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LON
LOLMI
LON - Lonmin - Third Quarter Production Report and Trading Update
Lonmin Plc
(Incorporated in England and Wales)
(Registered in the Republic of South Africa under registration number
1969/000015/10)
JSE code: LON
Issuer Code: LOLMI & ISIN: GB0031192486
("Lonmin")
16 July 2007
Third Quarter Production Report and Trading Update
Lonmin today announces its production report for the nine months to 30 June 2007
(unaudited).
Our Marikana smelting operations returned to normal during the third quarter
with the Number One furnace operating at full capacity during the last two
months of the quarter. Marikana mined 9.6 million tonnes during the nine
months, a small increase on the prior year period after stripping out the effect
of the additional seven days in the prior year. The Number One furnace was
restarted on 30 April 2007 and we have run this furnace side by side with the
Merensky furnace allowing us to process around 63,000 tonnes of concentrate in
the third quarter reducing by around two thirds our concentrate inventory
stockpile. Total sales for the nine months were 477,639 ounces of Platinum and
897,661 ounces of total PGMs.
We are forecasting that our full year production will be between 920,000 and
940,000 saleable ounces of Platinum in concentrate. We are continuing to
experience poorer recoveries at our concentrators principally due to the ongoing
change in the mix of ore types. This has principally been caused by an earlier
than anticipated shift in the mix of underground ores with a larger proportion
of ore feed now coming from the Eastern side of our Marikana property. These
ores are proving to be more difficult to mill than planned. We have instigated
a detailed plan to maximise recoveries but this ore mix effect is expected to
continue to have an impact during the last quarter of this year and throughout
2008 until our new K4 shaft comes into production in the 2009 financial year.
Our operations have also been impacted by the continued shortage of, and
difficulty in retaining, high quality skilled labour in South Africa.
While the Process Division has run extremely well since the restart of the
Number One furnace in April, we now believe we will be unable to process the
entire inventory build up through our Base Metal and Precious Metal Refineries
before the end of our financial year. In order to retain the full margin on
these ounces we have decided not to sell or toll refine this material but to
defer the sales of some 70,000 to 90,000 Platinum ounces into the 2008 financial
year.
We estimate that the above issues will reduce our full year sales to between
820,000 to 840,000 ounces of Platinum and 1,520,000 to 1,550,000 ounces of total
PGMs. We will however continue to meet all our contractual sales obligations.
The reduction in production volumes will also impact our full year unit costs
and we are revising our C1 cost guidance net of base metal credits to between
R3,150 to R3,250 per PGM ounce sold for the Marikana operations and R3,450 to
R3,550 per PGM ounce sold for Marikana and Limpopo combined.
Enquiries:
Alex Shorland-Ball +44 (0) 20 7201 6060
Vice President, Investor Relations & Communications
Lonmin will be hosting an analyst conference call at 9.00 am UK time (10.00 am
SA time) today.
Those wishing to take part should dial in on the following numbers: Access
number: +44 (0) 20 8609 0205,
UK Freephone Number: 0800 358 2705, ZA Freephone Number: 0800 999 539 and Pin
Code: 621126#
Mining 9months to 9 months
30 June to 30 June
2007 2006 (1)
Tonnes mined Marikana Underground 000 8,460 8,497
Opencast 000 1,176 1,322
Total 000 9,636 9,818
Limpopo Underground 000 564 669
Opencast 000 0 14
Total 000 564 683
JV attribu- Underground 000 92 75
table (2)
Opencast 000 232 102
Total 000 324 178
Lonmin Underground 000 9,116 9,240
Platinum
Opencast 000 1,408 1,438
Total 000 10,524 10,678
Tonnes Marikana Underground 000 8,415 8,463
milled (3)
Opencast 000 1,078 1,558
Total 000 9,492 10,021
Limpopo Underground 000 595 685
Opencast 000 0 14
Total 000 595 699
JV(4) Underground 000 216 177
Opencast 000 530 218
Total 000 747 395
Ore Underground 000 75 0
purchases
(5)
Opencast 000 20 18
Total 000 95 18
Lonmin Underground 000 9,301 9,324
Platinum
Opencast 000 1,628 1,809
Total 000 10,930 11,133
9months to 9 months
30 June to 30 June
2007 2006 (1)
Metals in Marikana Platinum oz 596,908 664,875
concentrate
(6)
Palladium oz 271,967 296,840
Gold oz 16,562 18,201
Rhodium oz 78,723 86,440
Ruthenium oz 126,419 138,795
Iridium oz 26,344 28,293
Total PGMs oz 1,116,922 1,233,443
Nickel (7) MT 2,900 3,098
Copper (7) MT 1,719 1,849
Limpopo Platinum oz 27,372 38,594
Palladium oz 18,867 29,192
Gold oz 2,231 2,655
Rhodium oz 2,908 4,460
Ruthenium oz 4,569 6,702
Iridium oz 1,049 1,433
Total PGMs oz 56,996 83,037
Nickel (7) MT 596 642
Copper (7) MT 404 432
JV (4) Platinum oz 41,399 21,458
Palladium oz 19,219 9,753
Gold oz 368 197
Rhodium oz 5,817 3,134
Ruthenium oz 8,523 4,766
Iridium oz 1,893 1,007
Total PGMs oz 77,219 40,314
Nickel (7) MT 48 13
Copper (7) MT 26 11
Ore Platinum oz 3,693 520
purchases
(5)
Palladium oz 1,709 147
Gold oz 46 26
Rhodium oz 526 19
Ruthenium oz 798 45
Iridium oz 177 9
Total PGMs oz 6,949 766
Nickel (7) MT 18 1
Copper (7) MT 9 0
Lonmin Platinum oz 669,372 725,447
Platinum
Palladium oz 311,762 335,932
Gold oz 19,206 21,079
Rhodium oz 87,974 94,052
Ruthenium oz 140,308 150,308
Iridium oz 29,464 30,742
Total PGMs oz 1,258,087 1,357,561
Nickel (7) MT 3,562 3,755
Copper (7) MT 2,159 2,293
Metallurgy 9months 9 months to 30
to 30 June
June
2007 2006 (1)
Metallurgy Lonmin Platinum oz 433,562 536,096
refined
Metal
Production
Palladium oz 193,983 244,894
Gold oz 13,275 13,357
Rhodium oz 52,991 80,359
Ruthenium oz 83,442 122,497
Iridium oz 19,533 25,781
Total PGMs oz 796,787 1,022,985
Toll refined Platinum oz 84,782 0
Metal
production
Palladium oz 35,657 0
Gold oz 0 0
Rhodium oz 11,485 0
Ruthenium oz 18,740 0
Iridium oz 3,700 0
Total PGMs oz 154,365 0
Total Platinum oz 518,343 536,096
Refined
PGMs
Palladium oz 229,641 244,894
Gold oz 13,275 13,357
Rhodium oz 64,476 80,359
Ruthenium oz 102,183 122,497
Iridium oz 23,234 25,781
Total PGMs oz 951,152 1,022,985
Base metals Nickel (8) MT 3,106 3,091
Copper (8) MT 1,574 1,612
Lonmin Group Metal Sales
Sales Refined Platinum oz 475,287 530,706
Metal
Sales
Palladium oz 208,320 243,103
Gold oz 14,880 15,617
Rhodium oz 66,259 84,213
Ruthenium oz 103,176 131,642
Iridium oz 25,537 24,855
Total PGMs oz 893,460 1,030,136
Concentrate Platinum oz 2,352 46,481
and other
(9)
Palladium oz 1,109 20,511
Gold oz 125 1,777
Rhodium oz 203 5,275
Ruthenium oz 348 8,661
Iridium oz 64 1,701
Total PGMs oz 4,201 84,407
Lonmin Platinum oz 477,639 577,186
Platinum
Palladium oz 209,429 263,614
Gold oz 15,005 17,395
Rhodium oz 66,462 89,489
Ruthenium oz 103,524 140,303
Iridium oz 25,601 26,556
Total PGMs oz 897,661 1,114,543
Nickel (8) MT 3,096 3,203
Copper (8) MT 1,400 1,905
9months 9 months to 30
to 30 June
June
2007 2006 (1)
Prices Average Platinum $/oz 1,171 1,030
Palladium $/oz 340 290
Gold $/oz 624 549
Rhodium $/oz 5,631 3,638
Ruthenium $/oz 420 104
Iridium $/oz 402 225
Basket price $/oz 1,190 928
of PGMs
Nickel (8) $/MT 27,706 11,974
Copper (8) $/MT 6,883 5,310
Exchange Average rate for period R/$ 7.20 6.42
Rates
Closing rate R/$ 7.01 7.15
Notes:
1 The nine months to June 2006 comprised an additional 7 days mining
performance for WPL and EPL arising on the change of basis to report on a
calendar month.
2 JV 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 Metals in concentrate has been changed from the previously reported
definition of full contained metal to adjust for industry standard
downstream processing losses.
7 Corresponds to contained base metals in concentrate.
8 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.
9 Concentrate and other sales have been adjusted to a saleable ounces basis
using standard industry recovery rates.
Date: 16/07/2007 08:09:18 Produced by the JSE SENS Department.
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