9th May 2011 07:00
Lonmin Plc
Second Quarter 2011 Production Report
Lonmin Plc, (Lonmin or the Company), the world's third largest Platinum producer, today announces its production results for the three months to 31 March 2011 (unaudited)
We continued to make solid progress in our operational performance. Both tonnes mined and milled in the second quarter of the 2011 financial year increased over the prior year period.
We have experienced an uncharacteristically high level of fatalities since the beginning of the quarter. Three of these fatalities occurred within the quarter and two fatalities occurred in April 2011. Management is working, in consultation with organised labour and the Department of Minerals and Resources to address the situation.
Mining
Overall total tonnes mined at 2.9 million reflected an increase of 272,000, equivalent to 10.4% against the prior year period.
Total tonnes mined in the second quarter of 2011 from our Marikana underground operations were 2.7 million, an increase of 131,000 tonnes or 5.1% from the prior year period. This increase was mainly as a result of increased production at the Karee and Easterns mining operations, which increased production by 83,000 and 60,000 tonnes respectively. Production at Middelkraal and Westerns was broadly flat impacted by the planned decline at Newman shaft and mechanical breakdowns and worse than expected ground conditions at Hossy and Saffy respectively. The overall tonnes lost from Section 54 stoppages was 48,000 tonnes compared to 65,000 in the prior year period.
Production at our opencast operations in the quarter was impacted by comparatively higher rainfall and we produced 143,000 tonnes in the quarter, compared to 193,000 tonnes in the first quarter. There was no significant opencast mining in the prior year period as a result of the planned closures of opencast operations in 2009.
Concentrators
Total tonnes milled in the quarter increased over the prior year period by 16.6% or 421,000 tonnes to 2.95 million tonnes with opencast contributing 316,000 tonnes from current production and stockpiles. The underground tonnes increased by 105,000 tonnes, to 2.6 million tonnes, equating to a 4.1% increase against the prior year period.
Underground milled head grade was down 0.17 grammes per tonne or 3.5% to 4.57 grammes per tonne (5PGE+Au) when compared to 4.74 grammes per tonne in the prior year period but showed an improvement from the quarter one grade of 4.55 grammes per tonne. The decline in the underground grade was partly due to the increased proportion of Merensky ore in the underground ore mix which increased from 19.5% of ore milled to 23.1% as well as challenging ground conditions at K3 shaft. The overall milled head grade is 4.31 grammes per tonne, a decline of 8.9% when compared to the prior year period primarily as a result of the lower open cast grade compared to a prior year period when no open cast tonnes were milled.
The benefits from our concentrator optimisation programme and good management discipline continued as underground concentrator recoveries for the quarter improved by 1.6% to 86.0% against the prior year period whilst opencast recoveries were a notable 82.7%.
Total Platinum in concentrate was 174,430 saleable ounces, an increase of 14,411 ounces or 9% when compared against the prior year period, with open cast operations contributing 9,218 ounces.
Total refined production for the second quarter of 2011 was up by 24.3% to 225,152 Platinum ounces. This was due to the increase in metals in concentrate and release of metals in process following the smelter re-build disruption from quarter one.
Sales and Pricing
Metal sales during the quarter increased by 37.7% to 251,880 Platinum ounces and 40% to 495,240 PGM ounces. The significant increase was due to the increased production and release of the stock built up in the first quarter when deliveries were impacted by adverse weather conditions in the northern hemisphere.
The US Dollar basket price was, at US$1,332, 20.8% higher than the prior year period and 13.3% higher than quarter one. The increase in our South African Rand basket was less marked at 10.8% due to the continued strengthening of the South African Rand against the US Dollar during the quarter when compared to the prior year period.
Lonmin also publishes today, in a separate announcement, its Interim Results for the half year ending 31 March 2011.
ENQUIRIES:
Investors / Analysts:
Tanya Chikanza +44 (0) 207 201 6000
Head of Investor Relations
Media:
Cardew Group +44 (0) 207 930 0777
Rupert Pittman / James Milton
Financial Dynamics +27 (0) 21 487 9000
Dani Cohen / Ravin Maharaj
3 months | 3 months | ||||||
to 31 Mar | to 31 Mar | ||||||
2011 - Act | 2010 - Act | ||||||
Tonnes mined | Marikana | Karee1 | kt | 1,107 | 1,025 | ||
Westerns1 | kt | 853 | 859 | ||||
Middelkraal1 | kt | 437 | 444 | ||||
Easterns1 | kt | 305 | 245 | ||||
Underground | kt | 2,703 | 2,572 | ||||
Opencast | kt | 143 | 7 | ||||
Total | kt | 2,846 | 2,579 | ||||
Pandora attributable2 | Underground | kt | 44 | 39 | |||
Lonmin Platinum | Underground | kt | 2,746 | 2,611 | |||
Opencast | kt | 143 | 7 | ||||
Total | kt | 2,890 | 2,618 | ||||
% tonnes mined from the UG2 reef | % | 72.5% | 76.6% | ||||
Tonnes milled3 | Marikana | Underground | kt | 2,536 | 2,453 | ||
Opencast | kt | 316 | - | ||||
Total | kt | 2,852 | 2,453 | ||||
Pandora4 | Underground | kt | 101 | 78 | |||
Lonmin Platinum | Underground | kt | 2,636 | 2,531 | |||
Head grade5 | g/t | 4.57 | 4.74 | ||||
Recovery rate6 | % | 86.0% | 84.7% | ||||
Opencast | kt | 316 | 0 | ||||
Head grade5 | g/t | 2.16 | 0.00 | ||||
Recovery rate6 | % | 82.7% | 0.0% | ||||
Total | kt | 2,952 | 2,531 | ||||
Head grade5 | g/t | 4.31 | 4.74 | ||||
Recovery rate6 | % | 85.9% | 84.7% | ||||
3 months | 3 months | ||||||
to 31 Mar | to 31 Mar | ||||||
2011 - Act | 2010 - Act | ||||||
Metals in concentrate7 | Marikana | Platinum | oz | 168,020 | 154,578 | ||
Palladium | oz | 78,660 | 72,579 | ||||
Gold | oz | 4,674 | 3,129 | ||||
Rhodium | oz | 21,630 | 22,124 | ||||
Ruthenium | oz | 34,734 | 33,543 | ||||
Iridium | oz | 7,566 | 7,353 | ||||
Total PGMs | oz | 315,284 | 293,306 | ||||
Nickel8 | MT | 921 | 615 | ||||
Copper8 | MT | 576 | 377 | ||||
Pandora4 | Platinum | oz | 6,410 | 5,441 | |||
Palladium | oz | 3,001 | 2,531 | ||||
Gold | oz | 45 | 37 | ||||
Rhodium | oz | 975 | 871 | ||||
Ruthenium | oz | 1,539 | 1,289 | ||||
Iridium | oz | 255 | 224 | ||||
Total PGMs | oz | 12,225 | 10,394 | ||||
Nickel8 | MT | 10 | 8 | ||||
Copper8 | MT | 6 | 5 | ||||
Lonmin Platinum | Platinum | oz | 174,430 | 160,019 | |||
Palladium | oz | 81,661 | 75,110 | ||||
Gold | oz | 4,719 | 3,166 | ||||
Rhodium | oz | 22,605 | 22,995 | ||||
Ruthenium | oz | 36,273 | 34,832 | ||||
Iridium | oz | 7,822 | 7,577 | ||||
Total PGMs | oz | 327,509 | 303,700 | ||||
Nickel8 | MT | 931 | 623 | ||||
Copper8 | MT | 582 | 381 | ||||
3 months | 3 months | ||||||
to 31 Mar | to 31 Mar | ||||||
2011 - Act | 2010 - Act | ||||||
Refined production | Lonmin refined metal production | Platinum | oz | 198,998 | 180,956 | ||
Palladium | oz | 95,643 | 79,325 | ||||
Gold | oz | 4,119 | 4,028 | ||||
Rhodium | oz | 24,245 | 21,381 | ||||
Ruthenium | oz | 51,530 | 47,117 | ||||
Iridium | oz | 8,768 | 10,502 | ||||
Total PGMs | oz | 383,302 | 343,310 | ||||
Toll refined metal production | Platinum | oz | 26,154 | 179 | |||
Palladium | oz | 13,090 | 63 | ||||
Gold | oz | 839 | - | ||||
Rhodium | oz | 3,713 | 485 | ||||
Ruthenium | oz | 10,935 | - | ||||
Iridium | oz | 2,311 | - | ||||
Total PGMs | oz | 57,042 | 727 | ||||
Total refined PGMs | Platinum | oz | 225,152 | 181,135 | |||
Palladium | oz | 108,733 | 79,388 | ||||
Gold | oz | 4,958 | 4,028 | ||||
Rhodium | oz | 27,958 | 21,866 | ||||
Ruthenium | oz | 62,465 | 47,117 | ||||
Iridium | oz | 11,078 | 10,502 | ||||
Total PGMs | oz | 440,344 | 344,036 | ||||
Base metals | Nickel9 | MT | 1,190 | 883 | |||
Copper9 | MT | 726 | 526 | ||||
Sales | Lonmin Platinum | Platinum | oz | 251,880 | 182,878 | ||
Palladium | oz | 131,326 | 81,783 | ||||
Gold | oz | 5,362 | 5,393 | ||||
Rhodium | oz | 33,412 | 22,039 | ||||
Ruthenium | oz | 61,610 | 50,360 | ||||
Iridium | oz | 11,650 | 11,390 | ||||
Total PGMs | oz | 495,240 | 353,844 | ||||
Nickel9 | MT | 1,217 | 814 | ||||
Copper9 | MT | 688 | 523 | ||||
Chrome9 | MT | 128,638 | 155,492 | ||||
3 months | 3 months | |||||||
to 31 Mar | to 31 Mar | |||||||
2011 - Act | 2010 - Act | |||||||
Average prices | Platinum | $/oz | 1,784 | 1,535 | ||||
Palladium | $/oz | 788 | 432 | |||||
Gold | $/oz | 1,153 | 1,110 | |||||
Rhodium | $/oz | 2,390 | 2,467 | |||||
Ruthenium | $/oz | 173 | 173 | |||||
Iridium | $/oz | 885 | 447 | |||||
$ basket price excl. by-product revenue11 | $/oz | 1,332 | 1,103 | |||||
R basket price excl. by-product revenue11 | R/oz | 9,341 | 8,432 | |||||
R basket price incl. by-product revenue12 | R/oz | 9,852 | 8,614 | |||||
Nickel9 | $/MT | 23,336 | 15,309 | |||||
Copper9 | $/MT | 9,137 | 6,404 | |||||
Chrome9 | $/MT | 26 | 2 | |||||
ExchangeRates | Average rate for period13 | R/$ | 6.98 | 7.49 | ||||
Closing rate | R/$ | 6.77 | 7.28 | |||||
Notes: | ||||||||
1 | During 2010 the management structure in mining was revised into four business units. Karee includes the shafts K3, 1B and 4B and will also include K4 once production commences. Westerns comprises Rowland, Newman and ore purchases from W1. Middelkraal represents Hossy and Saffy. Easterns includes E1, E2 and E3. | |||||||
2 | Pandora attributable tonnes mined includes Lonmin's share (42.5%) of the total tonnes mined on the Pandora joint venture. | |||||||
3 | Tonnes milled exclude 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 | 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). | |||||||
6 | Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag). | |||||||
7 | Metals in concentrate include metal derived from slag processing and have been calculated at industry standard downstream processing losses to present produced saleable ounces. | |||||||
8 | Corresponds to contained base metals in concentrate. | |||||||
9 | 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. Chrome is produced in the form of chromite concentrate and volumes shown are in the form of chromite. | |||||||
10 | Concentrate and other sales have been adjusted to a saleable ounce basis using industry standard recovery rates. | |||||||
11 | Basket price of PGMs is based on the revenue generated in Rand and Dollar from the actual PGMs (5PGE + Au) sold in the period based on the appropriate Rand / Dollar exchange rate applicable for each sales transaction. | |||||||
12 | As per note 11 but including revenue from base metals. | |||||||
13 | Exchange rates are calculated using the market average daily closing rate over the course of the period. | |||||||
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