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LON
LOLMI
LON - Lonmin Plc - Q1 production report and interim management statement
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")
Q1 Production Report and Interim Management Statement
24 January 2008
Lonmin today announces its production report and interim management statement
for the quarter to 31 December 2007 (unaudited).
Total tonnes mined for the quarter were 3.1 million a decline of 11% on the 3.4
million tonnes mined in the first quarter of the prior year.
Our Marikana operations mined a total of 2.8 million tonnes in the quarter, down
9% on the prior year with underground operations contributing 2.5 million
tonnes. Underground tonnage was impacted by seven lost shifts at our K3 and
Rowland shafts due to a shutdown in October related to a fatal accident. The
entire Marikana operation was also impacted by the national one day safety
strike on 4 December 2007 and higher than expected absenteeism rates among key
skill groups in the week before Christmas. The combined impact of these events
was lost production of around 330,000 tonnes or 20,000 saleable ounces of
Platinum and a depletion of our ore stockpiles.
Our mechanised operations at Marikana performed well during the quarter as we
continued to increase production from Hossy and Saffy shafts. Mechanised
production was 300,000 tonnes mined, more than three times the total for the
first quarter of the 2007 financial year. This equates to around 12% of our
Marikana underground tonnes and is 39% higher than in the fourth quarter of the
2007 financial year. As planned, production from our shallow conventional
shafts at Marikana decreased during the quarter, down some 210,000 tonnes on the
equivalent prior year period.
During the quarter we processed 721,000 tonnes of opencast ore from both
Marikana and Pandora including 305,000 tonnes of stockpiled ore. We shut down
two low grade Merensky opencast pits during the quarter and continue to review
the 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, as
production continued to be constrained by a lack of flexibility in the mine due
to the ore reserve disruption caused by the IRUP occurrence as well as
industrial relations disruptions to the shift cycle which have since been
resolved. Attributable underground tonnes mined at Pandora increased by 12% to
34,000 tonnes.
Underground milled head grade was 4% lower than the prior year, at 4.76 grammes
per tonne (5PGE+Au) as a result of the increased percentage of lower grade
development 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 prior
year as we milled a combination of low grade stockpiles and more oxidised
shallow material.
The concentrators produced a total of 189,615 saleable ounces of Platinum in
concentrate, down 17% on the first quarter of the 2007 financial year reflecting
the reduced throughput from the mines. The recently initiated improvement plans
at the plants have started to show early signs of success with underground
recoveries up from 80.5% in the fourth quarter of 2007 to 81.5% whilst opencast
recoveries rose from 55.9% to 57.5%.
Total refined production for the quarter was 154,526 ounces of Platinum, a
decline of 19% on the prior year. This again reflected the lower level of
throughput from the mines and a build up of metal in process at the refineries
primarily as a result of a trial we are currently undertaking for the external
processing of certain residues to improve our second pass recoveries. This
metal in process will be released later in the year.
Final metal sales for the quarter were 145,611 ounces of Platinum and 274,618
ounces of total PGMs, slightly ahead of the first quarter of the 2007 financial
year.
Overall mine production for the quarter was some 20,000 saleable ounces of
Platinum lower than planned and we ended the quarter with minimal stockpiles
ahead of the concentrators. In early January, we continued to experience high
levels of absenteeism among key skill groups and this slow return to work
coupled with a lack of stocks caused us to lose concentrator production at the
beginning of the month. Given the production shortfall in the first quarter,
the lost production in January and our revised estimate of the impact of the
Easter break in March, our full year sales target is now around 860,000 ounces
of Platinum.
This target is based on our expectation of a strong operational performance in
the second half, driven by the continued effective ramp up of our mechanised
shafts, the implementation of the optimisation plans being put in place by our
new mining team and the continuation of recent improvements in our concentrator
recoveries. However, any further safety stoppages or any significant escalation
of current power supply interruptions are risks to this target.
During the quarter there have been no material events or transactions affecting
Lonmin, and there has been no significant change in the financial position or
performance of the group since 30 September 2007, other than as described in
this production report.
Enquiries:
Alex Shorland-Ball Tel: +44 (0) 207 201 6060
Vice President, Investor Relations & Communications
3 months 3 months
to 31 to 31
December December
2007 2006
Tonnes Marikana Underground - 000 2,175 2,658
mined Conventional
Underground - M&A1 000 300 96
Underground - 000 2,475 2,754
total
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
attributable
2
Opencast 000 47 74
Total 000 81 104
Lonmin Underground 000 2,647 2,983
Platinum
Opencast 000 416 458
ERROR Total 000 3,063 3,441
Tonnes Marikana Underground 000 2,509 2,790
milled3
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 3 months
to 31 to 31
December December
Restated
8
2007 2006
Metals in Marikana Platinum oz 172,129 204,641
concentrate
9
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 3 months
to 31 to 31
December December
2007 2006
Metallurgy Lonmin Platinum oz 154,526 186,981
refined
Metal
Production
Palladium oz 62,184 81,064
Gold oz 3,521 5,535
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 Platinum oz 0 3,823
refined
Metal
production
Palladium oz 0 1,764
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
PGMs
Palladium oz 62,184 82,828
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
Sales
Palladium oz 63,328 58,351
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 3 months
to 31 to 31
December 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 $/MT 5,966 6,622
ExchangeRates Average rate for period R/$ 6.78 7.53
Closing R/$ 6.85 6.97
rate
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.
Date: 24/01/2008 09:00:13 Produced by the JSE SENS Department.
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