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LON - Lonmin - Third Quarter Production Report and Trading Update

Release Date: 16/07/2007 08:09
Code(s): LON
Wrap Text

LON - Lonmin - Third Quarter Production Report and Trading Update Lonmin Plc (Incorporated in England and Wales) (Registered in the Republic of South Africa under registration number 1969/000015/10) JSE code: LON Issuer Code: LOLMI & ISIN: GB0031192486 ("Lonmin") 16 July 2007 Third Quarter Production Report and Trading Update Lonmin today announces its production report for the nine months to 30 June 2007 (unaudited). Our Marikana smelting operations returned to normal during the third quarter with the Number One furnace operating at full capacity during the last two months of the quarter. Marikana mined 9.6 million tonnes during the nine months, a small increase on the prior year period after stripping out the effect of the additional seven days in the prior year. The Number One furnace was restarted on 30 April 2007 and we have run this furnace side by side with the Merensky furnace allowing us to process around 63,000 tonnes of concentrate in the third quarter reducing by around two thirds our concentrate inventory stockpile. Total sales for the nine months were 477,639 ounces of Platinum and 897,661 ounces of total PGMs. We are forecasting that our full year production will be between 920,000 and 940,000 saleable ounces of Platinum in concentrate. We are continuing to experience poorer recoveries at our concentrators principally due to the ongoing change in the mix of ore types. This has principally been caused by an earlier than anticipated shift in the mix of underground ores with a larger proportion of ore feed now coming from the Eastern side of our Marikana property. These ores are proving to be more difficult to mill than planned. We have instigated a detailed plan to maximise recoveries but this ore mix effect is expected to continue to have an impact during the last quarter of this year and throughout 2008 until our new K4 shaft comes into production in the 2009 financial year. Our operations have also been impacted by the continued shortage of, and difficulty in retaining, high quality skilled labour in South Africa. While the Process Division has run extremely well since the restart of the Number One furnace in April, we now believe we will be unable to process the entire inventory build up through our Base Metal and Precious Metal Refineries before the end of our financial year. In order to retain the full margin on these ounces we have decided not to sell or toll refine this material but to defer the sales of some 70,000 to 90,000 Platinum ounces into the 2008 financial year. We estimate that the above issues will reduce our full year sales to between 820,000 to 840,000 ounces of Platinum and 1,520,000 to 1,550,000 ounces of total PGMs. We will however continue to meet all our contractual sales obligations. The reduction in production volumes will also impact our full year unit costs and we are revising our C1 cost guidance net of base metal credits to between R3,150 to R3,250 per PGM ounce sold for the Marikana operations and R3,450 to R3,550 per PGM ounce sold for Marikana and Limpopo combined. Enquiries: Alex Shorland-Ball +44 (0) 20 7201 6060 Vice President, Investor Relations & Communications Lonmin will be hosting an analyst conference call at 9.00 am UK time (10.00 am SA time) today. Those wishing to take part should dial in on the following numbers: Access number: +44 (0) 20 8609 0205, UK Freephone Number: 0800 358 2705, ZA Freephone Number: 0800 999 539 and Pin Code: 621126# Mining 9months to 9 months 30 June to 30 June 2007 2006 (1)
Tonnes mined Marikana Underground 000 8,460 8,497 Opencast 000 1,176 1,322 Total 000 9,636 9,818 Limpopo Underground 000 564 669
Opencast 000 0 14 Total 000 564 683 JV attribu- Underground 000 92 75 table (2)
Opencast 000 232 102 Total 000 324 178 Lonmin Underground 000 9,116 9,240 Platinum
Opencast 000 1,408 1,438 Total 000 10,524 10,678 Tonnes Marikana Underground 000 8,415 8,463 milled (3) Opencast 000 1,078 1,558 Total 000 9,492 10,021 Limpopo Underground 000 595 685
Opencast 000 0 14 Total 000 595 699 JV(4) Underground 000 216 177 Opencast 000 530 218
Total 000 747 395 Ore Underground 000 75 0 purchases (5)
Opencast 000 20 18 Total 000 95 18 Lonmin Underground 000 9,301 9,324 Platinum
Opencast 000 1,628 1,809 Total 000 10,930 11,133
9months to 9 months 30 June to 30 June 2007 2006 (1)
Metals in Marikana Platinum oz 596,908 664,875 concentrate (6) Palladium oz 271,967 296,840
Gold oz 16,562 18,201 Rhodium oz 78,723 86,440 Ruthenium oz 126,419 138,795 Iridium oz 26,344 28,293
Total PGMs oz 1,116,922 1,233,443 Nickel (7) MT 2,900 3,098 Copper (7) MT 1,719 1,849 Limpopo Platinum oz 27,372 38,594
Palladium oz 18,867 29,192 Gold oz 2,231 2,655 Rhodium oz 2,908 4,460 Ruthenium oz 4,569 6,702
Iridium oz 1,049 1,433 Total PGMs oz 56,996 83,037 Nickel (7) MT 596 642 Copper (7) MT 404 432
JV (4) Platinum oz 41,399 21,458 Palladium oz 19,219 9,753 Gold oz 368 197 Rhodium oz 5,817 3,134
Ruthenium oz 8,523 4,766 Iridium oz 1,893 1,007 Total PGMs oz 77,219 40,314 Nickel (7) MT 48 13
Copper (7) MT 26 11 Ore Platinum oz 3,693 520 purchases (5)
Palladium oz 1,709 147 Gold oz 46 26 Rhodium oz 526 19 Ruthenium oz 798 45
Iridium oz 177 9 Total PGMs oz 6,949 766 Nickel (7) MT 18 1 Copper (7) MT 9 0
Lonmin Platinum oz 669,372 725,447 Platinum Palladium oz 311,762 335,932 Gold oz 19,206 21,079
Rhodium oz 87,974 94,052 Ruthenium oz 140,308 150,308 Iridium oz 29,464 30,742 Total PGMs oz 1,258,087 1,357,561
Nickel (7) MT 3,562 3,755 Copper (7) MT 2,159 2,293 Metallurgy 9months 9 months to 30 to 30 June
June 2007 2006 (1) Metallurgy Lonmin Platinum oz 433,562 536,096 refined
Metal Production Palladium oz 193,983 244,894 Gold oz 13,275 13,357
Rhodium oz 52,991 80,359 Ruthenium oz 83,442 122,497 Iridium oz 19,533 25,781 Total PGMs oz 796,787 1,022,985
Toll refined Platinum oz 84,782 0 Metal production Palladium oz 35,657 0
Gold oz 0 0 Rhodium oz 11,485 0 Ruthenium oz 18,740 0 Iridium oz 3,700 0
Total PGMs oz 154,365 0 Total Platinum oz 518,343 536,096 Refined PGMs
Palladium oz 229,641 244,894 Gold oz 13,275 13,357 Rhodium oz 64,476 80,359 Ruthenium oz 102,183 122,497
Iridium oz 23,234 25,781 Total PGMs oz 951,152 1,022,985 Base metals Nickel (8) MT 3,106 3,091 Copper (8) MT 1,574 1,612
Lonmin Group Metal Sales Sales Refined Platinum oz 475,287 530,706 Metal
Sales Palladium oz 208,320 243,103 Gold oz 14,880 15,617 Rhodium oz 66,259 84,213
Ruthenium oz 103,176 131,642 Iridium oz 25,537 24,855 Total PGMs oz 893,460 1,030,136 Concentrate Platinum oz 2,352 46,481
and other (9) Palladium oz 1,109 20,511 Gold oz 125 1,777
Rhodium oz 203 5,275 Ruthenium oz 348 8,661 Iridium oz 64 1,701 Total PGMs oz 4,201 84,407
Lonmin Platinum oz 477,639 577,186 Platinum Palladium oz 209,429 263,614 Gold oz 15,005 17,395
Rhodium oz 66,462 89,489 Ruthenium oz 103,524 140,303 Iridium oz 25,601 26,556 Total PGMs oz 897,661 1,114,543
Nickel (8) MT 3,096 3,203 Copper (8) MT 1,400 1,905 9months 9 months to 30 to 30 June
June 2007 2006 (1) Prices Average Platinum $/oz 1,171 1,030 Palladium $/oz 340 290
Gold $/oz 624 549 Rhodium $/oz 5,631 3,638 Ruthenium $/oz 420 104 Iridium $/oz 402 225
Basket price $/oz 1,190 928 of PGMs Nickel (8) $/MT 27,706 11,974 Copper (8) $/MT 6,883 5,310
Exchange Average rate for period R/$ 7.20 6.42 Rates Closing rate R/$ 7.01 7.15
Notes: 1 The nine months to June 2006 comprised an additional 7 days mining performance for WPL and EPL arising on the change of basis to report on a calendar month. 2 JV attributable tonnes mined includes Lonmin`s share (42.5%) of the total tonnes mined on the Pandora joint venture. 3 Tonnes milled excludes slag milling. 4 Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in downstream operating statistics. 5 Relates to the tonnes milled and derived metal in concentrate from third- party ore purchases. 6 Metals in concentrate has been changed from the previously reported definition of full contained metal to adjust for industry standard downstream processing losses. 7 Corresponds to contained base metals in concentrate. 8 Nickel is produced and sold as nickel sulphate crystals or solution and the volumes shown correspond to contained metal. Copper is produced as refined product but typically at LME grade C. 9 Concentrate and other sales have been adjusted to a saleable ounces basis using standard industry recovery rates. Date: 16/07/2007 08:09:18 Supplied by www.sharenet.co.za Produced by the JSE SENS Department.

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