14th Nov 2007 07:02
International Ferro Metals Limited14 November 2007 International Ferro Metals Limited ("IFL" or the "Company") AGM / Operations Update London, 14 November 2007 - International Ferro Metals Limited (LSE: IFL), theintegrated ferrochrome producer, held its Annual General Meeting today in Sydney. At the meeting, Stephen Turner, Managing Director, made the followingcomments: IFL announces that its new ball mill gear box has been successfully installedand the replacement programme for its electrode pressure rings is two thirdscomplete. The devaluation of the US dollar along with increased freight and reductantcosts reduced average profit margins throughout the South African ferrochromeindustry in the year to date. Published ferrochrome prices are anticipated toremain close to the historic high, at US$1 /lb throughout the fourth quarter of2007. Electrode Pressure Rings Replacement of the pressure rings which hold the contact points against theelectrodes within each of the Company's two furnaces is progressing to schedule.IFL has 48 pressure rings of which 32 have been replaced to date. Allreplacements have been successful and all pressure rings are scheduled to havebeen replaced by the end of January 2008. Gear Box Faulty Wiring Following the identification of faulty wiring in the ball mill of thepelletising plant notified to the market in September 2007, a new gear box hasbeen successfully installed and associated rectification work completed.Accordingly, the full operating capacity of the pelletising plant has beenrestored. Production Forecast The estimated consequential loss of production from replacing the pressure ringsand remedying the failure of the ball mill gear box through both replacementtime and associated power ramp-ups remains at 30,000 tonnes through the periodto 31 January 2008. All other components of the integrated ferrochrome facility are operating atcapacity and IFL's management anticipates the plant will resume production atthe rate of 267,400 tpa of ferrochrome within a few months. On that basis, IFLexpects production for the year ending 30 June 2008 to total 237,000 tonnes. Sales To date, the Company's ferrochrome has been sold to consumers in China, Germany,Italy, Brazil, USA, Thailand, Japan and Belgium. All sales have been made withreference to the published ferrochrome price which, since 1st July 2007, hasbeen US$1 /lb. From this price, a confidential industry discount is negotiatedwith purchasers and a three per cent commission is payable to sales agents. Itis anticipated that the price will remain at this level throughout the fourthquarter of 2007, with the industry anticipating a price increase from 1stJanuary 2008. Ferrochrome prices are published on the basis of contained chrome and inclusiveof insurance and freights costs (CIF). Freight costs, in particular bulkshipping costs, have increased significantly this year. The depreciation of theUS dollar will also adversely affect the Company's profit margin. With US dollardenominated revenue and the production expenditure being Rand denominated, theSouth African ferrochrome industry is directly affected by the six per centdepreciation of the US dollar against the South African Rand since 1st July thisyear. Expansion The feasibility study to increase annual production capacity to 665,000 tonnesof ferrochrome is well underway. A preliminary Mineral Resource Statement forSkychrome shows resource tonnes above those previously estimated. Negotiations with banks to secure debt finance for the expansion are continuingsatisfactorily. Conference Call - Dial in Details Stephen Turner, Managing Director, will host a conference call today at 12:00 pm(GMT). To participate, please dial +44 (0) 1452 541 076 and quote InternationalFerro Metals. A recording of the conference call will be available for seven days. To listen,please dial +44 (0)145 255 0000 and enter the pass code 24641117#. This servicewill be active approximately one hour after the conference call has finished. For more information please visit the Company's website, www.ifml.com or contact: International Ferro Metals LimitedStephen Turner, Managing DirectorMob: +61 (0)418 440 844 Brunswick GroupCarole Cable / Alexandra TweedTel: +44 (0)20 7404 5959 Numis Securities LimitedJohn HarrisonTel: +44 (0)20 7260 1000 About International Ferro Metals: IFL is a ferrochrome producer that has recently commenced shipments from itsintegrated chromite mine and ferrochrome processing operations in South Africafor use in the global stainless steel industry. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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