UPDATE 2-Aquarius Q3 net lifted 59 pct, eyes higher output

(Adds analyst comment, shares)

By Eric Onstad

LONDON, April 24 (Reuters) - Aquarius Platinum (AQP.L) posted on Thursday a 59 percent surge in third-quarter net profit to $90.8 million as record prices outweighed weaker production, and said fourth-quarter output was due to improve.

The firm's shares, which have shot up 40 percent this year, rose 0.3 percent to 800 pence by 0810 GMT, outperforming a 1.6 percent fall in the UK mining index .FTNMX1770.

"Aquarius has reported better than expected Q3 '08 financial results," said analyst Rebecca O'Dwyer at Investec Securities, which is joint broker to the company.

"Record PGM (platinum group metal) prices and a weaker rand drove quarterly earnings to an all-time high."

Most of the company's operations are in South Africa and it has one mine in Zimbabwe.

Seymour Pierce upgraded Aquarius to "buy" from hold" on Thursday after it raised PGM price forecasts.

Aquarius (AQPJ.J) (AQP.AX) said attributable output of PGMs for the three months to end-March fell 19 percent to 111,524 ounces compared with the previous quarter.

During the quarter, the firm sold its metals -- including platinum, palladium and rhodium -- at an average price of $1,981 per ounce, up 26 percent.

POWER PROBLEMS

Supply problems in South Africa, the world's largest producer of platinum, helped boost platinum prices XPT= to record highs.

Platinum has surged about 50 percent over the past 12 months, touching a record of $2,290 per ounce on March 4.

Power outages in South Africa have intensified this year as the state utility Eskom has struggled to keep up with rising demand amid an economic boom.

The power problems hit third-quarter output, which was also affected by labour issues, Aquarius said. A transition as the company took over running operations at its Everest mine from a contractor also contributed to the decline in output.

Listed in London, Johannesburg and Sydney, Aquarius said third-quarter output was around 15,000 ounces of PGMs below targets.

"It is anticipated that the fourth quarter should see an improvement in production at all operations," the company said.

"Based on the levels achieved to date, full-year production is envisaged to be in the range of 520,000 to 530,000 PGM ounces, comparable to the last financial year's production."

Last week, Aquarius said it planned to pay around $744 million to buy back a stake owned by South Africa's Impala Platinum (IMPJ.J), the world's second-biggest platinum group. (Reporting by Eric Onstad; Editing by Erica Billingham and David Hulmes)