Featured on Daily ShareChat as a SELL in February 2012 at $2.19 Aquarius Platinum's (ASX: AQP) shares have more than halved in value to 99 cents and a recovery in the share price and in the company's trading conditions still looks some way off.
In the latest update to the market today, AQP reports that trading conditions in the platinum industry are expected to remain difficult in the short to medium term and these conditions have rendered operations at its Marikana project as uneconomic.
AQP and its partners at Marikana have agreed to place operations on ‘care and maintenance' due to low platinum group metal (PGM) basket prices and this ‘care and maintenance' is expected to preserve ore reserves until improved economic conditions merit their extraction.
In other less than encouraging news for shareholders a fire occurred at it's jointly owned Mimosa operations in Zimbabwe which saw mining output average 70% of normal production for 3 weeks, however current stockpiles covered the production shortfall.
The decline in AQP's share price has also meant that the company will be removed from the S&P/ASX 100 Index at the close of trade on 15 June 2012 and replaced by both Aurora Oil & Gas and SP AusNet.
This then leaves Index Fund Managers no option but to sell AQP to rebalance their Index funds to match the S&P/ASX 100 Index which is adding to the selling pressure.
AQP is a high-beta stock and not the type of investment to be holding in a portfolio given the challenging global macro-economic conditions.
Despite the bad news, and with global sharemarkets teetering on the edge of a sell-off there still seems very little reason to invest in the shares.
Status: SELL/AVOID
AQP's shares today traded at 99c
For portfolio, sharemarket and fixed income enquires contact: Dan Stratful at Investment Research Group (IRG) Authorised Financial Adviser (AFA) 0800 437 8489, 09 304 0232, dan.stratful@irg.co.nz **A disclosure statement is available, on request and free of charge.
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