12th Jan 2015 08:56
LONDON (Alliance News) - Sierra Rutile Ltd Monday said its production fell in 2014 due to the operational challenges it is facing due to the Ebola crisis, although it enjoyed a strong fourth quarter and is expecting the Ebola-related challenges to reduce this year.
The company also forecast lower operating cash costs in 2015 and a recovery in production.
In a statement, the mineral sands producer said it produced 114,163 tonnes of rutile in 2014, below its guidance of 120,000 tonnes, due to issues related to the Ebola outbreak. The company, which operates in Sierra Leone, hasn't suffered any cases, but has been affected by the measures put in place to combat the deadly disease, including some supply chain disruptions and higher costs for some locally-sourced products and services.
However, its sales have been unaffected, and the company said it achieved a record rutile sales volume in 2014. Demand for 2015 product remains robust, although remains sensitive to price, it said.
"Looking forward into 2015, we continue to expect that Ebola-related challenges will reduce, allowing us to drive and expand our assets further. Our management and staff have made huge efforts to minimise the effect of Ebola on our operations and to keep our employees safe and Ebola-free, and I would like to express my appreciation for their efforts in achieving the Q4 performance in these difficult circumstances," Chief Executive John Sisay said.
The company said it produced 31,025 tonnes of rutile in the fourth quarter and 10,574 tonnes of ilmenite, marking its third-highest quarter ever of rutile production and a 14.5% increase on output in the third quarter.
It is forecasting rutile production of between 120,000 and 130,000 tonnes in 2015 and ilmenite production of 30,000 to 35,000 tonnes.
The company said it was pleased to have kept control of costs in 2014, despite the Ebola-related inflation for some products and services. It said its total operating cash cost was USD646 a tonne, down 5% from 2013, while its all-in operating cash cost, which includes stay-in-business capital cost, fell 10% to USD683 a tonne.
It is forecasting a direct operating cash cost of USD520 to USD530 a tonne for 2015, a total operating cash cost of USD595 60 USD615 a tonne and an all-in operating cash cost of USD650 to USD670 a tonne.
Sierra Rutile shares were up 4.0% at 26.00 pence early Monday.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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