29th Jan 2009 07:00
Lonmin Q1 2009 Production Report and Interim Management Statement
Lonmin Plc ("Lonmin" or the "Company") today announces its production report and Interim Management Statement for the quarter to 31 December 2008 (unaudited).
Our core underground mining operations at Marikana produced 2.7 million tonnes during the first quarter of 2009, 8% ahead of the same period in 2008, an encouraging indicator. As a result of management action, absenteeism levels during the Christmas break was much improved on the prior year. Our safety performance remains excellent, with a 20% improvement in LTIFR compared to the 2008 financial year. The re-calibration of Saffy shaft towards hybrid mining is progressing in line with our initial plans. Our continuing focus on increasing underground development at Marikana is beginning to show signs of improvement, with current monthly haulage and reef development metres running ahead of monthly averages over the past two years.
Total tonnes mined however were flat on the same period in 2008 at 3.1 million. This was as a consequence of the previously announced winding down of our opencast operations at Marikana, which were closed as planned on 31 December 2008. In addition, production from our Limpopo Baobab shaft was impacted by a 21 day strike and by disruption caused by the ongoing consultations relating to our restructuring plans for this shaft.
The concentrators produced a total of 173,232 saleable ounces of Platinum in concentrate for the quarter, a 9% decrease from the first quarter of 2008. This decline was mainly a result of our tonnes mined broadly matching our tonnes milled during the period, compared to the first quarter of 2008, when tonnes milled materially exceeded tonnes mined. As a result, tonnes milled were down 10.6% on the same quarter last year. This arose from the milling of low grade opencast stockpiles in the first quarter of 2008, but also as a result of undertaking maintenance on some of our Marikana concentrators in the first quarter of 2009, whilst the Number One furnace at our Smelter was down.
Overall head grade was up 2% at 4.48 g/t. However, underground head grade fell 6% to 4.46 g/t due to a number of factors, specifically an increased percentage of development ore coming from Hossy and Saffy and unplanned dilution on the UG2 reef horizon, as well as a lack of flexibility in face availability on the Merensky reef horizon. Management actions will address the latter two issues over the coming months.
Refined production for the first quarter of 2009 was 132,935 ounces of Platinum and 243,818 ounces of total PGMs, a decrease of 14% and 12% respectively from the first quarter of 2008. This was primarily the result of an anticipated build up in metals in process ahead of the Smelter during the planned rebuild of the Number One furnace and the lower level of metals in concentrate produced, referred to above. The re-design programme was successfully completed, with the furnace tapping matte again on 13 January 2009. The Merensky furnace has now been taken out of service and will be on care and maintenance. Both the Precious Metal and Base Metal Refineries performed well during the quarter.
As we reported at our Final Results on 18 November 2008, we initiated restructuring programmes during the quarter at our Marikana and Limpopo operations, and we remain in consultation with our representative unions. An update on these programmes will be given at our Interim Results on 11 May 2009.
The PGM pricing environment during the first quarter of the 2009 financial year remained challenging and the short term outlook for PGM pricing continues to be difficult to predict. However, we remain committed to our sales and cost guidance for the 2009 financial year, which we gave at our Final Results on 18 November 2008.
Enquiries:
Investors / Analysts:
Rob Gurner Tel: +44 (0) 207 201 6050
Head of Investor Relations
Media:
Anthony Cardew / Rupert Pittman Tel: +44 (0) 207 930 0777
Cardew Group
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3 months to 31st December |
3 months to 31st December |
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2008 |
2007 |
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Tonnes mined |
Marikana |
Underground - conventional |
000 |
2,304 |
2,174 |
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Underground - M&A1 |
000 |
370 |
300 |
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Underground - total |
000 |
2,674 |
2,474 |
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Opencast |
000 |
216 |
369 |
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Total |
000 |
2,890 |
2,844 |
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Limpopo |
Underground |
000 |
87 |
138 |
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Opencast |
000 |
0 |
0 |
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Total |
000 |
87 |
138 |
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Pandora attributable2 |
Underground |
000 |
34 |
34 |
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Opencast |
000 |
68 |
47 |
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Total |
000 |
103 |
81 |
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Lonmin Platinum |
Underground |
000 |
2,796 |
2,647 |
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Opencast |
000 |
285 |
416 |
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Total |
000 |
3,080 |
3,063 |
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Tonnes milled3 |
Marikana |
Underground |
000 |
2,662 |
2,509 |
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Opencast |
000 |
116 |
563 |
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Total |
000 |
2,778 |
3,072 |
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Limpopo |
Underground |
000 |
92 |
129 |
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Opencast |
000 |
0 |
0 |
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Total |
000 |
92 |
129 |
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Pandora4 |
Underground |
000 |
80 |
80 |
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Opencast |
000 |
124 |
128 |
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Total |
000 |
205 |
209 |
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Ore purchases5 |
Underground |
000 |
0 |
0 |
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Opencast |
000 |
0 |
30 |
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Total |
000 |
0 |
30 |
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Lonmin Platinum |
Underground |
000 |
2,835 |
2,719 |
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Head grade6 |
g/t |
4.46 |
4.76 |
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Recovery rate7 |
% |
80.2% |
81.5% |
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Opencast |
000 |
240 |
721 |
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Head grade6 |
g/t |
4.74 |
3.05 |
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Recovery rate7 |
% |
69.9% |
57.5% |
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Total |
000 |
3,075 |
3,440 |
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Head grade6 |
g/t |
4.48 |
4.40 |
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Recovery rate7 |
% |
79.4% |
78.0% |
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3 months to 31st December |
3 months to 31st December |
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2008 |
2007 |
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Metals in concentrate8 |
Marikana |
Platinum |
oz |
157,450 |
172,129 |
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Palladium |
oz |
72,825 |
78,660 |
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Gold |
oz |
3,613 |
4,672 |
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Rhodium |
oz |
21,809 |
23,236 |
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Ruthenium |
oz |
33,836 |
35,851 |
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Iridium |
oz |
7,410 |
7,372 |
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Total PGMs |
oz |
296,944 |
321,920 |
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Nickel9 |
MT |
679 |
809 |
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Copper9 |
MT |
421 |
493 |
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Limpopo |
Platinum |
oz |
3,770 |
5,528 |
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Palladium |
oz |
3,331 |
3,874 |
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Gold |
oz |
243 |
407 |
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Rhodium |
oz |
487 |
537 |
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Ruthenium |
oz |
688 |
804 |
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Iridium |
oz |
159 |
158 |
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Total PGMs |
oz |
8,679 |
11,308 |
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Nickel9 |
MT |
76 |
108 |
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Copper9 |
MT |
54 |
73 |
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Pandora4 |
Platinum |
oz |
12,013 |
11,126 |
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Palladium |
oz |
5,406 |
5,074 |
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Gold |
oz |
93 |
84 |
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Rhodium |
oz |
1,657 |
1,516 |
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Ruthenium |
oz |
2,427 |
2,263 |
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Iridium |
oz |
456 |
376 |
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Total PGMs |
oz |
22,051 |
20,438 |
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Nickel9 |
MT |
12 |
15 |
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Copper9 |
MT |
7 |
6 |
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Ore purchases5 |
Platinum |
oz |
0 |
832 |
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Palladium |
oz |
0 |
934 |
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Gold |
oz |
0 |
88 |
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Rhodium |
oz |
0 |
58 |
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Ruthenium |
oz |
0 |
50 |
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Iridium |
oz |
0 |
15 |
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Total PGMs |
oz |
0 |
1,976 |
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Nickel9 |
MT |
0 |
12 |
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Copper9 |
MT |
0 |
9 |
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Lonmin Platinum |
Platinum |
oz |
173,232 |
189,615 |
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Palladium |
oz |
81,563 |
88,542 |
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Gold |
oz |
3,949 |
5,250 |
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Rhodium |
oz |
23,953 |
25,347 |
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Ruthenium |
oz |
36,952 |
38,968 |
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Iridium |
oz |
8,025 |
7,921 |
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Total PGMs |
oz |
327,674 |
355,643 |
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Nickel9 |
MT |
767 |
943 |
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Copper9 |
MT |
481 |
581 |
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3 months to 31st December |
3 months to31st December |
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2008 |
2007 |
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Metallurgy |
Lonmin refined Metal Production |
Platinum |
oz |
132,935 |
154,526 |
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Palladium |
oz |
60,756 |
62,185 |
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Gold |
oz |
3,496 |
3,521 |
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Rhodium |
oz |
18,749 |
21,258 |
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Ruthenium |
oz |
25,338 |
31,531 |
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Iridium |
oz |
2,544 |
5,292 |
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Total PGMs |
oz |
243,818 |
278,312 |
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Toll refinedMetal production |
Platinum |
oz |
0 |
0 |
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Palladium |
oz |
0 |
0 |
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Gold |
oz |
0 |
0 |
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Rhodium |
oz |
0 |
0 |
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Ruthenium |
oz |
0 |
0 |
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Iridium |
oz |
0 |
0 |
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Total PGMs |
oz |
0 |
0 |
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Total refined PGMs |
Platinum |
oz |
132,935 |
154,526 |
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Palladium |
oz |
60,756 |
62,185 |
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Gold |
oz |
3,496 |
3,521 |
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Rhodium |
oz |
18,749 |
21,258 |
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Ruthenium |
oz |
25,338 |
31,531 |
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Iridium |
oz |
2,544 |
5,292 |
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Total PGMs |
oz |
243,818 |
278,312 |
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Base metals |
Nickel10 |
MT |
764 |
815 |
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Copper10 |
MT |
499 |
509 |
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Sales |
Refined Metal Sales |
Platinum |
oz |
126,202 |
143,855 |
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Palladium |
oz |
53,345 |
63,329 |
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Gold |
oz |
3,379 |
4,292 |
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Rhodium |
oz |
17,102 |
21,719 |
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Ruthenium |
oz |
25,668 |
32,567 |
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Iridium |
oz |
3,108 |
5,633 |
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Total PGMs |
oz |
228,805 |
271,394 |
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Concentrate and other11 |
Platinum |
oz |
0 |
1,756 |
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Palladium |
oz |
0 |
738 |
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Gold |
oz |
0 |
41 |
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Rhodium |
oz |
0 |
224 |
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Ruthenium |
oz |
0 |
362 |
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Iridium |
oz |
0 |
102 |
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Total PGMs |
oz |
0 |
3,224 |
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Lonmin Platinum |
Platinum |
oz |
126,202 |
145,611 |
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Palladium |
oz |
53,345 |
64,067 |
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Gold |
oz |
3,379 |
4,333 |
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Rhodium |
oz |
17,102 |
21,943 |
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Ruthenium |
oz |
25,668 |
32,929 |
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Iridium |
oz |
3,108 |
5,735 |
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Total PGMs |
oz |
228,805 |
274,619 |
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Nickel10 |
MT |
676 |
802 |
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Copper10 |
MT |
403 |
429 |
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3 months to 31st December |
3 months to 31st December |
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2008 |
2007 |
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Prices |
Average |
Platinum |
$/oz |
882 |
1,425 |
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Palladium |
$/oz |
187 |
356 |
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Gold |
$/oz |
819 |
790 |
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Rhodium |
$/oz |
2,347 |
6,374 |
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Ruthenium |
$/oz |
248 |
487 |
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Iridium |
$/oz |
421 |
421 |
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Basket price of PGMs12 |
$/oz |
751 |
1,427 |
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Nickel10 |
$/MT |
15,143 |
29,221 |
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Copper10 |
$/MT |
4,950 |
5,966 |
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Exchange Rates |
Average rate for period |
R/$ |
9.93 |
6.78 |
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Closing rate |
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R/$ |
9.45 |
6.85 |
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Notes: |
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1 |
M&A comprises ore produced by our fully mechanised shafts and from Saffy shaft, which is being transitioned to hybrid mining. |
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2 |
JV attributable tonnes mined includes Lonmin's share (42.5%) of the total tonnes mined on the Pandora joint venture. |
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3 |
Tonnes milled excludes slag milling. |
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4 |
Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in downstream operating statistics. |
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5 |
Relates to the tonnes milled and derived metal in concentrate from third-party ore purchases. |
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6 |
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). |
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7 |
Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag). |
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8 |
Metals in concentrate includes slag and have been calculated at industry standard downstream processing losses. |
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9 |
Corresponds to contained base metals in concentrate. |
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10 |
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. |
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11 |
Concentrate and other sales have been adjusted to a saleable ounces basis using standard industry recovery rates. |
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12 |
Basket price of PGMs is based on the revenue generated from the actual PGMs sold in the period. |
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Related Shares:
Lonmin