9th Oct 2014 07:40
LONDON (Alliance News) - Sierra Rutile Ltd shares fell early Thursday after the company said its efforts to expand production in the third quarter had been hampered by the efforts to control the Ebola outbreak in West Africa and it is cutting its 2014 production guidance.
The mineral sands producer currently operates in Sierra Leone, one of the four countries worst hit by the Ebola outbreak.
"Notwithstanding the challenges of the ongoing Ebola outbreak, disruptions to operations remain minimal and largely indirect in nature as we continue to be free from any cases of Ebola at our operations," Chief Executive John Sisay said in a statement.
"While it was encouraging to see our operations remain strong and stable, our efforts to enhance production during the quarter have been hampered by actions imposed to limit the spread of the virus, causing us to reduce our production guidance for the year to 120,000 tonnes," he added.
Its 2014 guidance is now 120,000 tonnes of rutile at an all-in cash cost of USD655 a tonne. It had previously predicted that rutile production in the second half of the year would be more than the first-half output of 56,060 tonnes.
It said it does not expect any further interruptions to production, and it has adjusted its supply chain to mitigate the effects of Ebola. Its upgraded mineral separation plant is also undergoing commissioning. As a result, fourth-quarter production is expected to be significantly higher than in prior quarters of 2014, it said.
In a trading update, Sierra Rutile said it produced 27,078 tonnes of rutile in the third quarter of 2014, down 2% on its output in the second quarter, although ilmenite production rose 19% on the quarter to 9,986 tonnes.
It said its operating expenditure was in line with previous quarters as it sustained its efforts to improve cost efficiency.
Sierra Rutile shares were down 7.0% at 20.00 pence early Thursday.
By Steve McGrath; [email protected]; @stevemcgrath1
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