescent and a number of private mining exploration and beneficiation companies. Mr Morna joined the Board of AQPSA in February 2005 and was appointed to the Aquarius Platinum Board in February 2007. Mr Morna is a member of the Audit/Risk Committee and Nomination Committee of the Group.

Zwelakhe Mankazana Non-executive Director

Mr Mankazana is an Executive Director of Savannah Resources (Pty) Ltd, the lead investor in the Savannah Consortium, Aquarius Platinum’s BEE partner. Mr Mankazana holds an MSc in Economics from the Patrice Lumumba University of Friendship. In addition to his interests in mining, Mr Mankazana is a founder of South African mobile operator Cell C and serves on the boards of its holding companies. He also represents BEE shareholders on the board of the holding company for Siemens and Nokia Siemens Networks in South Africa. He participates in community work through his


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DIREcTORs’ REPORT CONTINUED

involvement with several development and education trusts. Mr Mankazana joined the Board of AQPSA in February 2005. He was appointed to the Aquarius Platinum Board in November 2008 and is a member of the Remuneration Committee of the Group.

Sonja de Bruyn SebotsaNon-executive Director

Ms de Bruyn Sebotsa was appointed to the Aquarius Board on 6 February 2013. She is a founder and principal partner of Identity Partners, an investment, financing and advisory firm. She is the director of a number of companies including RMB Holdings Ltd, Discovery Holdings Limited, Nestlé (South Africa) (Pty) Ltd and was a director of Anglo American Platinum Limited from 2008 to 2013. Ms de Bruyn Sebotsa was Vice-President of Investment Banking at Deutsche Bank, where she worked in their Johannesburg, London and Tokyo offices on mergers and acquisitions, privatisations, IPOs, black economic empowerment transactions and financings. In 2002 to 2007 she was part of a team that built a portfolio of investments (an endowment) to benefit a women’s empowerment Trust, Women’s Development Bank, through major acquisitions in large companies. She is a Young Global Leader of the World Economic Forum (Class of 2010). Ms de Bruyn Sebotsa has also been appointed Chairman of the Board of AQPSA. She is Chairman of the Nomination Committee of the Group.

Stuart A MurrayFormer Director

Mr Murray resigned from the board of Aquarius on 5 October 2012. Prior to his resignation he sat on the Boards of Mimosa Investments Limited, the Group’s 50% owned entity which jointly controls the Mimosa Mine in Zimbabwe, Platinum Mile Resources (Pty) Ltd, the Group’s 91.7% owned tailings retreatment company, and Aquarius Platinum (SA) Corporate Services (Proprietary) Limited, the owner of 50% of the Chrome Tailings Retreatment Plant. Mr Murray was a member of the Nomination Committee and various executive committees of the Group.

Sir william Purves Former Director

Sir William Purves retired from the board of Aquarius on 5 November 2012. Prior to his resignation, he was the Senior Independent Director of the Company, Chairman of the Audit/Risk Committee and a member of the Nomination Committee of the Group.

company secretarywilli M.P. BoehmMr Boehm joined Aquarius in June 1995. He is a member of CPA Australia. Mr Boehm has been involved in the management and listing of several companies in Australia, the UK and South Africa. He is responsible for the Company’s Corporate Affairs and Group Finance. Mr Boehm sits on the Boards of Mimosa Investments Limited, the Group’s 50% owned Zimbabwean jointly controlled entity and Aquarius Platinum Corporate Services Pty Ltd in Australia. He is a member of the Nomination Committee of the Group.

interests in tHe sHares of tHe companyAs at the date of this report, the interests of the directors in the shares of Aquarius Platinum were:

Director common shares

N.T. Sibley 1,877,777J. Nel 609,970D.R. Dix 100,000G.E. Haslam 16,666T. Freshwater –K. Morna* 19,004,767Z. Mankazana* 19,004,767S. de Bruyn Sebotsa –

* The interests held by Mr Morna and Mr Mankazana arise as a result of their directorship and beneficial interest in Savannah Resources Limited which holds 19,004,767 Common Shares.

principal actiVitiesThe principal activities of companies within the Group during the financial year were mine development, concentrate production and investment. During the year, the principal focus revolved around the operations of the Kroondal mine, the Mimosa mine and the Platinum Mile retreatment facility. The Group’s other mines – Everest, Marikana, Blue Ridge and the Chrome Tailings Retreatment Plant remain on care and maintenance.

resUlts of operations The Group’s net loss for the year after income tax was $288 million after an impairment charge of $226 million (2012: net loss of $158 million).

ReVIew oF oPeRATIoNSStrategic:• Implementation of revised support system at Kroondal completed

• Successful transition to owner operator model at Kroondal completed

• Focus on turnaround at Kroondal evidenced by improved operating results – Kroondal EBITDA up 12 fold compared to the prior year

• Kroondal mine life increased by a further 3.5 years to 9.5 years following agreement with PSA1 partner Amplats

• All unprofitable operations have been placed on care and maintenance for the duration of the current downturn

Financial:• Revenue decreased by 24% to $371 million (2012: $486 million)

• On-mine EBITDA(1) increased by 145% to $70 million (2012: $29 million)

• Headline loss(2) (before exceptional charges) of $61 million (2012: headline loss of $154 million)

• No dividend declared (2012: nil)

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operational:• Group attributable production, excluding operations on care and

maintenance, increased by 13% to 325,103 PGM ounces

• US Dollar PGM price weakened by 6%, offset in South Africa by a weaker Rand-US Dollar exchange rate

• Average Rand basket price up 7% year-on-year at just over R10,940 per PGM ounce due to Rand weakness

• Weighted average on-mine unit cash costs in South Africa decreased by 15% in Rand terms

Group attributable production for the year was 325,103 PGM ounces, 21% lower compared to the prior year due to the closure of Everest and Marikana mines. Significantly, Aquarius’ continuing mines exceeded last year’s production. Kroondal recorded a 21% increase, Mimosa recorded a 3% increase and Platinum Mile recorded a 1% decrease. These were significant, particularly for Kroondal which was faced by a number of challenging issues and structural changes.

Regrettably, there was one fatality at the Group’s operations during the year. Mr Raohang Ramakhetha, a rock drill operator employed by Precrete, was struck by a fall of ground during the drilling operations of long anchor support at the Kroondal mine.

In August 2012, Aquarius placed the CTRP operation on care and maintenance as a result of the ongoing low Rand basket prices and more oxidised material being supplied as feed. A preliminary study at CTRP has indicated that the oxidised material could be milled to achieve the requisite recoveries, but that capital of approximately R30 million would be required. It was decided that current Rand PGM prices do not warrant the capital expense.

The Everest, Marikana and Blue Ridge mines remained on care and maintenance throughout the financial year. Aquarius continues to consider various options for the future of these mines.

An impairment charge of $226 million against the carrying value of the Group’s mining assets was made to the income statement. This comprised $127 million written off in the half-year to December 2012 and a further $99 million written off in the half-year to June 2013 comprising $86 million for the Everest mine, $2 million for Platinum Mile and $11 million for other mineral rights. Further details are provided in note 7 of the financial statements.

Zimbabwean indigenisationOn 14 December 2012, Mimosa Investment Holdings (“Mimosa Investments”), which is held jointly in a 50:50 partnership with Impala Platinum Holdings Limited, concluded a non-binding term sheet in respect of a proposed indigenisation implementation plan (“IIP”) with the Government of Zimbabwe. The term sheet provides for the key terms, subject to certain conditions precedent, of the sale by Mimosa Investments of an aggregate 51% equity ownership of Mimosa Holdings (Private) Limited (“Mimosa Holdings”), the wholly owned operating subsidiary of Mimosa Investments which owns and manages the Mimosa mine.

The sale consideration for the 51% of Mimosa Holdings to the indigenous parties is $550 million (50% attributable to Aquarius), based on an agreed fair market value for Mimosa Holdings of US$1.078 billion. As part of the IIP, the debt owing by the Reserve Bank of Zimbabwe will be transferred to the Government of Zimbabwe.

In terms of the IIP, Mimosa Investments will provide a vendor loan funding mechanism, which has a term of ten years, to facilitate the transaction. This loan will bear interest at a rate of 9% annually and will be settled through the waiver of the right to receive 90% of dividends due to the indigenous entities in favour of Mimosa Investments.

Included in the conditions precedent of the term sheet is the requirement for definitive agreements to be concluded between the parties. In terms of the drafting and agreeing of the terms of the definitive agreements, little progress has been made. As at year end the definitive agreements are yet to be finalised and an extension of the term sheet has been requested but not yet agreed. As a result, the matter is ongoing and management is unable to estimate the financial impact of the proposed transaction.

Mimosa equity accountingFollowing a change to International Financial Reporting Standard 11 (IFRS11) governing the accounting for jointly controlled investments, Aquarius has commenced accounting for its investment in Mimosa and Ridge using the equity accounting method from 1 July 2013. This differs from the present approach whereby Aquarius proportionately consolidates its investment in Mimosa and Ridge.

The equity method recognises the Group’s share of net assets and contribution to profit and loss as single line items in the statement of financial position and statement of comprehensive income. This differs from the previous approach which included each line item such as revenue, cost of sales, expenses, etc as part of the consolidated results. This change will not result in a change to the net assets of the Group.

Whilst Aquarius’ after tax result remains identical under both methods, it is important to note that Aquarius’ reported cash position from July 2013 will only reflect cash from controlled entities and will no longer include cash held in joint ventures such as Mimosa and Ridge. Aquarius’ net investment in Mimosa and Ridge will be disclosed in the balance sheet as “Equity Accounted Investments.”

Booysendal Sale of Rights Agreement lapsesThe Sale Agreement concerning rights at Booysendal South entered into with Northam Platinum Limited and its subsidiaries has lapsed. The condition precedent that Section 102 approval be granted by the Department of Mineral Resources prior to close of business on 30 April 2013 was not fulfilled.

extension of the Kroondal PSAThe Company reached agreement with a wholly owned subsidiary of Anglo American Platinum (Amplats) to extend the Kroondal PSA arrangement. The agreement increases Kroondal’s mine life by three years from 6.5 years to 9.5 years.


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DIREcTORs’ REPORT CONTINUED

operating results Aquarius recorded a headline loss (2) of $61 million for the financial year.

On-mine EBITDA (1) of $70 million was 145% higher compared to $29 million in the prior year due to the closure of high cost mines and improved production at Aquarius’ continuing mines, particularly Kroondal. The closure of high cost mines, the successful implementation of the revised support system at Kroondal and the completion of the transition to owner operator at Kroondal all contributed to higher efficiencies and increased production.

Revenue (PGM sales, interest) for the year was $371 million, down 24% from $486 million in the prior year. The decreased revenue was a result of lower production, down 86,295 PGM ounces compared to the prior year due to the closure of Everest and Marikana. Measured on a PGM ounce basis, revenue decreased to $1,230 per PGM ounce from $1,310 per PGM ounce in the prior year.

Total cash cost of sales was $307 million, down $158 million due to lower production following the closure of high cost mines Everest and Marikana. On a per PGM ounce basis this represents a 19% decrease in Dollar terms (and 15% in Rand terms) as a result of the closure of high cost mines, increased efficiencies gained from the successful implementation of the revised support system and the change to owner operated mine at Kroondal.

Exchange rate movements continued to have a volatile effect on earnings with a foreign exchange loss of $19 million recorded in the financial year.

The Group’s cash balance at 30 June 2013 was $103 million (2012: $180 million). The directors are of the view that the Group’s present cash reserves are sufficient to manage its operating mines for the next twelve months based on present market dynamics.

diVidendsNo dividend has been declared for the year ended 30 June 2013.

significant cHanges in tHe groUp’s state of affairsThe directors are not aware of any significant changes in the state of affairs of the Group that occurred during the financial year, which have not been covered elsewhere in this Annual Report.

eVents sUbseQUent to tHe end of tHe financial yearThere were no material events subsequent to 30 June 2013 that have not been reflected in the financial statements.

liKely deVelopments and expected resUltsOther than matters referred to in this report, the directors make no comments regarding the likely developments in the operations of the Group and the expected results of those operations in subsequent financial years. In the opinion of the directors, any further disclosures might prejudice the interests of the Group.

enVironmental regUlation and performance Companies within the Aquarius Platinum Group are required, on cessation of mining operations, to rehabilitate the relevant mining area on which mining operations have been conducted. Mr Rob Schroder, Managing Director of AQPSA, is the officer responsible for compliance on these matters for all South African properties within the Group. Mr Winston Chitando, Managing Director of the Mimosa Group of Companies in Zimbabwe, is the officer responsible on these matters for all Zimbabwean located properties within the Group.

In South Africa, the Company makes annual contributions to established trusts in order to provide for its obligations in respect of environmental rehabilitation. Environmental activities are continuously monitored to ensure that established criteria from each operation’s environmental management programme, approved by relevant authorities, have been met.

There have been no known significant breaches of any environmental conditions.

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Director number of meetings held whilst in office number of meetings attendedBoard audit/risk remuneration nomination Board audit/risk remuneration nomination

N.T. Sibley 5 4 2 – 5 4 2 –J. Nel 5 – – – 5 – – –D.R. Dix 5 4 2 – 5 4 2 –G.E Haslam 5 4 2 2 5 4 2 2T. Freshwater 5 2 – 2 5 2 – 2K. Morna 5 4 – 2 4 4 – 2Z. Mankazana 5 – 2 – 4 – 2 –S. de Bruyn Sebotsa 2 – – 2 2 – – 2S.A. Murray 2 – – – 2 – – –Sir W. Purves 3 2 – – 3 2 – –

(1) On-mine EBITDA has been provided to enable normal mining industry comparison and assists users in understanding on-mine cash flows. The on-mine EBITDA has not been audited and reconciles to the gross profit/(loss) in the statement of comprehensive income as follows:

2013 2012$’000 $’000

Gross profit/(loss) 12,738 (45,433)

Interest income (6,361) (9,137)

Depreciation and amortisation 51,277 65,746

Foreign exchange gain 12,816 17,855

On-mine EBITDA 70,470 29,031

(2) Refer to Note 9(d)

directors’ and officers’ insUranceDuring the year, the parent entity has paid an insurance premium in respect of a contract insuring against liability of current directors and officers. The directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’ and officers’ liability insurance contract, as such disclosure is prohibited under the terms of the contract.

going concernThe directors are satisfied that the Company has adequate financial resources to continue in operational existence for the foreseeable future. The financial statements have been prepared on the going concern basis.

Signed in accordance with a resolution of the directors.

Jean NelDirector27 September 2013

meetings of directorsThe number of meetings of the board of directors of the parent entity held during the year ended 30 June 2013 and the number of meetings attended by each director are tabled below.


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The Directors of Aquarius Platinum Limited present the Remuneration Report for the Group for the financial year ended 30 June 2013.

The Remuneration Committee (the Committee) has been established by the Board of Directors (the Board) to assist the Board by reviewing and providing recommendations on remuneration arrangements for the directors and executive management. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on an annual basis by reference to industry and market conditions. In determining the nature and amount of officers’ emoluments, the Board takes into consideration the Company’s financial and operational performance.

During the financial year the Remuneration Committee comprised four non-executive directors, the majority of whom were independent. None of the members of the Committee participated in any bonus scheme, long term incentive, pension or other form of remuneration other than the fees disclosed below. There is no actual or potential conflict of interest arising from the other directorships held by members of the Committee. The Committee met twice during the year and was supported by the Company Secretary who also acts as secretary to the Committee.

The responsibilities of the Committee include:

• framework of remuneration for the Company and in particular the executive team;

• remuneration of executive director;

• make recommendations to the Board on the fees offered to the non-executive directors;

• the adoption and implementation of equity-based incentive plans and other employee benefit programs; and

• the Company’s recruitment, retention, termination and superannuation policies.

matters considered by tHe committeeThe Committee considered the following items during the year:

• review of executive director remuneration;

• structure of the share scheme arrangements for employees and the executive team;

• introduction of the new deferred bonus plan and the grant of awards under the plan; and

• annual bonus plan.

remUneration policy In developing its remuneration policy, the Committee has had regard to the fact that the business of the Company is operated in multi jurisdictions from both an operating and regulatory environment and in a market which requires very particular operational and managerial skills.

The principles underlying the structure and quantum of Directors’ and senior management remuneration are as follows:

• position remuneration packages to ensure that they remain competitive, taking account of all elements of remuneration and reflective of the performance of the Company to allow Aquarius to attract suitably talented and experienced directors and executives;

• use external benchmark data on a transparent and open basis using comparator groups that reflect the industry and size of the Company;

• divide variable components of senior management remuneration between short-term incentive payments and long-term incentive payments in a manner which allows immediate reward of positive achievements in growth and profitability, but reinforces the importance of running the business with long term strategic goals at the forefront of the decision process;

• provide long term incentives that align remuneration to the long term performance of the Company; and

• encourage executives, and in particular executive directors, to build and then maintain a meaningful shareholding in the Company.

remUneration of non-execUtiVe directorsNon-executive directors’ remuneration is reviewed annually by the full Board, taking into account the findings and recommendations of the Remuneration Committee. Non-executive director fees are benchmarked against the remuneration of non-executive directors serving on the Boards of comparable companies in terms of size, industry, and geography.

Non-executive directors receive fixed remuneration only, which comprises annual board fees and committee fees based on membership of the various committees of the Board. Remuneration is paid quarterly in arrears in cash.

There is no variable or other performance-related component to the remuneration structure for non-executive directors. There is no share-based payment plan.

No awards or options of any kind have been granted to non-executive directors. Non-executive fees were last reviewed in the 2011 financial year and no increases were made. Remuneration of non-executive directors during the year is set out in the table at the end of the Remuneration Report.

serVice agreement for execUtiVe directorAt the time of his appointment as Chief Executive Officer in November 2012, Mr Nel’s contractual arrangements were reviewed. The terms of Mr Nel’s revised contract are in line with his previous contract as Commercial Director of the Group and no increase in salary was sought. Mr Nel’s contract provides for an incentive bonus up to a maximum of 100% of annual salary. The grant of a bonus is subject to the discretion of the Remuneration Committee and is based on bonus parameters determined by the Remuneration Committee. Mr Nel’s contract provides for 12 months’ notice by either party to terminate the contract.

REMUnERATIOn REPORT

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remUneration – components

BASe SAlARIeSBase salaries are reviewed each year following the release of the Group’s annual results. Any adjustments to the base salary become effective on 1 January. The reviews take into consideration sector dynamics, peer group analysis and general market conditions.

ANNuAl BoNuS The Company has a bonus scheme based on Company and individual performance. The maximum amount payable under the bonus plan is 100% of base salary. The bonus plan is designed to encourage and reward the delivery of operational performance. The Company targets are aimed at encouraging and rewarding achievement of both operational and financial targets at organisational level with performance indicators such as ounces produced, cost per ounce and safety being key. The grant of a bonus is subject to the discretion of the Remuneration Committee.

loNG-TeRM INCeNTIVe PlANSLong-term incentive plans take the form of share based incentives that form part of the long-term component of executives remuneration. The Remuneration Committee has approved two share plans as part of the Group’s Long-Term Incentive Plan Strategy. These are:

1. Aquarius Director/Employee Share Plan (ADESP)

2. Employee Retention Share Scheme (ERSS)

Aquarius director/employee Share PlanThe Aquarius Director/Employee Share Plan was established to provide the long term incentive portion of executive remuneration. It is designed to retain the services of key executives and to ensure that a portion of executive remuneration is directly aligned with the long term strategic goals of the Company and shareholder value. The ADESP has been in operation for five years. During the five years ended 30 June 2013, 1,833,894 shares have been purchased in the ADESP and 1,377,500 shares have been issued to executive directors and key employees of the Company. Details of shares issued to directors are disclosed in the table at the end of the Remuneration Report.

Terms of the allocation:

a) Shares are issued at the discretion of the Remuneration Committee.

b) The ADESP is only available to executive directors and key executives who do not participate in the Employee Retention Share Scheme.

c) The estimated aggregate number of shares required for the participants is acquired by the Company on the open market from time to time at the discretion of the Remuneration Committee and retained in a treasury pool pending allocation pursuant to the directive of the Remuneration Committee.

d) To qualify, participants need to be in the employment of the Group at 30 June of each determinant year.

elements of execUtiVe remUnerationDuring the year the Remuneration Committee reviewed the group’s remuneration policies and put in place processes to formalise the short term and long term elements of executive director’s and key employees’ remuneration. These elements were designed to ensure that remuneration was more closely aligned to the business performance of the group.

In developing remuneration packages for executive directors (CEO) and senior executives the following rational is adopted.

remuneration element Driving factors Details/Methodology

Base pay

Base pay to be set competitively so as to allow the motivation and retention of executives.

• Role requirements/technical skill sets

• Geographic and industry standards

• Value potential in role

Market-benchmarking for median salaries.

Review is conducted following release to the market of full year results.

Reviews take effect 1 January. Annual bonus

To provide a reward for short-term performance.

• Market practices – geographic and industry standards

• Degree of value creation potential through outperformance

Performance criteria is set at the beginning of the year. It is based on aspects of operational performance as approved by the Remuneration Committee. These include safety and operational performance measured against budget.

long-term incentive

To link an executives interest to the longer term share performance.

• Direct link between business performance and remuneration

• Additional retention element

• Reward specific one-off major value creation

During the year the Key Skills Retention Scheme, which formed part of the group’s long-term retention program, was abolished and replaced by the Employee Retention Share Scheme. The Employee Retention Share Scheme is designed to retain and incentivise senior executives and managers deemed key to the rollout of the group’s business plan.

Share ownership To encourage ownership of shares and thereby create a link of interest between shareholder and executive.

Although the Company has no formal policy, executive directors are encouraged, over time, to acquire shares in the Company.


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REMUnERATIOn REPORT CONTINUED

e) Shares awarded are subject to continued employment (50% of the shares awarded) and completion of an annual performance review for each financial year (50% of the shares issued). This review shall be performed upon release of the full year results to the market.

f) Shares awarded vest in tranches covering a specific number of years as determined by the Remuneration Committee.

employee Retention Share SchemeDuring the year the Key Skills Retention Scheme which formed part of the group’s long term retention program was suspended and replaced by the Employee Retention Share Scheme. The Board approved the establishment of the ERSS with effect from 1 July 2012.

The ERSS was designed to retain and incentivise senior executives and managers deemed key to the rollout of the Group’s revised business plans in South Africa which included:

• successful transition to the Owner Operator model;

• implementation of the revised mining support system;

• management of the care and maintenance projects; and

• returning the South African operating business to profitability.

Terms of the allocation:

a) The grant of the shares is a long-term incentive plan to cover three years.

b) The ERSS is only available to senior management who do not participate in the Aquarius Director/Employee Share Plan.

c) The estimated aggregate number of shares required for the participants is acquired by the company on the open market (JSE) on a piecemeal basis and retained in a treasury pool until allocation each year.

d) To qualify, participants need to be in the employment of the Group at 30 June of each determinant year. Shares awarded each year comprise a long term incentive portion and a short term incentive portion which is determined based on the safety, production, financial and transformation performance of the company at the end of each financial year.

No awards have been granted under the ERSS during the current year.

directors’ and execUtiVes’ emolUmentsDetails of the nature and amount of each element of the emolument of each director of the Group and the other key management personnel during the financial year are shown in the table below. The Group operates in an industry that has a limited number of participants, is under constant pressure from skills shortages and is exposed to a high level of staff poaching. For these reasons, remuneration of key management personnel is shown in aggregate. Refer also to Note 32 – Share-based payment plans and Note 33 – Related party disclosures for participation by the directors and key management personnel in the Company’s Share Plan and Option Plan.

short-term benefitsPost-employment

benefitsshare-based

payments

nameBoard fee

$committee fee

$Base salary

$Bonus

$

superannuation/ex gratia

$

options/shares

$Total

$

N.T. Sibley 220,000 – – – – – 220,000J. Nel – – 601,055 19,375 15,137 303,788 (a) 939,355S.A. Murray – – 1,046,415 623,603 (d) 399,690 (c) 377,397 (b) 2,447,105Sir W. Purves 33,334 10,000 – – – – 43,334D.R. Dix 100,000 20,000 – – – – 120,000G.E. Haslam 100,000 26,000 – – – – 126,000T. Freshwater 100,000 18,125 – – – – 118,125K. Morna 100,000 12,500 – – – – 112,500Z. Mankazana 100,000 7,500 – – – – 107,500S. de Bruyn Sebotsa 41,667 5,000 – – – – 46,667

795,001 99,125 1,647,470 642,978 414,827 681,185 4,280,586Other key management personnel – – 2,114,593 240,614 141,529 206,010 2,702,746

(a) Represents 500,000 shares granted pursuant to Aquarius’ long term incentive share plan (ADESP) at $0.61 per share(b) Represents shares granted pursuant to Aquarius’ long term incentive share plan (ADESP) in two tranches – 250,000 shares at $0.66 per share and 250,000

shares at $0.85 cents per share(c) Superannuation/ex gratia includes $319,210 paid out following resignation which took effect on 31 March 2013(d) Relates to the previous financial year ended 30 June 2012

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The Board of Directors of Aquarius Platinum is committed to the principles of good corporate governance and aims to achieve the highest standards and best practice in its overall performance.

In accordance with the Australian Securities Exchange Corporate Governance Council’s (the Council’s) Corporate Governance Principles & Recommendations, the UK Corporate Governance Code, the South African King Code of Governance Principles (King III), collectively (the Recommendations), it has established systems of accountability and control through its corporate governance framework as outlined in its corporate governance statement.

The Board is conscious that the corporate governance environment is constantly evolving and the charters and policies under which it operates its business will continue to be monitored and amended. The Company will disclose the extent to which it has followed the guidelines and any reasons for departure from these. The charters or their summaries referred to in the following statement are available in the Corporate Governance section on the website at www.aquariusplatinum.com.

board of directorsSTRuCTuRe oF The BoARdThe bye-laws of the Company determine that the Board consists of not less than two and no more than nine directors. At the date of this report, the Board is comprised of eight directors, seven of whom are non-executive directors, including the Chairman, Mr Nicholas Sibley, and one executive director, Mr Jean Nel, Chief Executive Officer.

The names of the current directors, their relevant qualifications and experience are set out in the Directors’ Report within this Annual Report. Their status as non-executive, executive or independent directors and tenure on the Board is set out in the table below.

RoleS ANd ReSPoNSIBIlITIeS oF The BoARdThe Board is responsible for the overall effective management of the Group. It seeks to ensure that its activities conform to the regulatory and ethical requirements of its business affairs by establishing policies and controls to monitor the Group’s long-term strategic direction and financial decision making. The Board aims to create sustainable value for shareholders and act in the best interests of its

stakeholders, including employees, suppliers and the communities in which it operates. The schedule of matters specifically reserved for decision by the full Board is set out in Appendix One to the Board Charter and is available on the Company’s website.

The Board is governed by a Charter which establishes guidelines to ensure its members act in the best interests of the Company. A summary of the Charter can be found on the website at www.aquariusplatinum.com.

The division of responsibilities between the Chairman and executive management, led by the Chief Executive Officer, are separate and clearly defined below:

• The Chairman, Mr Nicholas Sibley, is a non-executive independent director. He is responsible for leadership of the Board ensuring its members receive accurate, timely and clear information in order to facilitate effectiveness of its role. He sets the Board’s agenda, conducts its meetings and facilitates effective communication with shareholders.

• The Chief Executive Officer and Managing Director, Mr Jean Nel, has responsibility for the management of the Group and leads executive management. He has been delegated responsibility by the Board for the day-to-day operation and administration of the Company. The Chief Executive Officer is assisted in managing the business of the Group by the Executive Committee and the Board of Aquarius Platinum (South Africa) (Pty) Ltd. Mr Nel represents the Group’s interests as a director of the Mimosa Group of companies which owns the Mimosa Platinum Mine in Zimbabwe.

APPoINTMeNTS To The BoARdThe Company’s bye-laws authorise the Board to appoint new Directors. The Board of the Company has created a Nominations Committee to ensure a rigorous and structured process for appointing new Directors to the Board.

New Board members will be sought who possess the particular skills, experience, independence, knowledge and diversity that will best complement Board effectiveness at the time. In considering overall Board balance, the Nomination Committee will give due consideration to the value of diversity of backgrounds, skills and experiences among the members. At times, an external search firm may be used to advise and/or assist in identifying appropriate candidates.

cORPORATE GOvERnAncE sTATEMEnT

Board structure

name of director in office at the date of this report Date appointed to office executive/ non-executive independent

N.T. Sibley – Chairman 26 October 1999 Non-executive YesJ. Nel – Chief Executive Officer 3 April 2012 Executive NoD.R. Dix 31 March 2004 Non-executive YesG.E. Haslam 1 May 2004 Non-executive YesT. Freshwater 9 August 2006 Non-executive YesK. Morna 6 February 2007 Non-executive NoZ. Mankazana 6 November 2008 Non-executive NoS. de Bruyn Sebotsa 6 February 2013 Non-executive Yes


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cORPORATE GOvERnAncE sTATEMEnT CONTINUED

dIReCToRS’ ReTIReMeNT ANd Re-eleCTIoN Aquarius’ bye-laws determine that at each Annual General Meeting, at least one third of the Board are retired by rotation, therefore holding their positions for no longer than three years. This period of time provides continuity. Non-executive directors are appointed for a three-year term and may be invited to seek reappointment. A director appointed during the year is subject for election at the forthcoming Annual General Meeting. Pursuant to the bye-laws of the Company, the Chief Executive Officer is not subject to retirement by rotation.

dIReCToR INdePeNdeNCeThe Board works to ensure the majority of directors are non-executive, therefore bringing independence, objectivity and a broad range of expertise to the Group.

To facilitate their decision making, each director has the right to seek independent professional advice on matters relating to their position as a director or committee member of the Company at the Company’s expense, subject to prior approval of the Chairman, which shall not be unreasonably withheld.

Independence of directors in essence means those directors independent of management and free of any business or other relationship that could, or could reasonably be perceived to, materially interfere with the exercise of unfettered and independent judgement.

In line with the Recommendations, the Board has accepted the guidelines outlined below in determining the independence of non-executive directors. In accordance with these guidelines, all directors, with the exception of Mr Jean Nel as Chief Executive Officer of the Company, Mr Kofi Morna and Mr Zwelakhe Mankazana, who represent the Savannah Consortium’s BEE interests, are deemed independent.

The Board has accepted the following definition of an independent director.

An independent director is someone who is not a member of management, is a non-executive director and who:

a) is not a substantial shareholder (5%) of the Company or an officer of, or otherwise associated directly with a substantial shareholder of the Company;

b) within the last three years has not been employed in an executive capacity by the Company or another Group member, or been a director after ceasing to hold any such employment;

c) within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another Group member, or an employee materially associated with the service provided;

d) is not a material supplier or customer of the Company or other Group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; and

e) has no material contractual relationship with the Company or another Group member other than as a director of the Company.

BoARd eVAluATIoNThe Nomination Committee is responsible for determining and overseeing the process for evaluating the performance of the Board and each Director in accordance with the Company’s Policy of Evaluation of the Board. This process includes individual interviews conducted by the Senior Independent Director with each Board member. Evaluations are conducted on an annual basis and cover:

• Board performance against the requirements of the Board Charter;

• Committee performance against their respective Charters;

• the performance of the Chairman, both in his capacity as Chairman and as an individual member of the Board; and

• the performance of individual directors.

Questionnaires are completed by each Director. The questionnaires are appropriate in scope and content to effectively review the performance of the Board and each of its Committees against the requirement of their respective Charters. The questionnaires also cover individual Director performance. The questionnaires are completed by each Director annually and the responses compiled by the Nomination Committee and reported to the Board as a basis for consideration of the Board and each Committee’s performance.

MeeTINGS oF The BoARdIn order to retain full and effective control over the Company and monitor the executive management team, the Board meets regularly and at least on a quarterly basis. Details of directors’ attendance at these meetings are set out in the Directors’ Report. An agenda set by the Chairman and briefing materials are distributed to each director approximately seven days prior to each meeting to ensure each director is familiar with the scheduled matters of business. All directors may add a matter to the agenda or raise matters not on the agenda at any Board meeting. Key executives and senior management of the Company contribute to board papers and are invited to attend Board meetings from time to time.

SeNIoR INdePeNdeNT NoN-exeCuTIVe dIReCToRThe senior independent non-executive director, Mr Tim Freshwater, is appointed by the Board. The senior independent director’s role is primarily to provide a sounding board for the Chairman and to serve as an intermediary for the other directors when necessary.

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SuCCeSSIoN PlANNINGThe Board brings the range of skills, knowledge, international experience and expertise necessary to govern the Group, but it is aware of the need to ensure processes are in place to assist with succession planning, not only for the Board, but within senior management. The Board periodically assesses its balance of skills and those of the Group in order to maintain an appropriate balance within the Company.

INduCTIoN ANd eduCATIoNIn order to assist directors in fulfilling their duties and responsibilities within the Company, a comprehensive induction programme is provided, including meetings with other Board members, the executive team, senior management and visits to the operating sites of the Company in South Africa and Zimbabwe. The program enables the new appointees to gain an understanding of the Company’s financial, strategic, operational and risk management position at all times. Full access to all documentation pertaining to the Company is provided.

company secretaryThe Company Secretary, Mr Willi Boehm, is responsible for supporting the effectiveness of the Board by monitoring that Board policy and procedures are complied with, coordinating the flow of information within the Company and the completion and despatch of briefing materials for the Board. The Company Secretary is accountable to the Board on all governance matters. All directors have access to the services of the Company Secretary. The appointment and removal of the Company Secretary is a matter for the Board as a whole.

code of condUctThe Aquarius Code of Conduct has been developed by the Board to provide a framework for all employees to conduct the business of the Company in an ethical and legal manner. The Board believes it is important that the Company maintains its obligations to shareholders and stakeholders.

There are areas in which the Company must develop detailed policies in accordance with the requirements of local authorities and comply with local laws. The Code of Conduct stands as a set of principles developed by the Board to guide all employees to act with integrity and make informed choices when communicating or acting on behalf of the Company.

The Board and senior executives of the Company have a clear commitment to the Code of Conduct. A summary of the Code of Conduct is available at www.aquariusplatinum.com.

diVersity policyThe Diversity Policy outlines the Company’s commitment to create a work environment that is fair and inclusive. Diversity within the Group encompasses but is not limited to gender, age, ethnicity and cultural background. Aquarius employment policies and procedures are guided by the Mineral and Petroleum Resources Development Act no. 28 of 2002 and the accompanying Broad-Based Socio-Economic Charter for the South African Mining Industry. The Board believes that diversity contributes to its business and benefits shareholders and stakeholders. The Board has responsibility for oversight of this Policy and it is reviewed on an annual basis. More information can be found in the Sustainable Development Report on the website at www.aquariusplatinum.com.

secUrities trading policyThe Board has adopted a policy covering dealings in securities by directors and relevant employees. The policy is designed to reinforce to shareholders, customers and the international community that Aquarius’ directors and relevant employees are expected to comply with the law and best practice recommendations with regard to dealing in securities of the Company.

In addition to the Australian Securities Exchange Listing Rules, a director and relevant employees must comply with the Model Code on directors’ dealings in securities, as set out in Annexure 1 to Listing Rule 9 of the Rules of the United Kingdom Listing Authority, a copy of which can be found on the Aquarius website at www.aquariusplatinum.com.

In addition to restrictions on dealing in closed periods, a director and relevant employees must not deal in any securities of the Company on considerations of a short-term nature and must take reasonable steps to prevent any dealings by, or on behalf of, any person connected with him in any securities of the Company on consideration of a short-term nature. In line with the listing rules of the Australian Securities Exchange, the UK Listing Authority and the Johannesburg Stock Exchange South Africa, all dealings by directors in the securities of the Company are announced to the market.

committees of tHe boardThe Board has established four standing committees to assist in the execution of its responsibilities: the Audit/Risk Committee, the Remuneration Committee, the Nomination Committee and the Social & Ethics Committee. The Social & Ethics Committee was established at AQPSA level to manage the Group’s South African obligations with respect to the Companies Act (no 71 of 2008) of South Africa. Other committees are formed from time to time to deal with specific matters.


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In line with best practice, each of the committees operates under a Charter approved by the Board detailing their role, structure, responsibilities and membership requirements. Each of these Charters is reviewed annually by the Board and the respective committee. Summaries of the Remuneration Committee, Nomination Committee, Social & Ethics Committee and a complete Audit/Risk Committee Charter can be found on the Aquarius website at www.aquariusplatinum.com.

AudIT/RISK CoMMITTeeThe Audit/Risk Committee (the Committee) assists the Board of Aquarius in fulfilling its corporate governance and oversight responsibilities in relation to the Company’s financial reports and financial reporting process, internal control structure, risk management systems (financial and non-financial) and the external audit process. The Committee is governed by a charter approved by the Board.

The Committee consists of:

• five members;

• only non-executive directors;

• a majority of independent directors; and

• an independent chairperson, who shall be nominated by the Board from time to time but who shall not be the chairperson of the Board.

The members of the Committee at the date of this report are as follows:

• Mr David Dix (Chairman)

• Mr Tim Freshwater

• Mr Edward Haslam

• Mr Kofi Morna

• Mr Nicholas Sibley

Qualifications of Audit/Risk Committee members:Mr Dix was appointed to the position as Chairman of the Committee following the retirement of Sir William Purves in November 2012. Mr Dix’s background is in economics, law and taxation and he is a Barrister and Solicitor in the High Court of Australia. He has held various positions with Shell Australia Limited and worked for 16 years in Corporate Advisory at both Macquarie Bank Limited and UBS AG specialising in the mining industry, including Head of Resources for Asia Pacific and in London as Head of Mining. Mr Dix is Non-Executive Chairman of Troy Resources NL.

Mr Freshwater is a solicitor in the UK and Hong Kong and has been involved in Asian markets for over 35 years. He is a director

of a number of companies, including Swire Pacific Limited, Chong Hing Bank Limited, Cosco Pacific Limited, Savills PLC, Hong Kong Exchanges and Clearing Limited. Mr Freshwater was appointed to the Audit/Risk Committee on 6 February 2013.

Mr Haslam is the former Chief Executive of Lonmin plc. He joined Lonmin in 1981, was appointed a director in 1999 and Chief Executive Officer in 2000. He retired from Lonmin in April 2004. Mr Haslam is a Director of the Finnish nickel mining company Talvivaara Mining Company Plc. In 2011 he was appointed Senior Independent Director of London and Toronto listed gold miner Centamin Egypt Limited.

Mr Morna is an Executive Director of Savannah Resources (Pty) Limited, the lead investor in the Savannah Consortium, Aquarius Platinum’s BEE partner. Prior to joining Savannah Resources, Mr Morna worked with the International Finance Corporation as an Investment Officer, Gemini Consulting as a Senior Management Consultant and Schlumberger Oilfield Services as a Field Engineer. Mr Morna holds an MBA from the London Business School and a BSc from Princeton University in the United States. He is currently a director of Mkhombi Holdings, Hall Core Drilling, AIM and ASX listed Ferrum Crescent and a number of private mining exploration and beneficiation companies.

Mr Sibley is a Fellow of the Institute of Chartered Accountants in England and Wales, a director of Richland Resources Ltd, Wah Kwong Maritime Transport Holdings Ltd and a quoted investment company. He was formerly Deputy Chairman of Wheelock Capital from 1994 to 1997, as well as Executive Chairman of Barclays de Zoete Wedd (Asia Pacific) Limited from 1989 to 1993. Mr Sibley is a former director of Barclays de Zoete Wedd Holdings Ltd.

The Board deems all members of the Committee have the relevant experience and understanding of accounting, financial issues and the mining industry to enable them to effectively oversee audit procedures.

The Committee reviews the performance of the external auditors on an annual basis and meets with them at least twice a year to:

• review the results and findings of the audit at year end and half year end and recommend their acceptance or otherwise to the Board;

• review the results and findings of the audit, the appropriateness of provisions and estimates included in the financial results, the adequacy of accounting and financial controls, and to obtain feedback on the implementation of recommendations made; and

• review the annual audit plan and audit fee for the audit of Aquarius and its controlled entities.

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The Committee receives regular reports from the external auditor on the critical policies and practices of the Company, and all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management.

The Committee assesses the Company’s structure, business and controls annually. It ensures the Board is made aware of internal control practices, risk management and compliance matters which may significantly impact upon the Company in a timely manner.

The Committee meets when deemed necessary and at least twice a year. The Company Secretary acts as secretary of the Committee and distributes minutes to all Board members.

Details of attendance at Committee Meetings are set out in the Directors’ Report.

ReMuNeRATIoN CoMMITTee The members of the Remuneration Committee (the Committee) at the date of this report are:

• Mr Edward Haslam (Chairman)

• Mr Nicholas Sibley

• Mr David Dix

• Mr Zwelakhe Mankazana

The Committee is governed by a charter approved by the Board, a summary of which is available on the Company’s website at www.aquariusplatinum.com. The Board deem all members of the Committee have the relevant experience and understanding to enable them to effectively oversee their responsibilities. The members of the Committee are non-executive directors the majority of whom are considered independent.

The Committee reviews compensation arrangements for the directors and the executive team. The Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality executive team.

In carrying out its responsibilities, the Committee is authorised by the Board to secure the attendance of any person with relevant experience and expertise at Committee meetings, if it considers their attendance to be appropriate and to engage, at the Company’s expense, outside legal or other professional advice or assistance on any matters within its charter or terms of reference.

The Committee meets as necessary, but must meet at least once a year. The Company Secretary acts as secretary of the meetings and

distributes minutes to all Board members. Details of attendance at Committee Meetings are set out in the Directors’ Report.

NoMINATIoN CoMMITTeeThe Nomination Committee (the Committee) formerly comprised the full Board of the Company. In November 2012 the Committee was restructured to comprise a five member Committee as well as approve a revised Committee Charter which sets out the process for selection, appointment and re-election of Directors. The members of the Committee at the date of this report are:

• Ms Sonja de Bruyn Sebotsa (Chairman)

• Mr Tim Freshwater

• Mr Ed Haslam

• Mr Kofi Morna

• Mr Willi Boehm

The Committee is governed by a Charter and will have reference to the following Company policies in its activities:

• the policy for selection, appointment and re-election of directors; and

• the policy for evaluation of the Board.

The Board deem all members of the Committee have the relevant experience and understanding to enable them to effectively oversee their responsibilities. The members of the Committee comprise a majority of non-executive directors the majority of whom are considered independent.

If the appointment of a new director is required to fill a vacancy on the Board, or to complement the existing Board, a range of candidates are considered. Qualifications of the proposed director are assessed by the Committee to determine if their skills and experience will enhance the Board and whether they will have the availability to commit to the Board’s activities. A director appointed during the year is subject for election at the forthcoming Annual General Meeting. The Committee may at times take into consideration the advice of external consultants to assist with this process.

New directors are provided with a letter to formalise their appointment. This sets out the Company’s expectations once they accept the position, their duties, rights, responsibilities and policies of the Company.

Meetings take place as often as necessary, but the Committee must meet at least once a year. The Company Secretary acts as secretary of the meetings and distributes minutes to all Board members.

Appointments are referred to shareholders at the next available opportunity for election in general meeting.


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SoCIAl & eThICS CoMMITTeeWhilst the Board monitors adherence to social and ethical issues of the Company via its various committees and governance policies, a specific Social & Ethics Committee has been established at its principal subsidiary, AQPSA, to assist the Board in fulfilling its corporate governance and oversight responsibilities in relation to the Company’s South African obligations as required by the Companies Act (no 71 of 2008) of South Africa.

This Committee is governed by a charter, a summary of which is on the company’s website. The Committee consists of a minimum of three members, one of which must be a non-executive director.

The members of the Committee at the date of this report are as follows:

• Ms A Kawa (Chairman)

• Ms S de Bruyn Sebotsa

• Mr C Kendall

• Mr J Nel

• Mr R Schroder

The aims and objectives of the Committee are to monitor the Company’s activities, having regard to any relevant legislation, other legal requirements or prevailing codes of best practice, in relation to:

1.1 Social and economic development, including the Company’s standing in terms of the goals and purposes of:

• the United Nations Global Compact’s Ten Principles;

• the OECD recommendations on corruption prevention;

• the Employment Equity Act;

• the Mineral and Petroleum Resources Development Act 2002 (South Africa); and

• the Mining Charter.

1.2 Good corporate citizenship, including the Company’s:

• promotion of equality, prevention of unfair discrimination, elimination of corruption and ethics performance in general;

• contribution to development of the communities in which its activities are predominately conducted; and

• record of sponsorships, donations and charitable giving.

1.3 The impact of the company’s activities on the environment and the health and safety of its employees and surrounding communities.

1.4 Labour and employment, including:

• the Company’s standing in terms of the International Labour Organisation Protocol on decent work and working conditions; and

• the Company’s employment relationships, and its contribution toward the educational development of its employees.

continUoUs disclosUreThe Company has in place a Continuous Disclosure Policy, a summary of which is available on the website at www.aquariusplatinum.com. It outlines the Company’s commitment to disclosure, ensuring that timely and accurate information is provided to all shareholders and stakeholders. The Company Secretary is the nominated Communication Officer and is responsible for liaising with the Board to ensure that the Company complies with its continuous disclosure requirements.

A three member Disclosure Committee has been formed comprising the Chief Executive Officer, Mr Jean Nel, the Company Secretary, Mr Willi Boehm, and any one non-executive director. The Disclosure Committee is responsible for overseeing and coordinating the disclosure of information and announcements to the regulatory authorities, analysts, brokers, shareholders, the media and the public.

The Disclosure Committee regularly reviews the Company’s compliance with its continuous disclosure obligations.

commUnications WitH sHareHoldersShareholder communication is given high priority by the Company. In addition to statutory requirements, such as the Annual Report and Financial Statements for the half and full year, Aquarius Platinum maintains a website which contains announcements and quarterly reports which have been released to the listing authorities – the ASX, LSE and the JSE, and forwarded to the US Securities and Exchange Commission (SEC). Meetings are held with institutional shareholders when this is believed to be in the Company’s best interest but no

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information is shared which is not available to shareholders generally. Presentations that senior executives may deliver to conferences or analysts are also placed on the website as they occur.

Shareholders are able to contact the Company via the email address at [email protected]. Through the website, shareholders are also given the opportunity to provide an email address by which they are able to receive these documents. The Chief Executive Officer hosts webcasts for the half year and full year results and notification of these is provided on the Company’s website.

meetingsThe Company’s Notice of Meeting materials are distributed to shareholders with an accompanying explanatory memorandum. These documents present the business of the meeting clearly and concisely and are presented in a manner that will not mislead shareholders or the market as a whole. The Notice is despatched to shareholders in a timely manner providing at least 21 days notice pursuant to the bye-laws of the Company. Each notice includes the business of the meeting, details of the location, time and date of the meeting and proxy voting instructions.

Upon release of the Notice of Meeting and Explanatory Memorandum to the ASX, LSE and JSE, a full text of the Notice of Meeting and Explanatory Memorandums is placed on the website at www.aquariusplatinum.com for shareholders and other market participants. Notification of the documents release is provided on the Company’s website.

risK managementThe Company has established policies on risk oversight and management. The Board is committed to monitoring, identifying and managing the material risks of the business activities across the Group. The Company has risk registers across its operations that are updated by the director responsible for risk on a quarterly basis. The Audit Committee reviews the risk registers on a quarterly basis and the full Board of Aquarius annually. This ensures the Board is made aware of internal control practices, risk management and compliance matters which may significantly impact upon the Company in a timely manner.

The registers set out risks that have been identified. The risks are categorised based on the severity of risk and the probability of the event occurring, and subsequently assessed to ensure adequate control measures are identified to ensure all risks are appropriately mitigated. Further information on risk management is located in the Sustainable Development Report available on the website at www.aquariusplatinum.com.

corporate goVernance complianceNoTIFICATIoN oF dePARTuReAudit Committee membersThe Company’s Audit Committee (Committee) comprises five members. Four of the members (Mr Dix, Mr Freshwater, Mr Haslam and Mr Sibley) are independent non-executive directors of the Company. Mr Morna, whilst being a non-executive director, is not considered an independent director of the Company.

Whilst the above membership of the Committee complies with the Australian Securities Exchange Corporate Governance Guidance and the South African King Code of Governance Principles, it does not comply with the UK’s Corporate Governance Code provision C3.1 which recommends that all Committee members should be independent non-executive directors.

Mr Morna was appointed in February 2010 to further strengthen the Committee, in view of his experience and understanding of mining and finance. The Board has noted provision C3.1 of the UK’s Corporate Governance Code in conjunction with the governance guidance applicable in Australia and South Africa and believes that Mr. Morna’s appointment adds value to the Committee.


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Statement of comprehenSive income for the year ended 30 June 2013

2013 2012

Note $’000 $’000

Revenue 7 370,548 485,736Cost of sales 7 (357,810) (531,169)Gross profit/(loss) 12,738 (45,433)Other income 7 278 2,076Administrative costs 7 (12,924) (11,950)Foreign exchange loss (19,446) (95,001)Finance costs (30,817) (34,674)Impairment losses 7 (225,966) (3,983)Closure, transition and rehabilitation costs 7 (54,538) –Community share ownership trust (1,500) –Loss before income tax (332,175) (188,965)Income tax benefit 8 44,262 30,678Net loss for the year (287,913) (158,287)Other comprehensive income that may be recycled to profit or lossForeign currency translation adjustments (93,697) (4,817)Total other comprehensive loss (93,697) (4,817)Total comprehensive loss (381,610) (163,104)

Loss is attributable to: (287,207) (158,227)Equity holders of Aquarius Platinum Limited (706) (60)Non-controlling interests (287,913) (158,287)Total comprehensive loss is attributable to:Equity holders of Aquarius Platinum Limited (380,974) (163,050)Non-controlling interests (636) (54)

(381,610) (163,104)Earnings per shareBasic loss per share (cents per share) 9 (61.13) (33.77)Diluted loss per share (cents per share) 9 (61.13) (33.77)

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Statement of financial poSition as at 30 June 2013

2013 2012

Note $’000 $’000

AssetsNon-current assetsReceivables 11 60,700 67,253Available-for-sale investments 12 3,433 2,785Property, plant and equipment 13 261,222 276,195Mining assets 14 160,795 437,574Restricted cash in environmental trusts 15 16,712 18,055Intangible asset and goodwill 16 59,449 87,882Total non-current assets 562,311 889,744Current assetsCash and cash equivalents 18 102,932 180,088Trade and other receivables 19 58,424 87,100Inventories 20 40,990 44,258Income tax receivable 8 264 –Total current assets 202,610 311,446Total assets 764,921 1,201,190

Equity and liabilitiesCapital and reservesIssued capital 27 24,370 23,516Unissued shares 27 – 2,436Treasury shares 28 (26,526) (18,128)Reserves 29 639,854 722,734Accumulated losses (347,402) (60,195)Total equity attributable to equity holders of Aquarius Platinum Limited 290,296 670,363Non-controlling interests 5,646 6,282Total equity 295,942 676,645Non-current liabilitiesPayables 21 5,563 4,204Interest bearing loans and borrowings 22 270,346 265,526Deferred tax liabilities 8 37,837 98,382Provisions 23 77,196 42,967Total non-current liabilities 390,942 411,079Current liabilitiesTrade and other payables 24 42,113 73,402Interest bearing loans and borrowings 25 31,269 38,195Income tax payable 8 – 815Provisions 26 4,655 1,054Total current liabilities 78,037 113,466Total liabilities 468,979 524,545Total equity and liabilities 764,921 1,201,190


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Statement of changeS in equity for the year ended 30 June 2013

Issue

d ca

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shar

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Total

$’000

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At 1

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2,43

6(1

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(361

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(60,

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670,

363

6,28

267

6,64

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ss fo

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––

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)(7

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––

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––

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907

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(26,

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1,03

0,78

3(9

2,32

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692

(361

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)62

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(347

,402

)29

0,29

65,

646

295,

942

At 1

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–(1

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Equi

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to

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s–

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––

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–1,

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(18,

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(18,

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–(1

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t 30

June

201

223

,516

2,43

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8,12

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1,44

046

692

(361

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)62

,666

(60,

195)

670,

363

6,28

267

6,64

5

54

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Statement of caSh flowS for the year ended 30 June 2013

2013 2012

Note $’000 $’000

Cash flows from operating activitiesReceipts from customers 392,373 538,331Payments to suppliers and employees (340,891) (515,724)Closure and transition costs (27,582) –Interest received 5,560 9,137Other income 252 1,231Income taxes paid (7,793) (10,705)Net cash from operating activities 21,919 22,270

Cash flows from investing activitiesPayments for property plant and equipment and mine development costs (54,359) (95,471)Proceeds from sale of property, plant and equipment 790 2,127Acquisition of Platinum Mile Resources net of cash acquired – (11,735)Refund/(payment) of deposit for mineral acquisition 30(d) 15,000 (15,000)Net cash used in investing activities (38,569) (120,079)

Cash flows from financing activitiesInterest and other finance costs paid (13,539) (14,438)Foreign exchange loss on currency contract (24,039) –Proceeds from borrowings – 14,873Repayment of borrowings (10,324) (7,498)Proceeds from issue of shares 9,305 226Purchase of shares by a controlled entity (9,305) –Repurchase of convertible bonds – (1,871)Purchase of shares reserved for share plan – (3,117)Dividends paid – (18,614)Net cash used in financing activities (47,902) (30,439)

Net decrease in cash held (64,552) (128,248)Cash and cash equivalents at the beginning of the financial year 180,088 328,083Net foreign exchange differences (12,604) (19,747)Cash and cash equivalents at the end of the financial year 18 102,932 180,088


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1. Corporate informationThe consolidated financial statements of Aquarius Platinum Limited (Aquarius or the Company) for the year ended 30 June 2013 were authorised for issue in accordance with a resolution of the directors on 27 September 2013. Aquarius Platinum Limited is a limited company incorporated and domiciled in Bermuda whose shares are publicly traded. The principal activities of the Group are described in the Directors’ Report.

2. Basis of preparationThe consolidated financial statements have been prepared under the historical cost accounting convention except for available-for-sale investments and derivative financial instruments that have been measured at fair value.

STATEmENT Of COmPLiANCEThe consolidated financial statements of Aquarius Platinum Limited and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The consolidated financial information is presented in US Dollars and has been rounded to the nearest thousand US Dollars unless otherwise stated.

BASiS Of CONSOLidATiON The consolidated financial statements comprise the accounts of Aquarius, the parent Company, and its controlled subsidiaries, after the elimination of all material intercompany balances and transactions.

Subsidiaries are consolidated from the date the parent entity obtains control and continue to be consolidated until such time as control ceases. Where there is a loss of control of a subsidiary, the consolidated accounts include the results for the part of the reporting period during which the parent entity had control. A list of subsidiaries appears in Note 33(a).

The accounts of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies which may exist.

3. Changes in aCCounting poliCies and disClosuresIn the current year, the Group has adopted all new and revised Standards and Interpretations issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretation Committee (IFRIC) of the IASB that are relevant to its operations and effective for the accounting periods beginning on or after 1 July 2012. The adoption of these new and revised Standards and Interpretations has not resulted in any changes to the Group’s accounting policies.

4. signifiCant aCCounting judgements and estimatesIn the process of applying the Group’s accounting policies, management has made the following judgements and estimations, which have the most significant effect on the amounts recognised in the financial statements. The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

• determination of mineral resources and ore reservesAquarius estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the ‘JORC code’). The information on mineral resources and ore reserves was prepared by or under the supervision of Competent Persons as defined in the JORC code.

There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated. Such changes in reserves could impact on depreciation and amortisation rates, asset carrying values, deferred stripping costs and provisions for decommissioning and restoration.

• impairment of capitalised exploration and evaluation expenditureThe future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

Factors which could impact the future recoverability include the level of proved and probable mineral reserves, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

noteS to the conSolidated financial StatementS for the year ended 30 June 2013

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To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the period in which this determination is made.

• impairment of capitalised mine development expenditure The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including the level of proved and probable mineral reserves. To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

In determining recoverable amount, future cash flows are based on estimates of the quantities of economically recoverable ore reserves and mineral resources for which there is a high degree of confidence of economic extraction, future production levels, future commodity prices and future cash costs of production.

• impairment of property, plant and equipment Property, plant and equipment are reviewed for impairment if there is any indication that the carrying amount may not be recoverable. Where a review for impairment is conducted, the recoverable amount is assessed by reference to the higher of value in use (being the net present value of expected future cash flows of the relevant cash generating unit) and fair value less costs to sell.

In determining value in use, future cash flows are based on estimates of the quantities of economically recoverable ore reserves and mineral resources for which there is a high degree of confidence of economic extraction, future production levels, future commodity prices and future cash costs of production.

Variations to the expected future cash flows, and the timing thereof, could result in significant changes to any impairment losses recognised, if any, which could in turn impact future financial results.

• impairment of intangible assetsThe Group determines whether goodwill is impaired at least on an annual basis or more frequently if an indication of impairment exists. This requires an estimation of the recoverable amount of the cash-generating units to which the goodwill is allocated.

For other intangible assets with limited lives, the Group determines whether the asset is impaired when an indication of impairment exists.

In determining recoverable amount, future cash flows are based on estimates of the quantities of economically recoverable ore reserves and mineral resources for which there is a high degree of confidence of economic extraction, future production levels, future commodity prices and future cash costs of production.

• Restoration provisions The Group records the present value of the estimated cost of restoring operating locations in the period in which the obligation arises, which is typically at the commencement of production. The nature of the restoration activities includes the removal of facilities, abandonment of mine sites and rehabilitation of the affected areas. In most instances this arises many years in the future. The application of this policy necessarily requires judgemental estimates and assumptions regarding the date of abandonment, future environmental legislation, the engineering methodology adopted, future technologies to be used and the asset specific discount rates used to determine the present value of these cash flows.

• Revenue recognitionThe accounting policy for sale of goods is set out in Note 5(h). The determination of revenue from the time of initial recognition of the sale on a provisional basis through to final pricing requires management to continuously re-estimate the fair value of the price adjustment feature. Management determines this with reference to estimated forward prices using consensus forecasts.

• Production start dateThe Group assesses the stage of each mine under construction to determine when a mine moves into the production stage. The criteria used to assess the start date are determined based on the unique nature of each mine construction project, such as the complexity of a plant and its location. The Group considers various relevant criteria to assess when the mine is substantially complete, including, but not limited to, the following:


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4. signifiCant aCCounting judgements and estimates (continued)

• Production start date (continued)• the level of capital expenditure compared to the construction cost estimates;

• completion of a reasonable period of testing of the mine plant and equipment;

• ability to produce product in saleable form (within specifications); and

• ability to sustain ongoing production of metal.

When a mine construction project moves into the production stage, the capitalisation of certain mine construction costs ceases and costs are either regarded as inventory or expensed, except for costs that qualify for capitalisation relating to mining asset additions or improvements, underground mine development or mineable reserve development. It is also at this point that depreciation/amortisation commences.

• inventoriesNet realisable value tests are performed at least annually and represent the estimated future sales price of the product based on prevailing spot metal prices at the reporting date, less estimated costs to complete production and bring the product to sale. Stockpile and concentrate tonnages are verified by periodic surveys.

5. signifiCant aCCounting poliCies(A) iNvESTmENTS ANd OThER fiNANCiAL ASSETSFinancial assets are classified as either financial assets at fair value through profit or loss, loans and receivables or available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year end.

All regular way purchases and sales of financial assets are recognised at the trade date i.e. the date the Group commits to purchase the asset.

The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the reporting date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using arm’s length market transactions, reference to the current market value of another instrument which is substantially the same, discounted cash flow analysis and option pricing models.

Available-for-sale financial assetsAvailable-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified as either financial assets at fair value through profit or loss, loans and receivables or held to maturity financial assets. After initial recognition, available-for sale financial assets are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the profit or loss.

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in income when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

(B) miNiNG ASSETSMining assets comprise exploration and evaluation, mineral properties acquired and mine development costs.

Exploration and evaluation expenditureExpenditure on exploration and evaluation is accounted for in accordance with the ‘area of interest’ method. Exploration and evaluation expenditure is capitalised provided the rights to tenure of the area of interest is current and either:

• the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or

• exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or relating to, the area of interest are continuing.

noteS to the conSolidated financial StatementS ContInued

for the year ended 30 June 2013

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When the technical feasibility and commercial viability of extracting a mineral resource has been demonstrated then any capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.

impairment of exploration and evaluation expenditureThe carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.

The recoverable amount of capitalised exploration and evaluation expenditure is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset.

An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount. Any impairment losses are recognised in the profit or loss.

mineral properties acquiredMineral properties acquired are recognised at cost. Once production commences these costs are amortised using the units-of-production method based on the estimated economically recoverable reserves to which they relate or are written off if the property is abandoned. Costs incurred to maintain production are expensed as incurred against the related production.

impairment of mineral properties acquiredThe carrying value of mineral properties acquired is assessed for impairment whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.

The recoverable amount of mineral properties acquired is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.


mine development expenditureMine development expenditure represents the costs incurred in preparing mines for production, and includes waste removal costs incurred before production commences. These costs are capitalised to the extent they are expected to be recouped through successful exploitation of the related mining leases. Once production commences, these costs are amortised using the units-of-production method based on the estimated economically recoverable reserves to which they relate or are written off if the mine property is abandoned. Costs incurred to maintain production are expensed as incurred against the related production.

impairment of mine development expenditureThe carrying value of capitalised mine development expenditure is assessed for impairment whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.

The recoverable amount of capitalised mine development expenditure is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.



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5. signifiCant aCCounting poliCies (continued)(C) dERECOGNiTiON Of fiNANCiAL ASSETS ANd LiABiLiTiESfinancial assetsA financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised where:

• the rights to receive cash flows from the asset have expired;

• the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or

• the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Where continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

financial liabilities A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

(d) imPAiRmENT Of fiNANCiAL ASSETSThe Group assesses at each reporting date whether a financial asset or group of financial assets is impaired.

Assets carried at amortised cost If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset shall be reduced either directly or through use of an allowance account. The amount of the loss shall be recognised in profit or loss.

The Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. If it is determined that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, the asset is included in a group of financial assets with similar credit risk characteristics and that group of financial assets is collectively assessed for impairment. Assets that are individually assessed for impairment and for which an impairment loss is or continues to be recognised are not included in a collective assessment of impairment.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subsequent reversal of an impairment loss is recognised in the profit or loss, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

Assets carried at cost If there is objective evidence that an impairment loss on an unquoted equity instrument is not carried at fair value because its fair value cannot be reliably measured, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Available-for-sale financial assets If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss, is transferred from equity to the profit or loss. Reversals in respect of equity instruments classified as available-for-sale are not recognised in profit. Reversals of impairment losses on debt instruments are reversed through profit or loss if the increase in fair value of the instrument can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.



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(E) fOREiGN CuRRENCiESThe consolidated financial statements are stated in US Dollars which is the Company’s functional and presentation currency. Each entity in the Group determines its own functional currency and items included in each entity are measured using that functional currency.

foreign currency transactionsTransactions in foreign currencies are recorded in the applicable functional currency at the rate of exchange ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. All exchange differences on monetary items are included in determining profit or loss. Non-monetary items are recorded in the applicable functional currency using the exchange rate at the date of the transaction.

Translation of financial reports of foreign operations The Mimosa Investments Limited Group financial statements incorporating its controlled entities in Zimbabwe, have been prepared using US Dollars as the functional currency. The functional currency of subsidiaries in South Africa is considered to be the South African Rand. The functional currency of subsidiaries in Australia is considered to be the Australian Dollar.

The assets and liabilities of these entities are translated to the Group presentation currency at the rate of exchange ruling at the reporting date. Income and expense items are translated at average exchange rates for the period. Any exchange differences are taken directly to the foreign currency translation reserve. On disposal of a foreign entity, cumulative deferred exchange differences are recognised in comprehensive income as part of the profit or loss on sale.

(f) PROPERTy, PLANT ANd EquiPmENTAll items of property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment in value. The carrying values are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable and where carrying values exceed their recoverable amount, assets are written down to their recoverable amount.

Property, plant and equipment, excluding land, are depreciated at rates based on the expected useful economic life of each item, using the straight line method. Mine plant is amortised using the lesser of its useful life or the life of the mine based on the straight-line or units of production method respectively. Buildings and equipment, which includes vehicles and furniture, are depreciated on the straight-line basis at rates which will reduce their book values to estimated residual values over their expected useful lives. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term. The major depreciation rates for all periods presented are:

• Buildings 3 to 12.5 years

• Furniture and fittings 3 to 5 years

• Plant and equipment, including assets held under lease 3 to 13 years

An item of property plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised.

(G) BuSiNESS COmBiNATiONS ANd GOOdwiLLBusiness combinationsBusiness combinations are accounted for using the acquisition method. The acquisition method requires that the acquirer recognises, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree, at acquisition date. Acquisition costs directly attributable to the acquisition are expensed in the period. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair value at the date of acquisition, irrespective of the extent of any non-controlling interest.

For each business combination, the Group has an option to measure any non-controlling interests in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

GoodwillGoodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.


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5. signifiCant aCCounting poliCies (continued)(G) BuSiNESS COmBiNATiONS ANd GOOdwiLL (continued)Goodwill (continued)Goodwill is allocated to cash generating units for the purpose of impairment testing. Refer Note 16.

When the recoverable amount of the cash generating unit (group of cash generating units) is less than the carrying amount, an impairment loss is recognised. When goodwill forms part of a cash generating unit (group of cash generating units) and an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash generating unit retained.

Impairment losses recognised on goodwill are not subsequently reversed.

(h) REvENuE RECOGNiTiONRevenue is recognised and measured at fair value to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

interestRevenue is recognised as the interest accrues on interest bearing cash deposits, using the effective interest method.

Sale of goodsRevenue on sale of mine products is recognised when risks and rewards of ownership of the mine product has passed to the buyer pursuant to a sales contract.

For PGM concentrate sales the sales price is determined on a provisional basis at the date of delivery. Adjustments to the sale price occur based on movements in the metal market price up to the date of final pricing. Final pricing is based on the monthly average market price in the month of settlement. The period between provisional invoicing and final pricing is typically between 2 and 4 months. Revenue on provisionally priced sales is initially recorded at the estimated fair value of the consideration receivable. The revenue adjustment mechanism embedded within provisionally priced sales arrangements has the characteristics of a commodity derivative. Accordingly, the fair value of the final sales price adjustment is re-estimated continuously and changes in fair value recognised as an adjustment to revenue in the statement of comprehensive income and trade debtors in the statement of financial position. In all cases, fair value is determined with reference to estimated forward prices using consensus forecasts.

dividends Revenue is recognised when the Group’s right to receive the payment is established.

(i) iNCOmE TAxESCurrent tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

deferred tax Deferred income tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilised except:

• where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and



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• in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Income tax relating to items recognised directly in equity is recognised in equity and not in the profit or loss.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities, and the deferred taxes relate to the same taxable entity and the same taxation authority.

(J) EmPLOyEE ENTiTLEmENTSProvision is made for employee entitlement benefits accumulated as a result of employees rendering services up to the reporting date. Liabilities arising in respect of wages and salaries, annual leave and other benefits due to be settled within twelve months of the reporting date are measured at rates which are expected to be paid when the liability is settled.

All other employee entitlement liabilities are measured at the present value of estimated payments to be made in respect of services rendered up to reporting date.

Contributions for pensions and other post employment benefits to defined contribution plans are recognised in comprehensive income as incurred during the period in which employees render the related service.

(k) iNTEREST BEARiNG LOANS ANd BORROwiNGSLoans and borrowings other than financial instruments issued by the Group are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, all interest bearing loans and borrowings, other than liabilities held for trading, are subsequently measured at amortised cost using the effective interest method.

Convertible bondThe convertible bond has two elements: a liability component (a host debt contract) and an equity element (an embedded option entitling the bond holder to convert the liability into common shares in the Company). The liability element is initially recognised at fair value and is subsequently carried at amortised cost whereby the initial carrying value of the debt is accreted to the principal amount over the life of the bond. This accretion is recognised as a finance cost together with coupon payments. The balance of the bond proceeds is allocated to the equity component.

(L) BORROwiNG COSTSBorrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of that asset. All other borrowing costs are expensed in the period they occur.

(m) TRAdE ANd OThER PAyABLESLiabilities for trade and other payables, whether billed or not billed to the Group, which are normally settled on 30-90 day terms, are carried at amortised cost.

(N) PROviSiONSProvisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.


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5. signifiCant aCCounting poliCies (continued)(O) CAShCash and cash equivalents include cash on hand and in banks, and deposits at call which have an original maturity of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(P) iNvENTORiES Inventories comprise consumables, reagents, produce, packaging, chromite, reef ore stockpiled and concentrate awaiting further processing and are valued at the lower of cost and net realisable value. Cost is determined on the weighted average method and includes direct mining expenditure and an appropriate proportion of overhead expenditure.

(q) TRAdE ANd OThER RECEivABLESTrade receivables include actual invoiced sales of PGM concentrate as well as sales not yet invoiced for which deliveries have been made and the risks and rewards of ownership have passed. The receivable amount calculated for the PGM concentrate delivered but not yet invoiced is recorded at the fair value of the consideration receivable at the date of delivery. At each subsequent reporting date the receivable is restated to reflect the fair value movements in the pricing mechanism which is considered to represent an embedded derivative.

Other receivables are stated at cost less any allowance for uncollectible amounts. An allowance is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

(R) PROviSiON fOR miNE SiTE REhABiLiTATiONThe provision for rehabilitation represents the cost of restoring site damage following initial disturbance. Increases in the provision are capitalised to deferred mining assets to the extent that the future benefits will arise. Costs incurred that relate to an existing condition caused by past operations and do not have a future economic benefit are expensed.

Gross rehabilitation costs are estimated at the present value of the expenditures expected to settle the obligation, using estimated cash flows based on current prices. The estimates are discounted at a pre-tax rate that reflects current market assessments of the time value of money and where appropriate the risk specific to the liability. The unwinding of the discount is recorded as an accretion charge within finance costs.

Rehabilitation costs capitalised to mining assets are amortised over the operating life of each mine using the units of production method based on estimated proven and probable mineral reserves. Expenditure on ongoing rehabilitation costs is brought to account when incurred.

In South Africa, annual contributions are made to an Environmental Rehabilitation Trust Fund, created in accordance with South African Statutory requirements, to fund the estimated cost of rehabilitation during and at the end of the life of a mine. The funds that have been paid into the trust fund plus the growth in the trust fund are shown as an asset in the statement of financial position.

(S) ShARE CAPiTALShare capital is recognised at the fair value of the consideration received by the Company. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds.

(T) TREASuRy ShARESTreasury shares are deducted from equity and no gain or loss is recognised in profit or loss on purchase, sale, issue or cancellation of the Group’s own equity instruments.

(u) LEASESThe determination of whether an arrangement is, or contains a lease, is based on the substance of the arrangement at inception date.

Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term.

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.

(v) iNTEREST iN JOiNT vENTuRESThe Group’s interest in jointly controlled entities is accounted for by proportionate consolidation, which involves recognising a proportionate share of the joint venture’s assets, liabilities, income and expenses with similar items in the consolidated financial statements on a line-by-line basis.



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In respect of the Group’s interest in jointly controlled assets, the following are recognised in the financial statements:

(i) the Group’s share of the jointly controlled assets, classified according to the nature of the assets;

(ii) any liabilities that the Group has incurred;

(iii) the Group’s share of any liabilities incurred jointly with the other venturers in relation to the joint venture;

(iv) any income from the sale or use of the Group’s share of the output of the joint venture, together with the Group’s share of any expenses incurred by the joint venture; and

(v) any expenses that the Group has incurred in respect of its interest in the joint venture.

(w) imPAiRmENT Of NON fiNANCiAL ASSETSThe carrying amounts of the Group’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If there is any indication that an asset may be impaired, its recoverable amount is estimated and the book value of the asset is written down to its recoverable amount. The recoverable amount is the higher of net selling price and value in use.

In assessing value in use, the expected future cash flows from the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. An impairment loss is recognised in the statement of comprehensive income whenever the carrying amount of the cash-generating unit exceeds its recoverable amount.

A previously recognised impairment loss is reversed if the recoverable amount increases as a result of a change in the estimates used to determine the recoverable amount, but not to an amount higher than the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognised in prior years.

(x) ShARE-BASEd PAymENT TRANSACTiONSEmployees (including senior executives) of the Group receive remuneration in the form of equity based payment transactions, whereby employees render services as consideration for equity instruments (‘equity- settled transactions’).

The Group currently has a Share Plan and an Option Plan for employees. Loans made under the Share plan are treated as share-based compensation under IFRS 2.

Equity-settled transactions The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which they are granted. The fair value is determined using a binomial or Black & Scholes pricing model. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of the Company, if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘the vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any modification which increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.

Shares in the Group acquired on market and held by the Share Plan are shown as a deduction from equity.


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5. signifiCant aCCounting poliCies (continued)(y) EARNiNGS PER ShAREBasic earnings per shareBasic earnings per share is calculated by dividing the profit attributable to equity holders of the parent, excluding any costs of servicing equity other than dividends, by the weighted average number of ordinary shares, adjusted for any bonus elements.

diluted earnings per shareDiluted earnings per share is calculated as net profit attributable to equity holders of the parent, adjusted for:

• costs of servicing equity (other than dividends);

• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and

• other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus elements.

(z) dividENdSProvision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at reporting date.

(AA) iNTANGiBLE ASSETSThe cost of intangible assets acquired in a business combination is the fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses.

Intangible assets with finite lives are amortised using the straight line method over the useful life of the contract and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method is reviewed at least each financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.

(BB) COmPARATivE AmOuNTSWhere appropriate, comparative amounts have been reclassified to be consistent with the current year’s presentation.

(CC) STANdARdS iSSuEd BuT NOT yET EffECTivE Standards issued but not yet effective up to the date of issuance of the Group’s financial statements are listed below. This listing of standards and interpretations issued are those that the Group reasonably expects to have an impact on disclosures, financial position or performance when applied at a future date. Unless stated otherwise below, the impact of these new or amended standards has yet to be fully assessed, however the Group does not expect their adoption to have a material effect on the financial statements. The Group intends to adopt these standards when they become effective.

Reference Title SummaryApplication date

of standardApplication date

for Group

IFRS 10 Consolidated Financial Statements

IFRS 10 establishes a new control model that applies to all entities. It replaces parts of IAS 27 Consolidated and Separate Financial Statements dealing with the accounting for consolidated financial statements and SIC-12 Consolidation – Special Purpose Entities.

1 January 2013 1 July 2013

The new control model broadens the situations when an entity is considered to be controlled by another entity and includes new guidance for applying the model to specific situations, including when acting as a manager may give control, the impact of potential voting rights and when holding less than a majority voting rights may give control.



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for Group

IFRS 11 Joint Arrangements

IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC 13 Jointly-controlled Entities – Non-monetary Contributions by Ventures. IFRS 11 uses the principle of control in IFRS 10 to define joint control, and therefore the determination of whether joint control exists may change. In addition it removes the option to account for jointly controlled entities (JCEs) using proportionate consolidation. Instead, accounting for a joint arrangement is dependent on the nature of the rights and obligations arising from the arrangement. Joint operations that give the venturers a right to the underlying assets and obligations themselves is accounted for by recognising the share of those assets and obligations. Joint ventures that give the venturers a right to the net assets is accounted for using the equity method.

1 January 2013 1 July 2013 with comparatives

from 1 July 2012

Management have undertaken an assessment of the impact of IFRS 11. The assessment indicates that the arrangements where joint control currently exists under IAS 31 will be unchanged under IFRS 11.

The Mimosa operation and Blue Ridge asset will be classified as Joint Ventures under IFRS 11. This would result in Mimosa and Blue Ridge being accounted for under the equity method. This is a change from the current treatment where Mimosa and Blue Ridge are proportionately consolidated. The equity method recognises the Group’s share of net assets and results as single line items in the statement of financial position and statement of comprehensive income respectively. This change is not expected to result in a change to the net assets of the Group.

The Kroondal and Marikana operations and Chrome Tailings Retreatment Plant are expected to be classified as Joint Operations under IFRS 11, with the Group recognising its share of assets, liabilities, income and expenses on a line by line basis.

IFRS 12 Disclosure of Interests in Other Entities

IFRS 12 includes all disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and structures entities. New disclosures have been introduced about the judgements made by management to determine whether control exists, and to require summarised information about joint arrangements, associates and structured entities and subsidiaries with non-controlling interests.


IFRS 13 Fair Value Measurement

IFRS 13 establishes a single source of guidance for determining the fair value of assets and liabilities. IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted. Application of this definition may result in different fair values being determined for the relevant assets.


IFRS 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includes information about the assumptions made and the qualitative impact of those assumptions on the fair value determined.

IAS 19 Employee Benefits

The main change introduced by this standard is to revise the accounting for defined benefit plans. The amendment removes the options for accounting for the liability, and requires that the liabilities arising from such plans is recognised in full with actuarial gains and losses being recognised in other comprehensive income. It also revised the method of calculating the return on plan assets.


The revised standard changes the definition of short-term employee benefits. The distinction between short-term and other long-term employee benefits is now based on whether the benefits are expected to be settled wholly within 12 months after the reporting date.


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for Group

IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

This interpretation applies to stripping costs incurred during the production phase of a surface mine. Production stripping costs are to be capitalised as part of an asset, if an entity can demonstrate that it is probable future economic benefits will be realised, the costs can be reliably measured and the entity can identify the component of an ore body for which access has been improved. This asset is to be called the ‘stripping activity asset’.


The stripping activity asset shall be depreciated or amortised on a systematic basis, over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity. The units of production method shall be applied unless another method is more appropriate.

IFRIC 21 Levies This interpretation confirms that a liability to pay a levy is only recognised when the activity that triggers the payment occurs. Applying the going concern assumption does not create a constructive obligation.


IFRS 9 Financial Instruments: Classification and Measurement

IFRS 9 includes requirements for the classification and measurement of financial assets. It was further amended to reflect amendments to the accounting for financial liabilities.


These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of IAS 39. The main changes are described below. (a) Financial assets that are debt instruments will be classified based

on (1) the objective of the entity’s business model for managing the financial assets; (2) the characteristics of the contractual cash flows.

(b) Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument.

(c) Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases.

(d) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows: • the change attributable to changes in credit risk are presented in

other comprehensive income• the remaining change is presented in profit or loss

If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss.



5. signifiCant aCCounting poliCies (continued)(CC) STANdARdS iSSuEd BuT NOT yET EffECTivE (continued)

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6. operating segments(A) idENTifiCATiON Of REPORTABLE SEGmENTSThe Group has identified its operating segments based on the internal reports that are reviewed and used by the executive management team in assessing performance and in determining the allocation of resources.

Each individual mine and tailings retreatment operation is treated as a separate operating unit for internal reporting purposes. Discrete financial information about each of these operating units is reported to the executive management team on a monthly basis. The Corporate operating unit holds assets and liabilities not specifically related to a single operating unit.

The operations of Kroondal, Marikana, Everest and Mimosa mine, process and sell concentrate containing platinum group metals. The operations of CTRP and Plat Mile operate as tailings retreatment facilities from which they produce and sell a concentrate containing platinum group metals. Blue Ridge was on care and maintenance through-out the whole year. Marikana and Everest mines were placed on care and maintenance in June 2012.

The majority of sales of concentrate are to two specific South African based customers being Impala Platinum Holdings Limited and Rustenburg Platinum Mines Limited. The operations of Kroondal, Marikana, Everest, Blue Ridge, CTRP and Plat Mile are based in South Africa. The operations of Mimosa are based in Zimbabwe.

Repatriation of funds from South Africa and Zimbabwe are subject to regulatory approval in the respective countries.

(B) ACCOuNTiNG POLiCiES ANd iNTER-SEGmENT TRANSACTiONSThe accounting policies used by the Group in reporting segments internally are the same as those contained in Note 5 to the accounts.

Corporate/unallocated comprises non-segmental revenue and expenses such as head office expenses and interest income/expense. Corporate charges are not allocated to operating segments. Similarly, corporate assets and liabilities, including financial assets and liabilities, are not allocated to the segments, such that there is symmetrical treatment between the segment results and segment assets and liabilities.

(C) zimBABwE OPERATiONSOn 14 December 2012, Mimosa Investment Holdings (“Mimosa Investments”), which is held jointly in a 50:50 partnership with Impala Platinum Holdings Limited, concluded a non-binding term sheet in respect of a proposed indigenisation implementation plan (“IIP”) with the Government of Zimbabwe. The term sheet provides for the key terms, subject to certain conditions precedent, of the sale by Mimosa Investments of an aggregate 51% equity ownership of Mimosa Holdings (Private) Limited (“Mimosa Holdings”), the wholly owned operating subsidiary of Mimosa Investments which owns and manages the Mimosa mine. The sale consideration for the 51% of Mimosa Holdings to the indigenous parties is $550 million (50% attributable to Aquarius), based on an agreed fair market value for Mimosa Holdings of $1.078 billion. As part of the IIP, the debt owing by the Reserve Bank of Zimbabwe will be transferred to the Government of Zimbabwe.

Mimosa Investments will provide a vendor loan funding mechanism, which has a term of ten years, to facilitate the transaction. This loan will bear interest at a rate of 9% annually and will be settled through the waiver of the right to receive 90% of dividends due to the indigenous entities in favour of Mimosa Investments. Any loan balance outstanding at the end of the ten-year period will be payable in cash.

Included in conditions precedent of the term sheet is the requirement for definitive agreements to be concluded between the parties. As at year end, the definitive agreements are yet to be finalised and an extension of the term sheet has been requested. As a result, the matter is ongoing and management is unable to estimate the financial impact of the proposed transaction.


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6. operating segments (continued)

Kroondal Marikana Everest Mimosa Plat Mile CTRP Blue RidgeCorporate/Unallocated Consolidated

Year ended 30 June 2013 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue 217,253 828 1,101 133,412 12,657 387 37 4,873 370,548Cost of sales– mining, processing

and administration (192,838) (2,383) (3,743) (96,181) (9,317) (503) (1,564) (4) (306,533)– depreciation and

amortisation (32,396) (532) (2,642) (12,066) (3,309) (249) (68) (15) (51,277)Gross profit/(loss) (7,981) (2,087) (5,284) 25,165 31 (365) (1,595) 4,854 12,738Other income – – – – – – – 278 278Administrative costs – – – – – – – (12,924) (12,924)Foreign exchange gain/(loss) 11,930 71 122 (124) 760 41 – (32,246) (19,446)Finance costs – – – – – – – (30,817) (30,817)Impairment losses – (18,799) (85,922) – (12,379) – (14,170) (94,696) (225,966)Closure, transition and rehabilitation costs (2,982) (41,275) (10,281) – – – – – (54,538)Community share ownership trust – – – (1,500) – – – – (1,500)Profit/(loss) before income tax 967 (62,090) (101,365) 23,541 (11,588) (324) (15,765) (165,551) (332,175)Income tax benefit – – – – – – – 44,262 44,262Net profit/(loss) from ordinary activities 967 (62,090) (101,365) 23,541 (11,588) (324) (15,765) (121,289) (287,913)

Segment assets 194,225 64,672 44,818 255,810 78,457 1,597 32,858 92,484 764,921Capital expenditure 30,718 386 1,653 18,126 189 – – 3,305 54,377Segment liabilities 9,248 68,423 8,276 47,969 24,187 3 29,884 280,989 468,979

The Group has non-current assets of $562 million (2012: $890 million) comprising $381 million (2012: $711 million) in South Africa and $181 million (2012: $179 million) in Zimbabwe.



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Kroondal Marikana Everest Mimosa Plat Mile CTRP Blue RidgeCorporate/Unallocated Consolidated

Year ended 30 June 2012 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue 180,384 56,891 84,228 142,742 11,307 2,114 – 8,070 485,736Cost of sales– mining, processing

and administration (189,309) (67,736) (114,385) (80,397) (9,371) (3,001) – (1,224) (465,423)– depreciation and

amortisation (22,803) (14,610) (13,042) (9,937) (4,366) (280) – (708) (65,746)Gross profit/(loss) (31,728) (25,455) (43,199) 52,408 (2,430) (1,167) – 6,138 (45,433)Other income – – – – – – – 2,076 2,076Administrative costs – – – – – – – (11,950) (11,950)Foreign exchange gain/(loss) 12,243 3,090 1,456 (145) 43 141 – (111,829) (95,001)Finance costs – – – – – – – (34,674) (34,674)Impairment losses – – – – – – (3,983) – (3,983)Profit/(loss) before income tax (19,485) (22,365) (41,743) 52,263 (2,387) (1,026) (3,983) (150,239) (188,965)Income tax benefit – – – – – – – 30,678 30,678Net profit/(loss) from ordinary activities (19,485) (22,365) (41,743) 52,263 (2,387) (1,026) (3,983) (119,561) (158,287)

Segment assets 180,298 120,911 167,419 251,757 109,811 2,769 53,605 314,620 1,201,190Capital expenditure 32,304 10,410 18,445 30,681 1,228 180 – – 93,248Segment liabilities 65,760 44,001 24,491 53,000 32,520 425 32,404 271,944 524,545


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7. revenue and expenses2013 2012

$’000 $’000

Revenue

Sale of mine products 376,339 507,804

PGM price adjustments * (12,152) (31,205)

Interest income 6,361 9,137

370,548 485,736

* This represents the impact of PGM price movements on sales

Cost of sales

Amortisation and depreciation 51,277 65,746

Other costs of production 295,548 456,649

Royalties 10,985 8,774

357,810 531,169

Other income

Other 278 2,076

278 2,076

Administrative costs

Advertising and promotion 175 392

Consulting fees 2,393 2,528

Directors’ fees 905 1,036

Insurance 148 139

Legal fees 1,601 582

Rental on operating leases 273 303

Share-based payments 907 1,178

Stock exchange and registry management 433 457

Travel 1,034 1,043

Wages, salaries and employee benefits 4,331 3,605

Other 724 687

12,924 11,950

finance costs

Interest on borrowings 17,057 18,579

Loss on early redemption of convertible bond – 170

Accretion of interest on convertible bond 10,299 9,925

Accretion of mine-site rehabilitation liability 2,453 4,992

Amortisation of borrowing costs 1,008 1,008

30,817 34,674

Staff costs included in the statement of comprehensive income *

Salaries and wages 73,506 28,534


Superannuation 4,763 1,875

79,176 31,587

* Kroondal mine changed to owner operator during the year



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2013 2012

$’000 $’000

depreciation and amortisation included in the statement of comprehensive income

Depreciation 22,310 17,759

Amortisation of intangible asset 2,213 3,149

Amortisation of mining assets 26,754 44,838

51,277 65,746

impairment losses

Class of asset:

Mining assets (a) 212,378 –

Intangible asset (b) 12,379 –

Trade and other receivables – non-current (c) 1,209 3,983

225,966 3,983

(a) Relates to the following segments:

Corporate/Unallocated – Afarak (i) 84,233 –

Corporate/Unallocated – Chieftains, Valhalla, Fairway, Magaliesburg, Zondernaam (ii) 10,463 –

Everest (iii) 85,922 –

Marikana (iv) 18,799 –

Blue Ridge (v) 12,961 –

212,378 –

(i) The present low price environment and reduction in market activity, especially in the areas surrounding the Afarak properties, has necessitated the re-assessment of the carrying value of the assets acquired under the Afarak transaction. The future viability of these prospecting rights has become uncertain given the current challenges faced by the platinum industry. On the basis of the above it has been concluded that the carrying value of the assets be written off in full as the fair value less cost of sale is unable to be reliably estimated in the current market.

(ii) The present low price environment and cessation of activity on these properties has necessitated the re-assessment of their carrying values. No production is currently anticipated from any of these properties. On the basis of the above it has been concluded that the carrying value of the assets be written off in full as the fair value less cost of sale is unable to be reliably estimated in the current market.

(iii) The Everest mine was placed on care and maintenance in June 2012. The future of the operation was expected to be positively impacted through the purchase of the Booysendal property adjacent to Everest. This purchase was terminated during the year as a result of a condition precedent not being fulfilled. Accordingly the carrying value of Everest has been re-assessed. The recoverable amount was determined by Management on a value in use basis using independent consensus metal prices and a post tax real discount rate of 10.7%.

(iv) During the year a decision was made to mine the economically viable Marikana reserves as part of the Kroondal mine and treat all ore through the K1 and K2 plants. Under the current plan the Marikana plant will not be utilised. Accordingly the carrying value of Marikana has been re-assessed. Assets comprising the Marikana operations have been assessed individually. Management have determined that the recoverable amount of all underground infrastructure assets that will no longer be used is nil, on a fair value less cost of sale basis. The recoverable amount of underground infrastructure assets that will continue to be utilised was determined by Management on a value in use basis using independent consensus metal prices and a post tax real discount rate of 10.7%. The recoverable amount of the Marikana plant has been determined to exceed its carrying value on a fair value less cost of sale basis determined by an indicative purchase offer from a third party.

(v) Blue Ridge was previously placed on care and maintenance and a consequential impairment loss recognised in the year ended 30 June 2011. The operation has not recommenced production since. An additional impairment loss has been recognised. The recoverable amount on a fair value less cost of sale basis was determined by an indicative purchase offer from a third party.

(b) The present low price environment has necessitated a re-assessment of the carrying value of the Plat Mile tailings retreatment operation. The recoverable amount was determined by Management on a value in use basis using independent consensus metal prices and a post tax real discount rate of 10.7%.

(c) Represents the unrecoverable portion of a loan balance due from a third party.


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2013 2012

$’000 $’000

7. revenue and expenses (continued)Closure, transition and rehabilitation costs

Closure and transition costs 17,695

Rehabilitation costs 36,843 –

54,538 –

8. inCome taxMajor component of tax benefit for the year

Income statement:

Current income tax 4,115 10,314

Deferred tax – origination and reversal of temporary differences (51,315) (45,594)

Withholding tax 2,356 3,590

Royalties 582 1,012

Income tax benefit (44,262) (30,678)

As a Bermudian corporation, Aquarius has no tax liability under that jurisdiction with respect to income derived. Certain of its foreign derived income is subject to applicable tax in the countries from which such income is derived.

Amounts charged or credited directly to equity – –

The Group’s effective tax rate in 2013 was 13% (2012: 16%). A reconciliation of income tax expense applicable to profit from operating activities before income tax at the statutory income tax rate to income tax expense at the Group’s effective income tax rate at year end is as follows:

Loss from ordinary activities before income tax (332,175) (188,965)

At the South African income tax rate of 28% (93,009) (52,910)

Lower Zimbabwe income tax rate of 25% (700) (1,520)

Lower Mauritius income tax rate of 15% (214) (186)

Profit or loss of parent company not subject to taxation 16,971 9,544

Foreign exchange adjustments on tax liabilities (1,238) (3,271)

Unrecognised tax losses 56 126

Income not assessable (792) (429)

Capital and incentive allowances (3,098) (1,019)

Expenditure not allowable for income tax purposes 12,851 6,505

Tax asset not recognised 23,924 6,934

Withholding tax on dividends and technical fees received 2,356 3,590

(Under)/over provision from prior year (1,369) 1,958

At effective income tax rate of 13% (2012: 16%) (44,262) (30,678)

Current tax liabilities

Tax (receivable)/payable (264) 815



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2013 2012

$’000 $’000

deferred tax liabilities

Capital allowances on machinery 39,466 90,944

Fair value uplift on mining assets 9,165 10,698

Environmental trust 2,809 3,410

Provision for mine site rehabilitation (21,136) (16,539)

Closure costs 1,219 4,963

Prepayments 189 301

Identifiable intangible assets 16,646 24,607

Tax losses (14,878) (24,979)

Provisions (401) (357)

Unrealised foreign exchange gains 1,834 1,914

Mine debtors/creditors 1,572 2,396

Other 1,352 1,024

Deferred tax liability 37,837 98,382

Reconciliation of movement in deferred tax liabilities

Balance of deferred tax liabilities at beginning of year 98,382 151,561

Foreign exchange translation of deferred tax liabilities (9,230) (17,872)

Deferred tax expense (51,315) (45,594)

Reversal of Platinum Mile Resources (Pty) Ltd deferred tax on ceasing to be jointly controlled – (18,126)

Deferred tax arising from gaining control of Platinum Mile Resources (Pty) Ltd – 28,413

Deferred tax liability 37,837 98,382

At 30 June 2013, the potential benefit of tax losses of a foreign subsidiary amounting to $5 million (2012: $5 million) has not been brought to account in these financial statements, as it is not probable that the benefit will flow to that entity. Potential withholding taxes not currently recognised on undistributed profits from jointly controlled entities totals $17 million (2012: $17 million).

2013 2012

$’000 $’000

9. earnings per sharea) Basic loss per share – cents (61.13) (33.77)

Basic loss per share is calculated by dividing the net loss attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

b) diluted loss per share – cents (61.13) (33.77)

Diluted loss per share is calculated by dividing the net loss attributable to ordinary shareholders by the weighted average number of shares outstanding during the year (after adjusting for the effects of potential dilutive ordinary shares).

c) Reconciliations

Net loss used in calculating basic and diluted earnings per share (287,207) (158,227)


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2013 2012

Number of shares

Number of shares

9. earnings per share (continued)c) Reconciliations (continued)

Weighted average number of shares used in the calculation of basic loss per share 469,864,119 468,588,615

Effect of dilutive securities

Dilutive instruments – –

Adjusted weighted average number of shares used in the calculation of diluted loss per share 469,864,119 468,588,615

Number of potential ordinary shares not considered dilutive

Share options 120,000 120,000

Convertible bonds 43,998,228 43,998,228

44,118,228 44,118,228

2013 2012

$’000 $’000

d) headline loss per share is disclosed as required by the JSE Limited

Loss attributable to ordinary equity holders of the parent entity (287,207) (158,227)

Adjustments net of tax:

Impairment losses 225,966 3,983

Other (76) 190

Headline loss (61,317) (154,054)

Headline loss per share – cents

Basic (13.05) (32.88)

Diluted (13.05) (32.88)

There have been no transactions involving ordinary shares or potential ordinary shares that would significantly change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the date of completion of these financial statements.

10. dividends paid, deClared or proposed No dividend has been declared or proposed for the 2013 financial year. Total dividends paid during the 2012 financial year amounted to $19 million, comprising a final 2011 dividend paid in September 2011.

2013 2012

$’000 $’000

11. reCeivaBles – non-CurrentAmount due from joint venture participant for share of mine site closure costs (a) 9,605 11,189

Receivable from government (b) 28,537 28,537

Other receivables (c) 22,558 27,527

60,700 67,253



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(a) Based on the first and second Notarial Pooling and Sharing agreements (PSAs) with Anglo Platinum, AQPSA holds a contractual right to recover 50% of the rehabilitation liability relating to environmental rehabilitation resulting from PSA operations from Rustenburg Platinum Mines Limited (RPM), where this rehabilitation relates to property owned by AQPSA. Likewise RPM holds a contractual right to recover 50% of the rehabilitation liability relating to environmental rehabilitation resulting from PSA operations from AQPSA, where the rehabilitation relates to property owned by RPM. Refer also Note 21(a). With respect to the opencast section of the Marikana mine that is on AQPSA property, RPM have limited their contractual liability to approximately ZAR50 million, being a negotiated liability in terms of an amendment to the second Notarial Pooling and Sharing Agreement.

(b) The Group as part of its investment in Mimosa has a receivable from the Reserve Bank of Zimbabwe (RBZ) of $29 million. The amount owing relates to a former requirement for Mimosa to repatriate a component of US Dollar sales into Zimbabwean Dollars through the sale of US Dollars to the Bank of Zimbabwe in exchange for Zimbabwean Dollars. It represents an accumulated balance of US Dollar sales for which Zimbabwean Dollars were in excess of Mimosa’s operational requirements. The amount owing is immediately repayable on demand in US Dollars, is unsecured and bears no interest. The RBZ has confirmed the amount owing in US Dollars. As part of the indigenisation implementation plan with the Government of Zimbabwe the debt will be transferred to the Government of Zimbabwe – refer Note 6(c). The fair value of the receivable, determined using a 15% discount rate, is approximately $24 million (2012: $24 million). Refer Note 34(d).

(c) Other receivables include $23 million due from jointly controlled entities. During the year, $1 million (2012: $4 million) representing the unrecoverable portion of a loan balance due from a jointly controlled entity was impaired. Refer Note 7.

2013 2012

$’000 $’000

12. availaBle-for-sale investmentsShares in other corporations 3,433 2,785

Available-for-sale financial assets consist of investments in ordinary shares and therefore have no fixed maturity date or coupon rate.

Land and buildings

Plant andequipment Total

$’000 $’000 $’000

13. property, plant and equipment30 June 2013

Beginning carrying value 26,360 249,835 276,195

Additions – 28,299 28,299

Disposals – (522) (522)

Depreciation (1,978) (20,332) (22,310)

Increase in provision for rehabilitation – 674 674

Transfers 12,482 (16,172) (3,690)

Foreign exchange variance (160) (17,264) (17,424)

Closing carrying value 36,704 224,518 261,222

At cost 44,889 325,161 370,050

Accumulated depreciation (8,185) (100,643) (108,828)



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Land and buildings

Plant andequipment Total

$’000 $’000 $’000

13. property, plant and equipment (continued)30 June 2012

Beginning carrying value 28,163 297,600 325,763

Additions 41 33,401 33,442

Disposals – (371) (371)

Depreciation (1,680) (16,079) (17,759)

Reversal of Platinum Mile Resources (Pty) Ltd plant and equipment on ceasing to be jointly controlled – (10,286) (10,286)

Plant and equipment arising from gaining control of Platinum Mile Resources (Pty) Ltd – 12,213 12,213

Reduction in provision for rehabilitation – (6,328) (6,328)

Transfers to mining assets – (23,413) (23,413)

Foreign exchange variance (164) (36,902) (37,066)


At cost 32,602 366,245 398,847

Accumulated depreciation (6,242) (116,410) (122,652)


Refer to Note 25 and 31 for security granted over these assets.

2013 2012

$’000 $’000

14. mining assetsComprising deferred exploration and evaluation costs, mineral properties acquired and mine development costs as follows:

Exploration and evaluation costs – 16,612

Mineral properties acquired 230,106 252,163

Accumulated amortisation and impairment (169,908) (91,717)

60,198 160,446

Development costs 459,461 483,978

Accumulated amortisation and impairment (358,864) (223,462)

100,597 260,516

160,795 437,574

Reconciliation of movement

Opening balance 437,574 480,634

Additions/expenditure incurred during the year 26,078 59,806

Disposals incurred during the year (307) (3,712)

Increase/(reduction) in provision for rehabilitation 2,800 (13,923)

Impairment of mining assets – refer Note 7 (212,378) –

Amortisation charges (26,754) (44,838)

Transfers from property, plant and equipment 3,690 23,413

Foreign exchange variance (69,908) (63,806)

Closing balance 160,795 437,574

Refer to Note 25 and 31 for security granted over these assets.



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In accordance with the Group’s policy on mining assets, the directors have reviewed the carrying value of mineral exploration tenements as at 30 June 2013. The value of the mineral exploration tenements is carried forward as an asset provided the rights to tenure of the area of interest are current and either:

• the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or

• exploration and evaluation activities in the area of interest have not at the reporting date reached a stage which permits a reasonable assessment of the existence, or otherwise, of economically recoverable reserves, and active and significant operations in, or relating to, the area of interest are continuing.

2013 2012

$’000 $’000

15. restriCted Cash in environmental trustsContributions to environmental rehabilitation trusts 16,712 18,055Reconciliation of movementOpening balance 18,055 19,703Interest received 802 935Foreign exchange variance (2,145) (2,583)Closing balance 16,712 18,055

AQPSA has established Environmental Rehabilitation Trusts into which the Company makes annual contributions in order to provide for its obligations in respect of environmental rehabilitation. AQPSA also contributes to the Rustenburg Platinum Mines Rehabilitation Trust in order to provide for the obligations in respect of environmental rehabilitation for part of the jointly controlled operation’s obligation incurred in the Notarial Pooling and Sharing Agreements. The trust balances are represented by restricted cash financial assets that can only be accessed in compliance with meeting the trust objectives.

2013 2012

$’000 $’000

16. intangiBle asset and goodwillContract for treatment of tailings material 73,699 89,454Less accumulated amortisation and impairment (14,250) (1,572)

59,449 87,882Goodwill – –

59,449 87,882Reconciliation of contract for treatment of tailings materialJointly controlled entitiesOpening balance – 68,040Amortisation charge – (1,523)Foreign currency adjustment – (12,918)Reversal on Platinum Mile Resources (Pty) Ltd ceasing to be jointly controlled – (53,599)Closing balance – –Controlled entitiesOpening balance 87,882 –Assessed fair value on gaining control of Platinum Mile Resources (Pty) Ltd – 87,562Impairment charge (12,379) –Amortisation charge (2,213) (1,626)Foreign currency adjustment (13,841) 1,946Closing balance 59,449 87,882Reconciliation of goodwillOpening balance – 9,949Foreign currency adjustment – (1,915)Reversal on Platinum Mile Resources (Pty) Ltd ceasing to be jointly controlled – (8,034)Closing balance – –


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17. interests in joint venturesThe Group has the following interests in joint ventures:

• a 50% interest in two joint ventures each referred to as the “Notarial Pooling & Sharing Agreements”. The principal activities of the joint ventures are to extend the Kroondal mine over the boundary of the properties covering the Kroondal mine and expand the Marikana mine operations through mineral rights contributed by Anglo Platinum through its subsidiary, Rustenburg Platinum Mines Ltd.

• a 50% interest in Mimosa Investments Limited, which owns and operates the Mimosa mine and a 50% interest in a joint venture known as the “Chrome Tailings Retreatment Project”.

• a 50% interest in Blue Ridge Platinum (Pty) Limited, which has been placed on care and maintenance, and a 39% interest in Sheba’s Ridge Platinum (Pty) Ltd, which is under feasibility study.

The Group’s share of the assets, liabilities, revenue and expenses of the joint ventures which are included in the consolidated financial statements, are as follows:

2013 2012

$’000 $’000

Current assets 132,877 168,161

Non-current assets 432,649 581,365

565,526 749,526

Current liabilities (43,840) (237,563)

Non-current liabilities (119,060) (45,362)

402,626 466,601

Revenue 350,627 384,509

Cost of sales (335,987) (392,094)

Other expenses (3,316) (2,028)

Foreign exchange gain 11,917 15,226

Closure, transition and rehabilitation costs (6,728) –

Impairment expense (32,969) (3,983)

Interest received 1,248 922

Interest expense (4,448) (5,211)

Loss before income tax (19,656) (2,659)

Income tax expense (8,865) (17,418)

Net loss (28,521) (20,077)

Capital expenditure commitments (non-cancellable) 7,912 5,005

These commitments represent contractual commitments relating to development activities at the Kroondal and Mimosa projects and include Aquarius’ share of capital expenditure associated with the capital development of those mines.

2013 2012

$’000 $’000

18. Cash and Cash equivalentsCash at bank 58,972 31,667

Short-term deposits 43,960 148,421

102,932 180,088

The interest rate earned from cash at bank and short-term deposits ranged from 0.01% to 4.20% per annum. Short-term deposits have maturity dates of three months or less.



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2013 2012

$’000 $’000

19. trade and other reCeivaBles – CurrentTrade receivables (a) 47,242 58,402

Other receivables (b) 11,182 28,698

58,424 87,100

(a) Trade receivables have been offset by an amount of:

• $nil (2012: $16 million) relating to the pre-financing by Impala Platinum Holdings Limited of delivered PGM concentrates. This amount is subject to interest at the London Inter-Bank Offered Rate (LIBOR) plus 1%. The pre-financing is due to be offset in US Dollars against the final invoice amount during July, August, September and October 2013.

• $48 million (2012: $53 million) relating to the pre-financing by Rustenburg Platinum Mines Limited of delivered PGM concentrates. This amount is subject to interest at the London Inter-Bank Offered Rate (LIBOR) plus 1%. The pre-financing is due to be offset in US Dollars against the final invoice amount during July, August, September and October 2013.

• $39 million (2012: $46 million) relating to the pre-financing by Centametall AG of delivered PGM concentrates. This amount is subject to interest at the London Inter-Bank Offered Rate (LIBOR). The pre-financing is due to be offset in US Dollars against the final invoice amount during July, August, September and October 2013.

Trade receivables are due from major minerals mining and processing companies. None of the amounts are considered past due or impaired. At 30 June 2013, gross sales of $128 million (2012: $161 million) were subject to price adjustments. Refer to Note 34(b)(ii).

(b) None of the amounts are considered past due or impaired.

2013 2012

$’000 $’000

20. inventories Ore stockpiled at cost 1,987 1,362

Ore stockpiled at net realisable value 222 930

PGM concentrates at cost 926 955

Consumables at cost 37,855 41,011

40,990 44,258

21. payaBles – non-CurrentAmount due to joint venture participant in respect of mine closure costs (a) 2,665 1,024

Other payables 2,898 3,180

5,563 4,204

(a) Based on the first and second Notarial Pooling and Sharing agreements (PSAs) with Anglo Platinum, AQPSA holds a contractual right to recover 50% of the rehabilitation liability relating to environmental rehabilitation resulting from PSA operations from Rustenburg Platinum Mines Limited (RPM), where this rehabilitation relates to property owned by AQPSA. Likewise RPM holds a contractual right to recover 50% of the rehabilitation liability relating to environmental rehabilitation resulting from PSA operations from AQPSA, where the rehabilitation relates to property owned by RPM. Refer also Note 11(a).


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2013 2012

$’000 $’000

22. interest Bearing loans and Borrowings – non-Current

Secured loans (a) 158 221

Unsecured loans – refer Note 25(b) 1,558 3,261

Finance lease liabilities (b) 771 5,493

Convertible bonds (c) 267,859 256,551

270,346 265,526

(a) Secured loans comprise a loan of $0.2 million (ZAR1.6 million) (2012: $0.2 million and ZAR1.8 million) payable to the Land and Agricultural Bank of South Africa by a subsidiary, TKO Investment Holdings Ltd. The loan bears interest at 8% and is repayable in annual instalments of ZAR0.4 million on 15 June each year. The loan is secured by a first mortgage bond on all the fixed properties amounting to ZAR3.3 million within the TKO Group and cross guarantees between all the companies in the TKO Group.

(b) Finance lease liabilities relating to vehicles are calculated at an effective interest rate of the South African prime bank lending rate less an average of 2% with a lease term of 4 years. Finance lease liabilities relating to mining equipment are calculated at an effective interest rate of the South African prime bank lending rate less 1.5% with an average lease term of 3 years.

(c) In December 2009 the Company issued $300 million 4% Convertible Bonds due 2015 (the Bonds) constituted by a trust deed dated 18 December 2009 and subject to the following summarised key terms:

i) The authorised denomination of the Bonds is $100,000 each and, unless previously redeemed, converted or purchased and cancelled, will be redeemed on 18 December 2015 at their principal amount plus accrued and unpaid interest;

ii) The holder has the right to convert the Bonds into Common Shares in the Company. The number of Common Shares to be issued on conversion is determined by dividing the principal amount of the Bonds by the Conversion Price in effect at such time. The initial Conversion Price was set at $6.773 per Common Share, but may be adjusted for certain events set out below;

iii) On satisfying the required notice period, the Company has the right to redeem all, but not some only, of the Bonds on or after 8 January 2013 if the market value of the Common Shares is at a premium of 30% to the Conversion Price for a certain period. The Company may also redeem the Bonds in circumstances where 85% of the Bonds have been converted, redeemed or purchased and cancelled;

iv) The Conversion Price may be adjusted in certain circumstances, including the payment of dividends to Shareholders, rights issues and bonus issues. In addition, if a Change of Control (as defined in the terms and conditions of the Bonds) occurs, holders have a right to convert their Bonds at a Conversion Price that shall be adjusted downwards for a limited period of time or to require redemption of their Bonds at their principal amount plus accrued and unpaid interest;

v) The Bonds bear interest of 4% per annum payable semi-annually in arrears;

vi) Should an Event of Default occur the Bonds may become due and repayable immediately at their principal amount plus accrued and unpaid interest. Events of Default include failure to pay amounts due under the Bonds, non-payment of other financial indebtedness above certain thresholds and insolvency or similar events occurring; and

vii) The Bonds are unsecured but subject to a negative pledge whereby the Group undertakes not to create or permit any security being registered over its assets without meeting certain requirements to the satisfaction of the Trustee.

For accounting purposes the Bonds have two elements: a liability component included in Note 22 (a host debt contract) and an equity element included in Note 29(f) (an embedded option entitling the Bond holder to convert the liability into Common Shares in the Company). The liability element is initially recognised at fair value and is subsequently carried at amortised cost whereby the initial carrying value of the liability is accreted to the principal amount over the life of the Bond. This accretion is recognised as a finance cost together with the interest expense. The balance of the Bond proceeds is allocated to the value of the embedded option equity component. The fair value of the Bond at 30 June 2013 is $233 million (2012: $178 million).



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2013 2012

$’000 $’000

23. provisions – non-CurrentProvision for mine site rehabilitation 77,126 42,890

Provision for employee entitlements 70 77

77,196 42,967


Balance at beginning of year 42,967 70,150

Additional/(reversal of) provision for employee entitlements (1) (121)

Increase/(reduction) in mine site closure costs provided 39,253 (20,251)

Interest adjustment due to accretion in mine-site rehabilitation liability 2,453 4,992

Net exchange differences (7,476) (11,990)

Reversal of Platinum Mile Resources (Pty) Ltd provisions on ceasing to be jointly controlled – (187)

Provisions arising from gaining control of Platinum Mile Resources (Pty) Ltd – 374

Balance at end of year 77,196 42,967

The mines for which the provision has been raised are expected to have remaining mine lives in the range of 6 to beyond 30 years.

Provision for mine site rehabilitation

The provision for rehabilitation represents the cost of restoring site damage following initial disturbance. Increases in the provision are capitalised to deferred mining assets to the extent that the future benefits will arise. Costs incurred that related to an existing condition caused by past operations that do not have a future economic benefit are expensed.

Provision for employee entitlements

The provision for employee entitlements represents accrued employee leave entitlements.

2013 2012

$’000 $’000

24. trade and other payaBles – CurrentTrade payables 19,761 35,285

Other payables 22,352 38,117

42,113 73,402

Trade and other payables are interest free, payable within 90 days, predominantly denominated and repayable in ZAR and USD and located in South Africa and Zimbabwe.


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2013 2012

$’000 $’000

25. interest Bearing loans and Borrowings – Current Secured loans (a) 25,272 27,085

Unsecured loans (b) 1,700 4,491

Finance lease liabilities – refer Note 22(b) 4,297 6,619

31,269 38,195

(a) These secured loans are payable to the Development Bank of Southern Africa and the Industrial Development Corporation of South Africa, with an interest rate of JIBAR plus 11% (2012: JIBAR plus 11%). The loans are secured by a charge over substantially all of the assets of the Ridge group and repayments have not yet commenced. At reporting date, Blue Ridge Platinum (Pty) Ltd was in breach of a number of debt covenants primarily due to the mine ceasing mining activities, and accordingly the full balance of $25 million has been classified as current. Blue Ridge Platinum (Pty) Limited and the lenders are in discussions in relation to how the Company will deal with its debt, but as yet no decisions have been taken.

(b) Unsecured loans comprise a loan of $3.3 million payable to Stanbic Bank by a subsidiary, Mimosa Mining Company (Private) Limited. The loan bears interest at 5% and is repayable in monthly instalments of $0.3 million each. $1.7 million of this loan has been classified as current, with the remaining $1.6 million classified as a non-current liability (refer Note 22).

2013 2012

$’000 $’000

26. provisions – CurrentProvision for employee entitlements 4,655 1,054



Additional/(utilisation of) provision 3,735 (109)

Reversal of Platinum Mile Resources (Pty) Ltd provisions on ceasing to be jointly controlled – (67)

Provisions arising from gaining control of Platinum Mile Resources (Pty) Ltd – 134

Net exchange differences (134) (103)


The provision for employee entitlements represents accrued employee leave entitlements.

2013 2012

$’000 $’000

27. issued and unissued Capital

a) Authorised capital

1,590,000,000 (2012: 1,590,000,000) common shares with a par value of $0.05 each 79,500 79,500

5 (2012: 5) “A” class shares with a par value of $2,400 each 12 12

50,000,000 (2012: 50,000,000) preference shares with a par value of $0.15 each 7,500 7,500

87,012 87,012

b) issued capital

486,851,336 (2012: 470,312,578) common shares of $0.05 each fully paid 24,370 23,516

c) unissued shares

Nil common shares (2012: 2,538,758) – 2,436



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2013 2012

Number of shares $’000

movement in issued capital

At 1 July 2011 470,167,206 23,509

Exercise of share options – Aquarius 145,372 7

At 30 June 2012 470,312,578 23,516

At 1 July 2012 470,312,578 23,516

Shares issued as consideration for asset purchase 2,538,758 127

Shares issued to controlled entity – refer Note 28(a) 14,000,000 727

At 30 June 2013 486,851,336 24,370

movement in unissued shares

At 1 July 2011 – –

Shares issued as consideration for asset purchase 2,538,758 2,436

At 30 June 2012 2,538,758 2,436

At 1 July 2012 2,538,758 2,436

Transferred to issued shares (2,538,758) (2,436)

At 30 June 2013 – –

Terms and conditions of issued capital

Common shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company. Preference shares, when issued, have rights and restrictions attaching to them as determined by the Board, in accordance with the bye-laws of the Company.

unissued shares

In February 2009, the Company and AQPSA entered into various agreements with First Platinum (Pty) Ltd (“First Plats”), pursuant to which AQPSA would acquire from First Plats a prospecting and mining business for platinum group metals in the Salene Mining Area and the First Plats Mining Area. The consideration for the acquisition was 2,538,758 Aquarius Common Shares. The sale of the business was subject to the approval by the Minister of the Department of Mineral Resources to transfer the ownership of the relevant mining licences to AQPSA. In June 2012 all conditions precedent were fulfilled and the shares were issued during the current year.

Options

For information regarding the Company’s Option Plans, refer to Note 32.

Black Economic Empowerment (BEE) transaction

South Africa

The BEE transaction announced to shareholders on 26 July 2004 and approved by shareholders in a Special General Meeting on 11 October 2004 was formally executed with the receipt of ZAR860 million in cash by the Aquarius Group on 29 October 2004.

The transaction has two key components, both of which are complete.

The first step saw the BEE consortium, led by Savannah Resources (Pty) Limited (Savcon), subscribe for a 29.5% shareholding in the enlarged share capital of AQPSA as follows: • Savcon were issued with 400 shares in AQPSA for cash of $38.2 million (ZAR234.5 million) and shareholder loans of $97.4 million

(ZAR598.4 million). The terms and conditions of the loans were as follows:i) a loan of ZAR498.4 million that was unsecured, subordinated to AQPSA’s third party debt, was interest free, had no fixed terms of

repayment and ranks pari passu with the other shareholder loans; andii) a loan of ZAR100 million that was unsecured, subordinated to AQPSA’s third party debt, bore interest at a rate of 12.745% per annum,

had no fixed terms of repayment and ranked pari passu with the other shareholder loans.

• Aquarius also agreed to sell 13 AQPSA shares to Savcon for $4.4 million (ZAR27.1 million).


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27. issued and unissued Capital (continued)Black Economic Empowerment (BEE) transaction (continued)

Concurrently Impala Platinum Holdings Limited (Impala) acquired an additional holding in AQPSA from Aquarius to increase their shareholding to 20% in AQPSA following the dilution resulting from the issue of the new shares in AQPSA to the BEE consortium. Aquarius agreed to sell 30 AQPSA shares to Impala for $11.5 million (ZAR71.5 million). This was settled by the cession of ZAR71.5 million of interest bearing loan account to Aquarius.

On 26 April 2007 the Company announced the acquisition of a 3.5% equity interest in AQPSA from Savcon for cash consideration of ZAR342.5 million following the receipt of a Section 11(1) consent from the South African Department of Minerals and Energy. As a result of the transaction Aquarius increased its ownership interest in AQPSA from 50.5% to 54%. The difference between the consideration paid of $33.1 million and the carrying value of the non-controlling interest acquired was treated as an equity transaction. Refer Note 29(e).

On 16 April 2008 the Company announced the buy back by AQPSA of the 20% interest in AQPSA held by Implats for consideration of $504.9 million and the buy back by Aquarius of Implats’ 8.4% interest in Aquarius for a consideration of $285 million. As a result of the transaction Aquarius increased its ownership interest in AQPSA from 54% to 67.5%. The difference between the consideration paid of $504.9 million and the carrying value of the non-controlling interest acquired in AQPSA was treated as an equity transaction. Refer Note 29(e).

The second step occurred on 27 October 2008 where the Company announced that it had completed the final phase of the BEE transaction whereby Savcon exchanged its 32.5% holding in AQPSA for 65,042,856 new shares in Aquarius. As a result of the transaction Aquarius increased its ownership interest in AQPSA from 67.5% to 100%. The difference between the share consideration of $105.1 million and the carrying value of the non-controlling interest acquired in AQPSA has been treated as an equity transaction. Refer Note 29(e).

2013 2012

$’000 $’000

28. treasury shares 16,256,169 (2012: 3,404,919) common shares (refer Note 32) (26,526) (18,128)

movement in treasury shares

Balance at beginning of year – 3,404,919 shares (18,128) (16,190)

Purchased by a controlled entity – 14,000,000 shares (2012: nil shares) (a) (9,305) –

Purchased by the share plan trustee – nil shares (2012: 800,000 shares) – (3,117)

Issued by the share plan trustee – 1,148,750 shares (2012: 228,750) 907 1,179

Balance at end of year – 16,256,169 shares (26,526) (18,128)

(a) In October 2012 the Company issued 14,000,000 new shares to a controlled entity, Aquarius Platinum Investments Limited (API). The issue of these shares was part of a transaction intended to preserve the black economic empowerment (BEE) credentials of the Group by assisting the Group’s BEE Partners in preserving their shareholdings in the Company. As part of that transaction API entered into a limited guarantee and pledged the shares (Security Arrangements) to the financiers of the BEE Partners. The purpose of the Security Arrangements was to provide sufficient share security to the BEE Partners’ financiers. In January 2013 the shares, which formed the limited guarantee and pledge, were released. In May 2013 Aquarius agreed to reinstate the limited guarantee and pledge provided to the BEE Partners’ financiers for 10,200,000 million shares on identical terms and conditions.

2013 2012

$’000 $’000

29. reserves Share premium reserve (a) 1,030,783 1,019,896

Foreign currency translation reserve (b) (92,327) 1,440

Equity benefits reserve (c) 466 466

Ridge replacement options reserve (d) 92 92

Equity reserve (e) (361,826) (361,826)

Convertible bond equity component (f) 62,666 62,666

639,854 722,734



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2013 2012

$’000 $’000

movement in reserves

a) Share premium reserve

Balance at beginning of year 1,019,896 1,019,677

Premium on shares issued 2,309 –

Premium on shares issued to controlled entity 8,578 –

Premium on shares issued on exercise of Aquarius share options – 219

Balance at end of year 1,030,783 1,019,896

The share premium reserve is used to record the premium arising on the issue of shares calculated as the difference between the issue price and the par value of $0.05 per share.

b) foreign currency translation reserve


Loss on translation of foreign subsidiaries (93,767) (4,823)

Balance at end of year (92,327) 1,440

The foreign currency translation reserve is used to record currency differences arising from the translation of the financial statements of foreign operations.

c) Equity benefits reserve

Balance at end of year 466 466

The equity benefits reserve is used to record the value of equity benefits granted to employees and the value of shares reserved under the share plan.

d) Ridge replacement options reserve

Balance at end of year 92 92

The Ridge replacement options reserve is used to record the fair value of options issued to replace options previously on issue by Ridge Mining.

e) Equity reserve

Balance at end of year (361,826) (361,826)

The equity reserve is used to record gains and losses associated with equity transactions with non-controlling interests where the Group maintains control of the subsidiary.

f) Convertible bond equity component


Buyback of convertible bonds – (34)


The convertible bond equity component is used to record the excess of the proceeds received from the issue of convertible bonds over the fair value of the debt component.


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2013 2012

$’000 $’000

30. Commitments a) Operating lease (non-cancellable)

Not later than 1 year 191 266

Later than 1 year but not later than 5 years 273 339

Later than 5 years – 45

464 650

b) finance lease commitments

Not later than 1 year 4,298 6,619

Later than 1 year but not later than 5 years 983 6,420

Total minimum lease payments 5,281 13,039

Less future finance charges (213) (927)

Present value of minimum lease payments 5,068 12,112

Disclosed in the consolidated accounts as:

Current interest bearing liability (Note 25) 4,297 6,619

Non-current interest bearing liability (Note 22) 771 5,493

5,068 12,112

c) Capital expenditure (non-cancellable) 7,912 6,442

These commitments represent contractual commitments relating to development activities at the Kroondal and Mimosa projects and include Aquarius’ share of capital expenditure associated with the capital development of those mines.

d) Other commitments

In May 2011, the Company and AQPSA entered into a Sale of Rights Agreement with Northam Platinum Limited to acquire the platinum group metals and associated base metals mineral rights on farms adjacent to AQPSA’s Everest Mine for R1.2 billion. The Agreement was subject to written consent by the Minister of Mineral Resources to amend the Everest Mine Converted Mining Right to include Booysendal South. As part of the agreement a $15 million deposit was placed in an escrow account in November 2011. During the year the conditions precedent failed to be satisfied within the deadline required under the Agreement. As a consequence the Agreement lapsed, the $15 million deposit was refunded and the Group has no further commitment in relation to that Agreement.

31. ContingenCiesPursuant to a financing facility, AQPSA’s commercial bankers have issued financial guarantees on behalf of AQPSA totalling ZAR370million ($37 million) (2012: ZAR491 million and $60 million). The guarantees are for the rehabilitation, closure obligations and other purposes of AQPSA and are secured by a first ranking fixed and floating charge over all the assets of AQPSA.

32. share-Based payment plans diRECTORS’ ANd EmPLOyEES’ ShARE ANd OPTiON PLANSAquarius has a Share Plan and an Option Plan (“Plans”) for the Chief Executive Officer and employees. The Remuneration Committee administers the Company’s Plans, which were established pursuant to a resolution passed at the Annual General Meeting of Aquarius held on 3 December 2001. Participation in the Plans will be at the discretion of the Remuneration Committee, having regard to:a) the seniority of the participant and the position the participant occupies with the Company or subsidiary;b) the length of service of the participant with the Company or subsidiary;c) the record of employment of the participant with the Company or subsidiary;d) the potential contribution of the participant to the growth and profitability of the Company or subsidiary; ande) any other matters which the committee considers relevant.

OPTiON PLANOptions granted under the Option Plan may not be transferred without written approval from the Board of Directors. Each option entitles the holder to one fully paid common share, which ranks equally in all respects with other shares on issue. The option exercise price approximates the fair value of the shares at the date of offer, being the average of the last sold prices on the LSE in the five dealing days prior to the offer date. No person entitled to exercise options has any right by virtue of the option to participate in any share issue of the Company or any related body corporate. Information with respect to the number of options granted under the Option Plan is as follows:



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Number of Options

Options

Balance at beginning of

year GrantedForfeited/cancelled Exercised

Balance at end of year

Exercise price of £1.11, granted 21 November 2003, expiring 21 November 2013 (a) 120,000 – – – 120,000

Total 120,000 – – – 120,000

Options exercisable 120,000 120,000

(a) Options vested on grant date and are exercisable on the following terms:

• After 12 months have lapsed from the acceptance date, in respect of not more than one-third of the total number of those options;

• After 24 months have lapsed from the acceptance date, in respect of not more than two-thirds of the total number of those options; and

• After 36 months have lapsed from the acceptance date, in respect of the balance of those options.

The weighted average remaining contractual life for options outstanding at the end of the financial year is 0.4 years (2012: 1.4 years).

ShARE PLANIn 2008 the Company adopted a Share Plan for eligible participants. Under the Share Plan the Board can authorise the Trustee to purchase shares and hold them as either unallocated shares or as shares for and on behalf of an eligible participant. The participant may require the Trustee to transfer the plan shares held by the Trustee on behalf of the participant to the participant subject to satisfaction of any performance criteria or vesting conditions imposed by the Board. The Board may also direct the Trustee to allocate to a participant shares purchased as unallocated shares.

If a participant departs prior to satisfaction of any performance criteria or vesting conditions imposed by the Board then, subject to Board discretion, the shares that were held on behalf of the participant will be held by the Trustee as unallocated shares.

During the year nil shares (2012: 800,000) were purchased by the trustee.

During the year 1,148,750 shares (2012: 228,750) were issued. At the time of issue the average share price was $0.79 resulting in an expense of $0.9 million. The shares vested immediately.

PENSiONS ANd OThER POST EmPLOymENT BENEfiT PLANSEmployer entities within the Group participate in defined contribution pension plans for eligible employees in accordance with the applicable laws in their country of domicile. Contributions made by the Group ranged from 8% to 20% of the employees’ base salary.

2013 2012

$’000 $’000

33. related party disClosuresCompensation of directors and key management personnel of the Group

Compensation of directors:

Short-term benefits 3,185 2,160

Post employment retirement benefits 415 76


4,281 3,319

Compensation of key management personnel:

Short-term benefits 2,355 1,855

Post employment retirement benefits 142 204

Share-based payments 206 –

2,703 2,059

Total remuneration of directors and key management personnel of the Company in respect of the financial year 6,984 5,378


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33. related party disClosures (continued)RELATEd PARTiES

NameCountry of incorporation % Equity interest

2013 2012

a) Controlled entities

Details of significant controlled entities are as follows:

Aquarius Platinum Corporate Services (Pty) Ltd Australia 100% 100%

Aquarius Platinum (South Africa) (Proprietary) Limited South Africa 100% 100%

Aquarius Platinum (SA) Corporate Services (Proprietary) Limited South Africa 100% 100%

Aquarius Platinum (SA) (Pty) Ltd Rehabilitation Trust South Africa 100% 100%

Platinum Mile Resources (Pty) Ltd South Africa 91.7% 91.7%

Ridge Mining Limited plc UK 100% 100%

b) Jointly controlled entities

Details of significant jointly controlled entities are as follows:

Mimosa Investments Limited Mauritius 50% 50%

Mimosa Holdings (Private) Limited Zimbabwe 50% 50%

Mimosa Mining Company (Private) Limited Zimbabwe 50% 50%

Blue Ridge Platinum (Pty) Ltd South Africa 50% 50%

Sheba’s Ridge Platinum (Pty) Ltd South Africa 39% 39%

c) Transactions within the Group

During the financial year, unsecured loan advances were made by subsidiaries within the Group and between subsidiaries and the parent entity. Certain such loans carried a discounted rate of interest. Intercompany loan balances have been eliminated in the financial statements of the Group.

d) Smaller related party transactions – issue and pledge of 14 million new shares in order to preserve BEE credentials

As announced on 3 October 2012 and 24 May 2013, the Company has on two separate occasions pledged shares in the Company as part of a transaction to preserve the black economic empowerment credentials of the Company. The transactions both constituted a “smaller related party transaction” pursuant to UK Listing Rule 11.1.10 and these disclosures are made pursuant to that rule.

Savannah Platinum SPV (Savannah), Chuma Platinum SPV (Chuma) and Malibongwe Platinum SPV (Malibongwe) (together, the BEE Partners) each have share funding arrangements in place in respect of their shareholdings in the Company with South African based financial institutions which were due to expire at the end of October 2012. The financial institutions agreed to advance new loans to finance the redemption of the existing funding on the condition that each of the BEE Partners’ loan facilities are secured against shares in the Company which, as a condition of the loan agreements, must have an aggregate market value of at least two times the loan amount. Failure to refinance the share funding arrangements may have resulted in the financial institutions selling some or all of the BEE Partners’ shares in the Company and thereby affecting the Company’s black economic empowerment status.

The Board resolved that it was in the Company’s interest to preserve the current holdings of the BEE Partners by issuing 14 million new shares in the Company to be held by a new subsidiary of the Company and to secure the giving of a limited guarantee by that new subsidiary in favour of the financial institutions in respect of the BEE Partners’ share funding arrangements (the First Transaction).

The First Transaction was automatically released in January 2013 when the market price of shares in the Company recovered such that the security requirements of the BEE Partners’ share funding arrangements were met by the market value of the shares in the Company actually held by the BEE Partners. However, after weakening of the market price of shares in the Company in March and April, it became necessary for the Company to reinstate the pledge in respect of 10.2 million shares in the Company on identical terms in order to ensure the sufficiency of security under the BEE Partners’ share funding arrangements (the Second Transaction).



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As the purpose of the First Transaction and the Second Transaction (together the Transactions) was to provide credit support to the BEE Partners in order to preserve the Company’s black economic empowerment credentials, the BEE Partners did not provide any consideration for the Company’s share-backed guarantee in favour of the BEE Partners’ financiers. However, the Company did put in place several contractual terms to prevent, to the extent possible, unintended benefits to Savannah as a consequence of the Transactions, including:

• agreeing that the BEE Partners do not benefit from the economic value of the security or any increase in the value of the pledges shares in the Company; and

• agreeing that any breach of the share funding arrangement results in Savannah’s owns shares in the Company being sold before any of the shares in the Company held by the Company’s subsidiary.

Both the First Transaction and the Second Transaction provided a benefit to Savannah. Savannah is a related party of the Company for the purposes of UK Listing Rule 11.1.4R(5) by way of its association with Mr Zwelakhe Mankazana and Mr Kofi Morna who:

• are both directors of the Company, Savannah and Savannah Resources (Proprietary) Limited; and

• each hold 25% of Savannah Resources (Proprietary) Limited which in turn holds 50% of Savannah.

However, neither of the Transactions exceeded 5% in any of the “percentage ratios” prescribed by UK Listing Rule 11.1.10 (including when aggregated pursuant to UK Listing Rule 11.1.11(1)). Accordingly, the Company concluded that the Transactions each constituted a “smaller related party transaction” pursuant to UK Listing Rule 11.1.10. This position was confirmed by the Company’s independent UK adviser Liberum Capital Limited who also concluded that each Transaction was fair and reasonable as far as the shareholders of the Company are concerned. Pursuant to UK Listing Rule 11.1.10(2)(c), the Company undertook in writing to the UKLA to make the above disclosure in this Annual Report.

34. finanCial instrumentsA) fiNANCiAL RiSk mANAGEmENT OBJECTivES ANd POLiCiESThe Group’s management of financial risk is aimed at ensuring net cash flows are sufficient to:

• meet all its financial commitments;

• maintain the capacity to fund corporate growth activities; and

• pay a reasonable dividend.

The Group monitors its forecast financial position on a regular basis. The Group has a Treasury Committee that meets quarterly and considers cash flow projections for the following 12 months in detail, taking into consideration the impact of market conditions including metal prices and foreign exchange rates. The Committee also receives reports from independent foreign exchange consultants and receives presentations from advisors on current and forecast economic conditions.

Credit risk, liquidity risk and market risk (including foreign exchange, commodity price, interest rate and price risk) arise in the normal course of the Group’s business. The Group’s principal financial instruments comprise cash, short-term deposits, interest bearing receivables and interest bearing liabilities. Other financial instruments include trade receivables and trade payables, which arise directly from operations. The Group’s forecast financial risk position with respect to key financial objectives and compliance with treasury practice are regularly reported to the Board. The Group’s objectives, policies and processes for managing risks arising from financial instruments have not changed from the previous financial year.

B) mARkET RiSk(i) Foreign exchange risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commitments, assets and liabilities that are denominated in a currency that is not the functional currency for each entity within the Group. The Group’s borrowings and cash deposits are largely denominated in US Dollars, South African Rand and Australian Dollars.

Currently there are no foreign exchange hedge programmes in place, however, the Group treasury function manages the purchase of foreign currency to meet operational requirements.


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34. finanCial instruments (continued)B) mARkET RiSk (continued) (i) Foreign exchange risk (continued)

2013 2012

$’000 $’000

At reporting date entities which have a USD functional currency have exposure to ZAR denominated financial instruments as follows:financial assetsCash and cash equivalents 142 1,054At reporting date entities which have a ZAR functional currency have exposure to USD denominated financial instruments as follows:financial assetsTrade and other receivables 26,943 26,431financial liabilitiesInterest bearing loans (a) – 69,978(a) This amount includes intercompany payables denominated in US Dollars which are eliminated on

consolidation. The gains or losses recorded on re-measurement of these intercompany payables from US Dollars to South African Rand are not eliminated on consolidation.

At reporting date entities which have a USD functional currency have exposure to AUD denominated financial instruments as follows:financial assetsCash and cash equivalents 5,012 78,555At reporting date entities which have a USD functional currency have exposure to GBP denominated financial instruments as follows:financial assetsCash and cash equivalents 20,727 46,060

The following table summarises the sensitivity of financial instruments held at reporting date to movements in the exchange rate of the South African Rand, Great British Pound and Australian Dollar for entities with a US dollar functional currency, with all other variables held constant, and the sensitivity of financial instruments held at reporting date to movements in the US dollar for entities with a South African Rand functional currency. The South African Rand, Great British Pound, Australian Dollar and US dollar instruments have been assessed using the sensitivities indicated in the table. These are based on reasonably possible changes, over a financial year, using the observed range of actual historical rates for the preceding 5 year period.

Impact on profit/equity pre tax gain/(loss)

2013 2012

$’000 $’000

Judgements of reasonable possible movements

Currency exposure for entities with uSd functional currency

10% strengthening of ZAR against USD (2012: 8.6%) 16 99

10% weakening of ZAR against USD (2012: 6.4%) (13) (64)

10% strengthening of AUD against USD (2012: 10%) 501 7,856

10% weakening of AUD against USD (2012: 10%) (456) (7,141)

10% strengthening of GBP against USD (2012: 10%) 2,072 4,606

10% weakening of GBP against USD (2012: 10%) (1,884) (4,187)

Currency exposure for entities with zAR functional currency

10% strengthening of USD against ZAR (2012: 8.6%) 2,694 (9,722)

10% weakening of USD against ZAR (2012: 6.4%) (2,694) 7,292



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(ii) Commodity price risk

The Group’s revenues are exposed to commodity price fluctuations, in particular movements in the price of platinum group metals (PGMs). The Group regularly measures exposure to commodity price risk by stress testing the Group’s forecast financial position to changes in PGM prices. The Group does not hedge commodity prices.

The financial instruments exposed to movements in metal prices are as follows:

2013 2012

$’000 $’000

financial assetsReceivables (gross notional amount) 127,698 160,540

127,698 160,540

These receivables comprise quotational period embedded derivatives that are carried at fair value in accordance with the policy set out in Note 5(h).

The following table summarises the sensitivity of financial instruments held at reporting date to movements in the relevant forward commodity price, with all other variables held constant. The sensitivities are based on reasonably possible changes, over a financial year, using observed ranges of actual historical rates.


2013 2012

$’000 $’000

Judgements of reasonable possible movements10% (2012: 10%) increase in platinum, palladium and rhodium prices; 10% (2012: 5%) increase in gold price 11,939 13,75910% (2012: 10%) decrease in platinum, palladium and rhodium prices; 10% (2012: 5%) decrease in gold price (11,939) (13,759

(iii) Interest rate risk

Interest rate risk is the risk that the Group’s financial position will be adversely affected by movements in interest rates.

The Group’s main interest rate risk arises from short-term loans with interest charges based on either the London Inter-Bank Offered Rate (LIBOR) or the Johannesburg Interbank Acceptance Rate (JIBAR). Floating rate debt exposes the Group to cash flow interest rate risk. Cash holdings are subject to interest rate risk of the currency of the deposit. The convertible bond has a fixed interest rate of 4%. All other financial assets and liabilities in the form of receivables, investments in shares and payables are non-interest bearing.

The Group does not engage in any hedging or derivative transactions to manage interest rate risk. In conjunction with external advice, management consideration is given on a regular basis to alternative financing structures with a view to optimising the Groups’ funding structure.

The financial instruments exposed to movements in variable interest rates are as follows:

2013 2012

$’000 $’000

financial assetsCash and cash equivalents 102,932 180,088Restricted cash in environmental trusts 16,712 18,055

119,644 198,143financial liabilitiesInterest bearing liabilities exposed to LIBOR * 87,467 117,932Interest bearing liabilities and derivatives exposed to JIBAR 25,271 27,084

112,738 145,016

Cash and cash equivalents are exposed to movements in USD and ZAR cash deposit rates.

* Interest bearing liabilities include $87 million (2012: $115 million) relating to the pre-financing of delivered PGM concentrates that has been offset against trade receivables in the statement of financial position. Refer Note 19(a).


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34. finanCial instruments (continued)B) mARkET RiSk (continued)(iii) Interest rate risk (continued)

The following table summarises the sensitivity of the financial instruments held at reporting date, following a movement in variable interest rates, with all other variables held constant. The sensitivities are based on reasonably possible changes over a financial year, using the observed range of actual historical rates for the preceding 5 year period.


2013 2012

$’000 $’000

Judgements of reasonable possible movements

Cash

– increase +50bps (2012: +50bps) 513 900

– decrease -50bps (2012: -50bps) (513) (900)

Restricted cash in environmental trusts

– increase +50bps (2012: +50bps) 84 90

– decrease -50bps (2012: -50bps) (84) (90)

Interest bearing liabilities – sensitive to LIBOR

– increase +100bps (2012: +100bps) (875) (1,179)

– decrease 0bps (2012: 0bps) – –

Interest bearing liabilities – sensitive to JIBAR

– increase +100bps (2012: +100bps) (253) (271)

– decrease 0bps (2012: 0bps) – –

(iv) Price risk

Price risk is the risk that the Group’s financial position will be adversely affected by movements in the market value of its available-for-sale financial assets. The financial instruments exposed to movements in market value are as follows:

2013 2012

$’000 $’000

financial assets

Other financial assets 3,433 2,785

The exposure to price risk is not considered material to the Group.

C) LiquidiTy RiSkThe liquidity position of the Group is managed to ensure sufficient liquid funds are available to meet financial commitments in a timely and cost effective manner. The Group Treasury Committee continually reviews the liquidity position including cash flow forecasts to determine the forecast liquidity position and maintain appropriate liquidity levels. Notes 22 and 25 detail the repayment obligations in respect of the amount of the facilities, and Note 30(d) includes details of other commitments.



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The contractual maturity analysis of payables at the reporting date was as follows:

Payables Ageing Analysis $’000

Total < 6 months 6-12 months 1-5 years > 5 years

2013

Trade payables 19,761 19,761 – – –

Other payables 25,250 22,352 – 843 2,055

Loans and borrowings 331,756 28,270 2,999 300,487 –

Total payables 376,767 70,383 2,999 301,330 2,055

2012

Trade payables 35,285 35,285 – – –

Other payables 41,297 38,117 – 913 2,267

Loans and borrowings 345,171 33,999 4,245 305,366 1,561

Total payables 421,753 107,401 4,245 306,279 3,828

d) CREdiT RiSkCredit risk is the risk that a contracting entity will not complete its obligation under a financial instrument that will result in a financial loss to the Group. The carrying amount of financial assets represents the maximum credit exposure. Receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. The Group’s credit risk is limited to the carrying value of its financial assets.

At reporting date there is a significant concentration of credit risk represented in the cash and trade receivables balance. With respect to trade receivables, this is due to the fact that the majority of sales are made to two specific customers as per contractually agreed terms. The two customers, being Impala Platinum Holdings Limited and Rustenburg Platinum Mines Limited, have complied with all contractual sales terms and have not at any stage defaulted on amounts due.

The maximum exposure to credit risk at the reporting date was as follows:

2013 2012

$’000 $’000

Current

Cash and cash equivalents 102,932 180,088

Trade receivables 47,242 58,402

Other receivables 11,182 28,698

161,356 267,188

Non-current

Restricted cash in environmental trusts 16,712 18,055

Receivable from government 28,537 28,537

Other receivables 22,558 27,527

67,807 74,119


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34. finanCial instruments (continued)d) CREdiT RiSk (continued)The ageing of receivables at the reporting date was as follows:

Receivables Ageing Analysis $’000

Total < 6 months 6-12 months 1-5 years > 5 years

2013

Trade receivables 47,242 47,242 – – –

Other receivables 33,740 11,182 – 22,558 –

Receivable from government 28,537 – – 28,537 –

Total receivables 109,519 58,424 – 51,095 –

2012

Trade receivables 58,402 58,402 – – –

Other receivables 56,225 28,698 – 27,527 –

Receivable from government 28,537 – – 28,537 –

Total receivables 143,164 87,100 – 56,064 –

E) CAPiTAL mANAGEmENTThe Group treasury function is responsible for capital management. This involves the use of corporate forecasting models, which facilitates analysis of the Group’s financial position including cash flow forecasts to determine the future capital management requirements. Group treasury monitors gearing and compliance with various contractual financial covenants. The Group defines capital as total shareholders’ equity.

Capital management is undertaken to ensure a secure, cost effective supply of funds to ensure the Group’s operating and capital expenditure requirements are met. The mix of debt and equity is regularly reviewed. The Group does not have a target debt/equity ratio, but has a policy of maintaining a flexible financing structure so as to be able to take advantage of new investment opportunities that may arise. At 30 June 2013 the Group’s gearing ratio is 102% (2012: 45%).

During the year the Company paid no dividends (2012: $19 million). The Board maintains a policy of balancing returns to shareholders with the need to fund growth.

f) fAiR vALuE The fair value of a financial asset or a financial liability is the amount at which the asset could be exchanged or liability settled in a current transaction between willing parties in an arm’s length transaction. The fair values of cash and cash equivalents, trade and other receivables and trade and other payables approximate their carrying values, as a result of their short maturity or because they carry floating rates of interest. The fair value of financial instruments traded in active markets such as publicly traded available-for-sale securities are based on quoted market prices at the reporting date. The quoted market price used for available-for-sale securities held by the Group is the current bid price. The fair value of financial instruments that are not traded in an active market such as unlisted securities and convertible bonds are determined using valuation techniques. Such techniques include using recent arm’s length market transactions and option pricing models.

Available-for-sale financial assets and quotational period embedded derivatives are carried at fair value. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: Quoted (unadjusted) prices in active markets for identical assets and liabilities.

Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

Available-for-sale financial assets of $3 million are measured using level 1 valuation techniques. Quotational period embedded derivatives of $128 million are measured using level 2 valuation techniques with reference to consensus forecasts and spot metal prices and exchange rates at the reporting date. The valuation techniques used have not changed for each of these financial instruments from the prior period.



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35. Business ComBinationDuring the prior year, pursuant to a Sale of Shares Agreement, Aquarius Platinum (South Africa) (Proprietary) Limited acquired 41.7% of the voting shares of Platinum Mile Resources (Pty) Ltd. The Group previously held 50% of the voting shares of Platinum Mile Resources (Pty) Ltd and accounted for the investment as an investment in a jointly controlled entity. As a consequence of the acquisition of the additional 41.7% the Group holds 91.7% and controls Platinum Mile Resources (Pty) Ltd.

The gaining of control of Platinum Mile Resources (Pty) Ltd was recognised as a business combination at 30 November 2011. The Group elected to measure the non-controlling interest in the acquiree at the proportionate share of its interest in the acquiree’s identifiable net assets. The assessment of the fair value of the identifiable assets and liabilities of Platinum Mile Resources (Pty) Ltd as at the date of acquisition is:

$’000

fAiR vALuE RECOGNiSEd ON ACquiSiTiON

Assets

Cash and cash equivalents 3,976

Trade and other receivables 4,741

Inventories 541

Property, plant and equipment 12,213

Identifiable intangible assets – contracts for treatment of tailings material 87,562

109,033

Liabilities

Payables (2,367)

Income tax payable (1,404)

Deferred tax liabilities (28,413)

Provisions (508)

(32,692)

Total identifiable net assets at fair value 76,341

Non-controlling interest measured at proportionate share of net assets (6,336)

Purchase consideration 70,005

COST Of ThE COmBiNATiON

Fair value of original 50% held 56,282

Cash paid for additional 41.7% 13,723

70,005

NET CASh CONSidERATiON PAid

Cash paid for additional 41.7% 13,723

Cash at acquisition date (3,976)

Cash previously recognised on 50% 1,988

11,735


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36. events after reporting dateThere were no material events subsequent to 30 June 2013 that have not been reflected in the financial statements.

2013 2012

$’000 $’000

37. auditor’s remuneration Amounts received or due and receivable by Ernst & Young for:

– an audit or review of the financial report of the Company and any other entity in the consolidated Group 570 769

– assurance related services provided as part of the Company’s premium London Stock Exchange Listing – 166

– income tax related services 35 53

– other services in relation to the Company and any other entity in the consolidated Group 131 37

736 1,025



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directorS’ declaration

In accordance with a resolution of the Board of Directors of Aquarius Platinum Limited, I state that:

In the opinion of the directors:

a) the financial statements and notes of the consolidated entity:

i) give a true and fair view of the financial position as at 30 June 2013 and the performance for the year ended on that date of the consolidated entity; and

ii) comply with International Accounting Standards; and

b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Board

Jean Nel

director

27 September 2013


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We have audited the accompanying financial report of Aquarius Platinum Limited and the entities it controlled (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2013, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.

diRECTORS’ RESPONSiBiLiTy fOR ThE fiNANCiAL REPORTThe directors of the Company are responsible for the preparation and fair presentation of this financial report in accordance with International Financial Reporting Standards. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

AudiTOR’S RESPONSiBiLiTyOur responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

iNdEPENdENCEWe are independent of the Company, and have met the independence requirements of Australian and international professional ethical pronouncements.

AudiTOR’S OPiNiONIn our opinion, the consolidated financial report presents fairly in all material respects the financial position of the Group as of 30 June 2013, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards.

Ernst & youngPerth27 September 2013

independent audit report to memberS of aquariuS platinum limited

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The following information was reflected in the Company’s registers and other records as at 2 September 2013.

diSTRiBuTiON Of ShAREhOLdERS Ordinary shares

Number of holders

1 – 1,000 3,328

1,001 – 5,000 2,632

5,001 – 10,000 715

10,001 – 100,000 812

100,001 – and over 351

Total 7,838

There were 637 holders of ordinary shares holding less than a marketable parcel.

SuBSTANTiAL ShAREhOLdERS The following shareholders have a substantial shareholding in the Company:

ShareholderNumber of sharesFully paid shares %

HSBC Custody Nominees (Australia) Limited 30,345,098 6.23

JP Morgan Nominees Australia Limited 25,725,808 5.28

vOTiNG RiGhTSOnly the shares carry voting rights, which upon a poll are one vote for each share held.

additional Shareholder information


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additional Shareholder information ContInued

TwENTy LARGEST hOLdERS Of fuLLy PAid ShARES

ShareholderNumber of

shares %

1 HSBC Custody Nominees (Australia) Limited 30,345,098 6.23

2 JP Morgan Nominees Australia Limited 25,725,808 5.28

3 State Street Nominees Limited (OM02) 21,928,909 4.50

4 Chase Nominees Limited 20,337,565 4.18

5 Savannah Resources Limited 19,004,767 3.90

6 National Nominees Limited 12,649,270 2.60

7 Chase Nominees Limited (LEND) 10,542,105 2.17

8 HSBC Global Custody Nominee (UK) Limited (357206) 8,536,057 1.75


10 Barclayshare Nominees Limited 6,401,728 1.31


12 JP Morgan Nominees Australia Limited (Cash Income A/C) 6,208,357 1.28

13 Citicorp Nominees Pty Ltd 5,210,254 1.07

14 Nortrust Nominees Limited (ABERFRTH) 5,196,490 1.07

15 Credit Suisse Securities (Europe) Limited (Principal) 5,031,831 1.03

16 Morstan Nominees Limited 4,420,856 0.91

17 State Street Nominees Limited (W73M) 4,343,895 0.89

18 TD Direct Investing Nominees (Europe) Limited (SMKTNOMS) 3,986,673 0.82

19 Morstan Nominees Limited (SEG) 3,717,486 0.76

20 BNY Mellon Nominees Limited (BSDTGUSD) 3,600,022 0.74

Top 20 shareholders 211,557,435 43.45

Other shareholders 275,293,901 56.55

Total 486,851,336 100.00

iNCORPORATiON ANd GENERAL iNfORmATiONThe Company was incorporated in Bermuda as an exempted company and is subject to Bermudian law.

In Australia, the Company is registered as a foreign company under the Australian Corporations Act (registration no. ARBN 087 577 893). It is not subject to Chapter 6 of the Australian Corporations Act dealing with the acquisition of shares (including substantial shareholdings and takeovers). However, the Company has inserted into its bye-laws some restrictions on the ability to acquire shares in the Company. These sections of the bye-laws reflect the restrictions on acquisitions of shares contained in Parts 6.1 and 6.2 of the Australian Corporations Act. The Company has undertaken to comply with the Listing Rules of the ASX.

Bermuda law does not impose any limitation on the acquisition of securities in the Company.

CORPORATE iNfORmATiON The consolidated financial statements for Aquarius for the year ended 30 June 2013 were authorised for issue in accordance with a resolution of the directors on 27 September 2013. Aquarius is a limited company incorporated and registered as an exempted company in Bermuda. As an exempted company, Aquarius is authorised to carry on business outside Bermuda but may not (except in certain circumstances) carry on business within Bermuda.

The consolidated financial statements have been presented using United States Dollars as the presentation currency. The US Dollar is traded at par with the Bermuda Dollar and accepted as the currency of Bermuda’s main industries.

The registered office of Aquarius is located at Clarendon House, 2 Church Street, Hamilton, Bermuda.

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The following definitions apply throughout the financial statements:

Amplats Anglo American Platinum Limited

Aquarius Aquarius Platinum Limited, the parent entity, a company incorporated in Bermuda with registration number EC 26290

AqPSA Aquarius Platinum (South Africa) (Proprietary) Limited (registration number 2000/000341/07), a company incorporated in the Republic of South Africa and a controlled entity of Aquarius

ASACS Aquarius Platinum (SA) Corporate Services (Proprietary) Limited

ASx Australian Securities Exchange

Aud Australian Dollar

CTRP Chrome Tailings Retreatment Plant

GBP Great Britain Pound

implats Impala Platinum Holdings Limited (registration number 1957/001979/06), a company incorporated in the Republic of South Africa

JSE Johannesburg Stock Exchange

miL Mimosa Investments Limited (registration number 26645/6593), a company incorporated in the Republic of Mauritius and a jointly controlled entity of Aquarius and Implats (formerly known as ZCE Platinum Limited)

mimosa Mimosa Mining Company (Private) Limited, a company incorporated in Zimbabwe

mPRdA Mineral and Petroleum Resources Development Act, No. 28, 2002

LSE London Stock Exchange

PGm Platinum group metals comprising mainly platinum, palladium, rhodium and gold

Platinum mile Platinum Mile Resources (Proprietary) Limited

PSA1 Pooling and Sharing Agreement between AQPSA and RPM Ltd on Kroondal

PSA2 Pooling and Sharing Agreement between AQPSA and RPM Ltd on Marikana

TkO TKO Investment Holdings Limited, a company incorporated in the Republic of South Africa and a controlled entity of AQPSA

uSd United States Dollar

zAR South African Rand

gloSSary of termS


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forward-looking Statement

Certain forward-looking statements may be contained in this report which include, without limitation, expectations regarding metal prices, estimates of production, operating expenditure, capital expenditure and projections regarding the completion of capital projects as well as the financial position of the company. Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward-looking statements as a result of, among other factors, changes in economic and market conditions, changes in the regulatory environment and other business and operational risks.

No representation or warranty, express or implied, is made by Aquarius that the material contained in this report will be achieved or prove to be correct. Except for statutory liability which cannot be excluded, each of Aquarius, its officers, employees and advisers expressly disclaims any responsibility for the accuracy or completeness of the material contained in this report and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this report or any error or omission therefrom. Aquarius accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this report or any other information made available to a person nor any obligation to furnish the person with any further information.

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exempt Company numBerEC 26290

Incorporated in Bermuda

registered offiCeClarendon House

2 Church Street

Hamilton

Bermuda

Board of direCtorsNicholas Sibley

Jean Nel

David Dix

Edward Haslam

Tim Freshwater

Kofi Morna

Zwelakhe Mankazana

Sonja de Bruyn Sebotsa

Company seCretaryWilli Boehm

stoCk exChange listingsAquarius Platinum Limited is listed on the Australian Securities Exchange (AQP.AX), the London Stock Exchange (AQP.L), the Johannesburg Stock Exchange South Africa (AQP.ZA) and has a sponsored Level 1 ADR program in the United States.

share registers AuSTRALiAComputershare Investor Services Pty Limited

Level 2, Reserve Bank Building

45 St Georges Terrace

Perth, Western Australia 6000

Telephone: +61 8 9323 2000

Facsimile: +61 8 9323 2033

uNiTEd kiNGdOmComputershare Investor Services PLC

The Pavilions

Bridgwater Road

Bristol BS99 6ZZ

Telephone: +44 870 889 3193

Facsimile: +44 870 703 6119

SOuTh AfRiCAComputershare Investor Services (Pty) Ltd

Ground Floor

70 Marshall Street

Johannesburg, South Africa 2001

Telephone: +27 11 370 5000

Facsimile: +27 11 688 5200 (General)

Facsimile: +27 11 688 5238 (Proxies)

internet addresswww.aquariusplatinum.com

[email protected]

corporate directory

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www.aquariusplatinum.com

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2013 For personal use only

Documents

Transcript of 2013 For personal use only