24th Jan 2008 07:01
Lonmin PLC24 January 2008 Q1 Production Report and Interim Management Statement Lonmin today announces its production report and interim management statementfor the quarter to 31 December 2007 (unaudited). Total tonnes mined for the quarter were 3.1 million a decline of 11% on the 3.4million tonnes mined in the first quarter of the prior year. Our Marikana operations mined a total of 2.8 million tonnes in the quarter, down9% on the prior year with underground operations contributing 2.5 milliontonnes. Underground tonnage was impacted by seven lost shifts at our K3 andRowland shafts due to a shutdown in October related to a fatal accident. Theentire Marikana operation was also impacted by the national one day safetystrike on 4 December 2007 and higher than expected absenteeism rates among keyskill groups in the week before Christmas. The combined impact of these eventswas lost production of around 330,000 tonnes or 20,000 saleable ounces ofPlatinum and a depletion of our ore stockpiles. Our mechanised operations at Marikana performed well during the quarter as wecontinued to increase production from Hossy and Saffy shafts. Mechanisedproduction was 300,000 tonnes mined, more than three times the total for thefirst quarter of the 2007 financial year. This equates to around 12% of ourMarikana underground tonnes and is 39% higher than in the fourth quarter of the2007 financial year. As planned, production from our shallow conventional shaftsat Marikana decreased during the quarter, down some 210,000 tonnes on theequivalent prior year period. During the quarter we processed 721,000 tonnes of opencast ore from bothMarikana and Pandora including 305,000 tonnes of stockpiled ore. We shut downtwo low grade Merensky opencast pits during the quarter and continue to reviewthe viability of our opencast operations on a campaign by campaign basis. Limpopo produced 138,000 tonnes mined in the quarter down 31% year on year, asproduction continued to be constrained by a lack of flexibility in the mine dueto the ore reserve disruption caused by the IRUP occurrence as well asindustrial relations disruptions to the shift cycle which have since beenresolved. Attributable underground tonnes mined at Pandora increased by 12% to34,000 tonnes. Underground milled head grade was 4% lower than the prior year, at 4.76 grammesper tonne (5PGE+Au) as a result of the increased percentage of lower gradedevelopment ore from the Marikana mechanised shafts and other ore mix issues.Opencast milled head grade was 3.05 grammes per tonne, down 32% on the prioryear as we milled a combination of low grade stockpiles and more oxidisedshallow material. The concentrators produced a total of 189,615 saleable ounces of Platinum inconcentrate, down 17% on the first quarter of the 2007 financial year reflectingthe reduced throughput from the mines. The recently initiated improvement plansat the plants have started to show early signs of success with undergroundrecoveries up from 80.5% in the fourth quarter of 2007 to 81.5% whilst opencastrecoveries rose from 55.9% to 57.5%. Total refined production for the quarter was 154,526 ounces of Platinum, adecline of 19% on the prior year. This again reflected the lower level ofthroughput from the mines and a build up of metal in process at the refineriesprimarily as a result of a trial we are currently undertaking for the externalprocessing of certain residues to improve our second pass recoveries. This metalin process will be released later in the year. Final metal sales for the quarter were 145,611 ounces of Platinum and 274,618ounces of total PGMs, slightly ahead of the first quarter of the 2007 financialyear. Overall mine production for the quarter was some 20,000 saleable ounces ofPlatinum lower than planned and we ended the quarter with minimal stockpilesahead of the concentrators. In early January, we continued to experience highlevels of absenteeism among key skill groups and this slow return to workcoupled with a lack of stocks caused us to lose concentrator production at thebeginning of the month. Given the production shortfall in the first quarter, thelost production in January and our revised estimate of the impact of the Easterbreak in March, our full year sales target is now around 860,000 ounces ofPlatinum. This target is based on our expectation of a strong operational performance inthe second half, driven by the continued effective ramp up of our mechanisedshafts, the implementation of the optimisation plans being put in place by ournew mining team and the continuation of recent improvements in our concentratorrecoveries. However, any further safety stoppages or any significant escalationof current power supply interruptions are risks to this target. During the quarter there have been no material events or transactions affectingLonmin, and there has been no significant change in the financial position orperformance of the group since 30 September 2007, other than as described inthis production report. Enquiries: Alex Shorland-Ball Tel: +44 (0) 207 201 6060 Vice President, Investor Relations & Communications __________________________________________________________________________________ 3 months to 3 months to 31 December 31 December 2007 2006__________________________________________________________________________________ Tonnes mined Marikana Underground - 000 2,175 2,658 Conventional Underground - M&A1 000 300 96 Underground - total 000 2,475 2,754 Opencast 000 369 384 Total 000 2,844 3,138 _________________________________________________________________ Limpopo Underground 000 138 199 Opencast 000 0 0 Total 000 138 199 _________________________________________________________________ Pandora Underground 000 34 30 attributable2 Opencast 000 47 74 Total 000 81 104 _________________________________________________________________ Lonmin Underground 000 2,647 2,983 Platinum Opencast 000 416 458 Total 000 3,063 3,441__________________________________________________________________________________ __________________________________________________________________________________ Tonnes milled3 Marikana Underground 000 2,509 2,790 Opencast 000 563 438 Total 000 3,072 3,228 _________________________________________________________________ Limpopo Underground 000 129 204 Opencast 000 0 0 Total 000 129 204 _________________________________________________________________ Pandora4 Underground 000 81 72 Opencast 000 128 187 Total 000 209 259 Ore 000 0 20 purchases5 Underground Opencast 000 30 0 Total 000 30 20 _________________________________________________________________ Lonmin Underground 000 2,719 3,086 Platinum Head grade6 g/t 4.76 4.96 Recovery rate7 % 81.5% 81.8% Opencast 000 721 625 Head grade6 g/t 3.05 4.49 Recovery rate7 % 57.5% 54.3% Total 000 3,440 3,711 Head grade6 g/t 4.40 4.88 Recovery rate7 % 78.0% 77.5%__________________________________________________________________________________ ________________________________________________________________________________ 3 months to 3 months to 31 December 31 December Restated8 2007 2006________________________________________________________________________________ Metals in Marikana Platinum oz 172,129 204,641concentrate9 Palladium oz 78,660 95,177 Gold oz 4,672 5,648 Rhodium oz 23,236 26,512 Ruthenium oz 35,851 43,751 Iridium oz 7,372 9,183 Total PGMs oz 321,920 384,912 Nickel10 MT 808 993 Copper10 MT 493 601 _______________________________________________________________ Limpopo Platinum oz 5,528 10,346 Palladium oz 3,874 7,202 Gold oz 407 802 Rhodium oz 537 1,060 Ruthenium oz 804 1,720 Iridium oz 158 419 Total PGMs oz 11,308 21,549 Nickel10 MT 108 215 Copper10 MT 73 142 _______________________________________________________________ Pandora4 Platinum oz 11,126 13,461 Palladium oz 5,074 6,229 Gold oz 83 120 Rhodium oz 1,516 1,878 Ruthenium oz 2,263 2,816 Iridium oz 376 618 Total PGMs oz 20,438 25,122 Nickel10 MT 15 16 Copper10 MT 6 10 _______________________________________________________________ Ore Platinum oz 832 1,011 purchases5 Palladium oz 934 466 Gold oz 88 14 Rhodium oz 58 157 Ruthenium oz 50 253 Iridium oz 15 52 Total PGMs oz 1,977 1,953 Nickel10 MT 12 5 Copper10 MT 9 3 _______________________________________________________________ Lonmin Platinum oz 189,615 229,459 Platinum Palladium oz 88,542 109,074 Gold oz 5,250 6,584 Rhodium oz 25,347 29,607 Ruthenium oz 38,968 48,540 Iridium oz 7,921 10,272 Total PGMs oz 355,643 433,536 Nickel10 MT 942 1,229 Copper10 MT 582 756________________________________________________________________________________ ________________________________________________________________________________ 3 months to 3 months to 31 December 31 December 2007 2006________________________________________________________________________________ Metallurgy Lonmin Platinum oz 154,526 186,981 refined Palladium oz 62,184 81,064 Metal Gold oz 3,521 5,535 Production Rhodium oz 21,258 21,634 Ruthenium oz 31,531 34,967 Iridium oz 5,292 6,635 Total PGMs oz 278,312 336,816 _______________________________________________________________ Toll refined Platinum oz 0 3,823 metal Palladium oz 0 1,764 production Gold oz 0 0 Rhodium oz 0 588 Ruthenium oz 0 899 Iridium oz 0 178 Total PGMs oz 0 7,252 _______________________________________________________________ Total Platinum oz 154,526 190,804 refined Palladium oz 62,184 82,828 PGMs Gold oz 3,521 5,535 Rhodium oz 21,258 22,222 Ruthenium oz 31,531 35,866 Iridium oz 5,292 6,813 Total PGMs oz 278,312 344,068 _______________________________________________________________ Base metals Nickel11 MT 815 989 Copper11 MT 509 611 ________________________________________________________________________________ Sales Refined Platinum oz 143,855 140,904 Metal Palladium oz 63,328 58,351 Sales Gold oz 4,292 5,515 Rhodium oz 21,719 17,740 Ruthenium oz 32,567 34,155 Iridium oz 5,633 9,102 Total PGMs oz 271,394 265,767 _______________________________________________________________ Concentrate Platinum oz 1,756 1,191 and other12 Palladium oz 739 473 Gold oz 41 119 Rhodium oz 224 44 Ruthenium oz 362 85 Iridium oz 102 20 Total PGMs oz 3,224 1,932 _______________________________________________________________ Lonmin Platinum oz 145,611 142,095 Platinum Palladium oz 64,067 58,824 Gold oz 4,333 5,634 Rhodium oz 21,943 17,784 Ruthenium oz 32,929 34,240 Iridium oz 5,735 9,122 Total PGMs oz 274,618 267,699 Nickel11 MT 803 1,066 Copper11 MT 429 452________________________________________________________________________________ __________________________________________________________________________________ 3 months to 3 months to 31 December 31 December 2007 2006__________________________________________________________________________________ Prices Average Platinum $/oz 1,425 1,071 Palladium $/oz 356 311 Gold $/oz 790 585 Rhodium $/oz 6,374 4,917 Ruthenium $/oz 487 189 Iridium $/oz 421 377 Basket price of $/oz 1,427 1,013 PGMs13 Nickel11 $/MT 29,222 25,352 Copper11 $/MT 5,966 6,622__________________________________________________________________________________ __________________________________________________________________________________ Exchange Average rate for period R/$ 6.78 7.53Rates Closing rate R/$ 6.85 6.97__________________________________________________________________________________ Notes: 1 M&A comprises ore produced by our ultra low profile mechanised equipment. 2 Pandora attributable tonnes mined includes Lonmin's share (42.5%) of the total tonnes mined on the Pandora joint venture. 3 Tonnes milled excludes slag milling. 4 Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in downstream operating statistics. 5 Relates to the tonnes milled and derived metal in concentrate from third-party ore purchases. 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). 7 Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag) 8 The metals in concentrate numbers for the prior year have been restated to adjust for a measurement error, discovered during the fourth quarter in the prior year. This has the impact of reducing the first quarter metals in concentrate produced by 1,259 ounces of Platinum and 2,549 ounces of total PGMs. 9 Metals in concentrate include slag and have been calculated at industry standard downstream processing losses. 10 Corresponds to contained base metals in concentrate. 11 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. 12 Concentrate and other sales have been adjusted to a saleable ounces basis using standard industry recovery rates. 13 Basket price of PGMs is based on the revenue generated from the actual PGMs sold in the period. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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