3rd Jul 2014 11:03
LONDON (Alliance News) - African Minerals Ltd Thursday said it is on target to achieve its full-year export guidance and that production from its phase 2 project development of the Tonkolili iron ore mine in Sierra Leone could start as early as next year.
The mining exploration and development company said its total export tonnage in the second quarter to June 30 fell slightly to 4.52 million tonnes from 4.55 million tonnes in the first quarter, putting the company on target to reach its full year guidance of 16 to 18 million tonnes.
The company said its export tonnage was slightly down in the second quarter as it faced a planned six day shutdown at its rail and port infrastructure for maintenance operations and upgrades.
African Minerals said that on June 22 the company loaded its first standard cargo in which it assumed the cost of the vessel with its own marine team. The company said that as a result, it saw a marked reduction in freight costs to USD18.80 per tonne from USD19.93 per tonne.
The company separately said that the next part of its phase two development of the Tonkolili mine, which should expand its direct shipping ore processing and infrastructure operations to a total capability of 25 million tonnes per year, is currently underway.
African Minerals said that commissioning of the first units in order to convert its wet process plant are expected to start within 12 months of project start with an estimated cost of conversion at USD311 million, a reduction of over USD1 billion from previous expectations.
The company said the concentrator will target production of 11 million tonnes a year of a 63% iron or more concentrate product, with an average mass yield of 56%.
The firm said that, based on current reference prices, gross revenues per tonne are expected to increase by USD30 per tonne with an expected increase in EBITDA margin of USD20 to USD25 per tonne.
"I am pleased to confirm that, after six months of intensive engineering, testwork, analysis and process design, our Phase 2 project could commence production as early as next year," Chief Executive Officer Bernie Pryor said in a statement.
African Minerals shares were up 7.5% to 78.44 pence on Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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