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LON - Lonmin Plc - Second Quarter 2011 Production Report

Release Date: 09/05/2011 08:00
Code(s): LON
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LON - Lonmin Plc - Second Quarter 2011 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") 9 May 2011 Lonmin Plc Second Quarter 2011 Production Report Lonmin Plc, (Lonmin or the Company), the world`s third largest Platinum producer, today announces its production results for the three months to 31 March 2011 (unaudited) We continued to make solid progress in our operational performance. Both tonnes mined and milled in the second quarter of the 2011 financial year increased over the prior year period. We have experienced an uncharacteristically high level of fatalities since the beginning of the quarter. Three of these fatalities occurred within the quarter and two fatalities occurred in April 2011. Management is working, in consultation with organised labour and the Department of Minerals and Resources to address the situation. Mining Overall total tonnes mined at 2.9 million reflected an increase of 272,000, equivalent to 10.4% against the prior year period. Total tonnes mined in the second quarter of 2011 from our Marikana underground operations were 2.7 million, an increase of 131,000 tonnes or 5.1% from the prior year period. This increase was mainly as a result of increased production at the Karee and Easterns mining operations, which increased production by 83,000 and 60,000 tonnes respectively. Production at Middelkraal and Westerns was broadly flat impacted by the planned decline at Newman shaft and mechanical breakdowns and worse than expected ground conditions at Hossy and Saffy respectively. The overall tonnes lost from Section 54 stoppages was 48,000 tonnes compared to 65,000 in the prior year period. Production at our opencast operations in the quarter was impacted by comparatively higher rainfall and we produced 143,000 tonnes in the quarter, compared to 193,000 tonnes in the first quarter. There was no significant opencast mining in the prior year period as a result of the planned closures of opencast operations in 2009. Concentrators Total tonnes milled in the quarter increased over the prior year period by 16.6% or 421,000 tonnes to 2.95 million tonnes with opencast contributing 316,000 tonnes from current production and stockpiles. The underground tonnes increased by 105,000 tonnes, to 2.6 million tonnes, equating to a 4.1% increase against the prior year period. Underground milled head grade was down 0.17 grammes per tonne or 3.5% to 4.57 grammes per tonne (5PGE+Au) when compared to 4.74 grammes per tonne in the prior year period but showed an improvement from the quarter one grade of 4.55 grammes per tonne. The decline in the underground grade was partly due to the increased proportion of Merensky ore in the underground ore mix which increased from 19.5% of ore milled to 23.1% as well as challenging ground conditions at K3 shaft. The overall milled head grade is 4.31 grammes per tonne, a decline of 8.9% when compared to the prior year period primarily as a result of the lower open cast grade compared to a prior year period when no open cast tonnes were milled. The benefits from our concentrator optimisation programme and good management discipline continued as underground concentrator recoveries for the quarter improved by 1.6% to 86.0% against the prior year period whilst opencast recoveries were a notable 82.7%. Total Platinum in concentrate was 174,430 saleable ounces, an increase of 14,411 ounces or 9% when compared against the prior year period, with open cast operations contributing 9,218 ounces. Total refined production for the second quarter of 2011 was up by 24.3% to 225,152 Platinum ounces. This was due to the increase in metals in concentrate and release of metals in process following the smelter re-build disruption from quarter one. Sales and Pricing Metal sales during the quarter increased by 37.7% to 251,880 Platinum ounces and 40% to 495,240 PGM ounces. The significant increase was due to the increased production and release of the stock built up in the first quarter when deliveries were impacted by adverse weather conditions in the northern hemisphere. The US Dollar basket price was, at US$1,332, 20.8% higher than the prior year period and 13.3% higher than quarter one. The increase in our South African Rand basket was less marked at 10.8% due to the continued strengthening of the South African Rand against the US Dollar during the quarter when compared to the prior year period. Lonmin also publishes today, in a separate announcement, its Interim Results for the half year ending 31 March 2011. ENQUIRIES: Investors / Analysts: Tanya Chikanza +44 (0) 207 201 6000 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 31 Mar to 31 Mar 2011 - Act 2010 - Act
Tonnes Marikana Karee1 kt 1,107 1,025 mined Westerns1 kt 853 859 Middelkraal kt 437 444
1 Easterns1 kt 305 245 Underground kt 2,703 2,572 Opencast kt 143 7
Total kt 2,846 2,579 Pandora Underground kt 44 39 attributable 2 Lonmin Underground kt 2,746 2,611 Platinum Opencast kt 143 7 Total kt 2,890 2,618
% tonnes mined from the % 72.5% 76.6% UG2 reef Tonnes Marikana Underground kt 2,536 2,453 milled 3 Opencast kt 316 - Total kt 2,852 2,453
Pandora4 Underground kt 101 78 Lonmin Underground kt 2,636 2,531 Platinum Head grade5 g/t 4.57 4.74
Recovery % 86.0% 84.7% rate6 Opencast kt 316 0 Head grade5 g/t 2.16 0.00
Recovery % 82.7% 0.0% rate6 Total kt 2,952 2,531 Head grade5 g/t 4.31 4.74
Recovery % 85.9% 84.7% rate6 3 3 months months
to 31 to 31 Mar Mar 2011 - 2010 - Act Act
Metals in Marikana Platinum oz 168,020 154,578 concentrate 7 Palladium oz 78,660 72,579
Gold oz 4,674 3,129 Rhodium oz 21,630 22,124 Ruthenium oz 34,734 33,543 Iridium oz 7,566 7,353
Total PGMs oz 315,284 293,306 Nickel8 MT 921 615 Copper8 MT 576 377 Pandora4 Platinum oz 6,410 5,441
Palladium oz 3,001 2,531 Gold oz 45 37 Rhodium oz 975 871 Ruthenium oz 1,539 1,289
Iridium oz 255 224 Total PGMs oz 12,225 10,394 Nickel8 MT 10 8 Copper8 MT 6 5
Lonmin Platinum Platinum oz 174,430 160,019 Palladium oz 81,661 75,110 Gold oz 4,719 3,166 Rhodium oz 22,605 22,995
Ruthenium oz 36,273 34,832 Iridium oz 7,822 7,577 Total PGMs oz 327,509 303,700 Nickel8 MT 931 623
Copper8 MT 582 381 3 3 months months to 31 to 31
Mar Mar 2011 - 2010 - Act Act Refined Lonmin refined Platinum oz 198,998 180,956 production metal production Palladium oz 95,643 79,325 Gold oz 4,119 4,028
Rhodium oz 24,245 21,381 Ruthenium oz 51,530 47,117 Iridium oz 8,768 10,502 Total PGMs oz 383,302 343,310
Toll refined Platinum oz 26,154 179 metal production Palladium oz 13,090 63 Gold oz 839 -
Rhodium oz 3,713 485 Ruthenium oz 10,935 - Iridium oz 2,311 - Total PGMs oz 57,042 727
Total refined Platinum oz 225,152 181,135 PGMs Palladium oz 108,733 79,388 Gold oz 4,958 4,028
Rhodium oz 27,958 21,866 Ruthenium oz 62,465 47,117 Iridium oz 11,078 10,502 Total PGMs oz 440,344 344,036
Base metals Nickel9 MT 1,190 883 Copper9 MT 726 526 Sales Lonmin Platinum Platinum oz 251,880 182,878 Palladium oz 131,326 81,783 Gold oz 5,362 5,393 Rhodium oz 33,412 22,039 Ruthenium oz 61,610 50,360
Iridium oz 11,650 11,390 Total PGMs oz 495,240 353,844 Nickel9 MT 1,217 814 Copper9 MT 688 523
Chrome9 MT 128,638 155,492 3 3 months months to 31 to 31
Mar Mar 2011 - 2010 - Act Act Average Platinum $/oz 1,784 1,535 prices Palladium $/oz 788 432 Gold $/oz 1,153 1,110 Rhodium $/oz 2,390 2,467
Ruthenium $/oz 173 173 Iridium $/oz 885 447 $ basket price excl. by-product $/oz 1,332 1,103 revenue11
R basket price excl. by-product R/oz 9,341 8,432 revenue11 R basket price incl. by-product R/oz 9,852 8,614 revenue12
Nickel9 $/MT 23,336 15,309 Copper9 $/MT 9,137 6,404 Chrome9 $/MT 26 2
ExchangeRates Average rate for period13 R/$ 6.98 7.49 Closing rate R/$ 6.77 7.28 Notes: 1 During 2010 the management structure in mining was revised into four business units. Karee includes the shafts K3, 1B and 4B and will also include K4 once production commences. Westerns comprises Rowland, Newman and ore purchases from W1. Middelkraal represents Hossy and Saffy. Easterns includes E1, E2 and E3. 2 Pandora attributable tonnes mined includes Lonmin`s share (42.5%) of the total tonnes mined on the Pandora joint venture. 3 Tonnes milled exclude 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. Chrome is produced in the form of chromite concentrate and volumes shown are in the form of chromite. 10 Concentrate and other sales have been adjusted to a saleable ounce basis using industry standard recovery rates. 11 Basket price of PGMs is based on the revenue generated in Rand and Dollar from the actual PGMs (5PGE + Au) sold in the period based on the appropriate Rand / Dollar exchange rate applicable for each sales transaction. 12 As per note 11 but including revenue from base metals. 13 Exchange rates are calculated using the market average daily closing rate over the course of the period. Date: 09/05/2011 08:00:01 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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