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LON - Lonmin Plc - Second Quarter 2010 Production Report

Release Date: 10/05/2010 08:00
Code(s): LON
Wrap Text

LON - Lonmin Plc - Second Quarter 2010 Production Report 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") 10 May 2010 Lonmin Plc Second Quarter 2010 Production Report Lonmin Plc, (Lonmin or the Company), the world`s third largest PGM producer, today announces its production results for the three months to 31 March 2010 (unaudited). Our core underground Marikana mining operations produced 2.6 million tonnes during the second quarter of the 2010 financial year, essentially in line with the same period last year, whilst tonnes milled from these operations were also flat with the prior year period at 2.5 million tonnes. Conventional operations at the property produced 2.1 million tonnes during the period, a decline of 0.1 million tonnes from the prior year period, mainly due to the planned closure of two decline shafts in 2009. Production from K3 shaft during the period was in line with the second quarter of 2009, however, the shaft suffered from significant Section 54 safety stoppages during the period. The impact of Section 54 safety stoppages across the Marikana property during the quarter was around 65,000 lost tonnes, which is better than the impact in the prior year period of 122,000 lost tonnes. Production at Saffy and Hossy shafts continued to ramp up during the second quarter of 2010, increasing by 41% over the prior year period. As highlighted in November 2009, we re-commenced production at a Merensky opencast pit at Marikana at the end of the period. Pandora underground production increased by 6% during the second quarter of 2010 from the prior year period. Due to the planned closures of opencast operations at our Marikana property and the Pandora joint venture in 2009, total tonnes mined from our operations for the second quarter of the 2010 financial year declined 2% year-on-year to 2.6 million. Total tonnes milled were down more, at 8%, to 2.5 million tonnes, as a result of opencast stock piles being milled in the prior year period. Platinum in concentrate from our Marikana operations was 154,578 saleable ounces during the second quarter of 2010, increasing by 2% from the prior year period. This was due to achieving better levels of grade and concentrator recoveries during the quarter compared to the prior year period. In total the concentrators produced 160,019 saleable ounces of Platinum in concentrate for the quarter, a 3% decrease from the second quarter of the prior year, due to the impact of closing the Pandora opencast operations in 2009. Underground milled head grade was up to 4.74 grammes per tonne (5PGE+Au), from 4.69 grammes per tonne (5PGE+Au), having been sustained from the first quarter of 2010. This was a result of a number of factors including cleaner mining across the property, a better ratio of stoping to development material at Hossy and Saffy as well as a better ore mix. Underground concentrator recoveries improved slightly to 84.7% from 84.5% in the first quarter of the 2010 financial year but were up significantly from the 81.4% achieved in the second quarter of 2009. This was as a result of the factors impacting head grade and due to continued benefits from our concentrator optimisation programme, excellent plant availability and a rigorous focus on batch milling the right ore through the right concentrators. Refined production for the second quarter of 2010 declined by 2% to 181,135 ounces of Platinum and 344,036 ounces of total PGMs. Metal sales during the second quarter of the 2010 financial year declined by 1% to 182,878 ounces of Platinum and 353,844 ounces of PGMs. Lonmin Plc also publishes today, in a separate announcement, its Interim Results for the half year ending 31 March 2010. ENQUIRIES: Investors / Analysts: Tanya Chikanza +44 (0) 207 201 6000 Acting Head of Investor Relations Media: Cardew Group +44 (0) 207 930 0777 Rupert Pittman / James Milton Financial Dynamics +27 (0) 21 487 9000 Dani Cohen / Ravin Maharaj 3 months 3 months
to to 31 Mar 31 Mar 2010 2009 Actual Actual
Tonnes Marikana Underground - 000 2,572 2,584 mined total Underground - 000 2,128 2,269 conventional
Underground - 000 444 315 Hossy & Saffy1 Opencast 000 7 13
Total 000 2,579 2,598 Pandora Underground 000 39 37 attributabl Opencast 000 - 41 e2
Total 000 39 78 Lonmin Underground 000 2,611 2,621 Platinum Opencast 000 7 55
Total 000 2,618 2,676 Tonnes Marikana Underground 000 2,453 2,462 milled3 Opencast 000 - 78 Total 000 2,453 2,540 Pandora4 Underground 000 78 88 Opencast 000 - 126
Total 000 78 214 Lonmin Underground 000 2,531 2,550 Platinum Head grade5 g/t 4.74 4.69
Recovery rate6 % 84.7% 81.4% Opencast 000 - 205 Head grade5 g/t 0.00 4.61 Recovery rate6 % 0.0% 71.3%
Total 000 2,531 2,754 Head grade5 g/t 4.74 4.68 Recovery rate6 % 84.7% 80.6% 3 months 3 months
to to 31 Mar 31 Mar 2010 2009 Actual Actual
Metals in Marikana Platinum oz 154,578 151,168 concentrate 7 Palladium oz 72,579 70,285
Gold oz 3,129 3,444 Rhodium oz 22,124 21,191 Ruthenium oz 33,543 32,617 Iridium oz 7,353 7,110
Total PGMs oz 293,306 285,815 Nickel8 MT 615 642 Copper8 MT 377 405 Pandora3 Platinum oz 5,441 13,742
Palladium oz 2,531 6,194 Gold oz 37 110 Rhodium oz 871 1,909 Ruthenium oz 1,289 2,789
Iridium oz 224 515 Total PGMs oz 10,394 25,259 Nickel8 MT 8 13 Copper8 MT 5 8
Lonmin Platinum oz 160,019 164,909 Platinum Palladium oz 75,110 76,479 Gold oz 3,166 3,554
Rhodium oz 22,995 23,100 Ruthenium oz 34,832 35,406 Iridium oz 7,577 7,625 Total PGMs oz 303,700 311,074
Nickel8 MT 623 655 Copper8 MT 381 412 3 months 3 months to to
31 Mar 31 Mar 2010 2009 Actual Actual Metallurgy Lonmin Platinum oz 180,956 184,969 refined Metal Production1 2
Palladium oz 79,325 86,637 Gold oz 4,028 5,151 Rhodium oz 21,381 25,939 Ruthenium oz 47,117 47,614
Iridium oz 10,502 9,935 Total PGMs oz 343,310 360,245 Toll Platinum oz 179 315 refined
metal production Palladium oz 63 - Gold oz - -
Rhodium oz 485 573 Ruthenium oz - 1,009 Iridium oz - 184 Total PGMs oz 727 2,081
Total Platinum oz 181,135 185,284 refined PGMs Palladium oz 79,388 86,637
Gold oz 4,028 5,151 Rhodium oz 21,866 26,512 Ruthenium oz 47,117 48,623 Iridium oz 10,502 10,119
Total PGMs oz 344,036 362,326 Base metals Nickel9 MT 883 869 Copper9 MT 526 579
Sales Refined Platinum oz 182,878 187,250 Metal Sales Palladium oz 81,783 92,439 Gold oz 5,393 5,940
Rhodium oz 22,039 21,636 Ruthenium oz 50,360 41,833 Iridium oz 11,390 9,392 Total PGMs oz 353,844 358,490
Concentrate Platinum oz - (1,600) and other10 Palladium oz - (1,822) Gold oz - -
Rhodium oz - - Ruthenium oz - - Iridium oz - - Total PGMs oz - (3,421)
Lonmin Platinum oz 182,878 185,651 Platinum Palladium oz 81,783 90,617 Gold oz 5,393 5,940
Rhodium oz 22,039 21,636 Ruthenium oz 50,360 41,833 Iridium oz 11,390 9,392 Total PGMs oz 353,844 355,069
Nickel9 MT 814 693 Copper9 MT 523 503 3 months 3 months to to
31 Mar 31 Mar 2010 2009 Actual Actual Average Platinum $/o 1,535 991 prices z Palladium $/o 432 195 z Gold $/o 1,110 901
z Rhodium $/o 2,467 1,099 z Ruthenium $/o 173 47
z Iridium $/o 447 384 z Basket price of PGMs11 $/o 1,103 666
z Basket price of PGMs11 R/o 8,432 6,631 z Nickel9 $/M 15,309 16,285
T Copper9 $/M 6,404 6,953 T
ExchangeRat Average rate for period13 R/$ es 7.49 9.90 Closing R/$ rate 7.28 9.49
Footnotes: 1 Hossy and Saffy are replacement/growth shafts in ramp up. Hossy is fully mechanised whilst Saffy has conventional stoping but mechanised development. In previous production reports this section showed all M&A/Hybrid mining. All comparatives have been restated. 2 Pandora 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 Head grade is the grammes per tonne (5PGE + Au) value contained in the tonnes milled and fed into the concentrator from the mines (excludes slag milled). 6 Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag). 7 Metals in concentrate include metal derived from slag processing and have been calculated at industry standard downstream processing losses to present produced saleable ounces. 8 Corresponds to contained base metals in concentrate. 9 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. 10 Concentrate and others sales essentially relates to BMR concentrate and BMR/PMR residues. 11 Basket price of PGMs is based on the revenue generated from the actual PGMs (5PGE + Au) sold in the period. 12 Lonmin refined metal production and sales include an estimated 3,000 oz saleable ounces of Platinum produced from toll refining third party concentrate (Q2 2009 - nil). 13 Exchange rates are calculated using the market average daily closing rate over the course of the period. Date: 10/05/2010 08:00:47 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.

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