South Africa-focused miner Aquarius Platinum Ltd, which is seeking to refinance $167 million in debt, is in talks about possible mergers, the firm said on Thursday.

Aquarius, which posted a first half net loss of $70 million, did not identify which firms were involved in the discussions.

Chief Executive Stuart Murray said due to weak metals prices and a slide in share prices, companies were now valuing themselves based on their net asset value (NAV).

It probably means that acquisition or consolidation or whatever will probably be based around NAV to NAV. The price of assets and the value of assets... those have disconnected, he told a conference call.

And certainly we are in the midst of some discussions like that. I think the whole thing is the consolidation of the many to produce a few stronger players.

Analysts have long called for a reduction in the large number of small platinum players in South Africa that grew rapidly during a commodities boom but are currently under heavy pressure from a collapse in prices.

Aquarius' shares, which have tumbled 80 percent since last May, rose 4.4 percent to 183.5 pence by 1120 GMT, outperforming a 1.5 percent increase in the UK mining index.


Aquarius, which had $87 million in cash at the end of 2008, is seeking to refinance its $167 million bridge debt facility due in June with South Africa's Rand Merchant Bank, Murray said.

RMB is the investment banking unit of South Africa's FirstRand.

Negotiations are at an advanced stage and we're moving to documentation on a proposal to refinance this debt, he said.

Details were expected to be released in three to four weeks.

Weak platinum prices helped pushed the firm into a net loss of $70.1 million for the last six months of 2008 compared with the $75 million to $85 million guidance it gave on January 27 and the profit of $106.6 million in the same period a year earlier.

Aquarius said it would not pay an interim dividend, but would reconsider the decision following a successful debt refinancing. It paid a 10 cent a share dividend in the same period last year.

Attributable production fell 6 percent from the previous year to 260,208 platinum group metals (PGM) ounces, mainly due to a temporary suspension at its Everest mine in South Africa.

The declines in the PGM basket price resulting from a difficult global environment along with the implications of the Everest suspension have significantly impacted the company, Murray said.

The group cut its 2009 production target by 100,000 PGM ounces to 475,000 PGM ounces, partly due to the ongoing suspension of Everest.

First-half revenue dropped 67 percent to $139.2 million as the average basket prices for PGMs fell 19 percent to $1,211 an ounce, while cash costs increased 17 percent to $639 an ounce.

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