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PAM
PAM
PAM - Palabora Mining - Reviewed preliminary results and dividend announcement
for the year ended 31 December 2007
Palabora Mining
Company Limited and its Subsidiaries
(Incorporated in the Republic of South Africa)
(Reg. No. 1956/002134/06)
JSE Code: PAM
ISIN: ZAE000005245
("Group" or "Palabora" or "the Company")
REVIEWED PRELIMINARY RESULTS AND DIVIDEND ANNOUNCEMENT
for the year ended 31 December 2007
COMMENTARY
Overview
"Palabora is delivering as promised", remarked Keith Marshall, the Group`s MD
commenting on the results for fiscal year 2007.
While there is always more work to be done on the safety front, we had a good
year in this regard. We saw improvements across the board on our safety
statistics.
For two consecutive years, Palabora has achieved another set of stellar results.
Daily underground production at 32 453 tonnes per day, exceeded the design
capacity of 30 000 tonnes. Improved throughput from the concentrator and
efficiencies from the smelter were behind the increase in refined copper, which
showed a 13% growth year on year.
We have improved the balance sheet by paying down debt. The reversal of the
impairment losses from 2004 is a testimony to the enhanced viability of the
enterprise.
Group financial results
For the year ended 31 December 2007 31 December 2006
Net profit for the year R1 861 million R467 million
Basic earnings per share 3 850 cents 1 291 cents
Net profit for the year R722 million R467 million
(excluding impairment reversal)
Basic earnings per share 1 493 cents 1 291 cents
(excluding impairment reversal)
Profit from continuing operations R2 892 million R1 172 million
before interest and tax (EBIT)
Profit from continuing operations R1 202 million R1 172 million
before interest and tax (EBIT)
(excluding impairment reversal)
Headline earnings R721 million R481 million
Headline earnings per share 1 491 cents 1 329 cents
(Excess cash)/net debt (excluding (R433 million) R1 004 million
the hedge)
Dividend per share 3.10 cents -
Net profit
The net profit for the year ended 31 December 2007 increased from R467 million
in the prior year to R1 861 million, or 3 850 cents per diluted share compared
with 1 291 cents per share in 2006. Basic earnings excluding the effect of the
impairment reversal is R722 million or 1 493 cents per share.
Sales of products increased by R1 164 million (23%) to R6 178 million. This is
mainly due to improved underground production (+R375 million), higher realised
copper prices (+R250 million), higher realised prices for magnetite and
vermiculite (R47 million and R22 million respectively), and a strengthening in
the average US$/Rand exchange rate of 7,05 in 2007 compared with 6,77 for 2006
(+R213 million).
In the year under review, a total of 92 846 tonnes of finished copper metal was
sold, compared with 80 986 tonnes in 2006. Reverts and concentrate sales
contributed an additional 11 629 tonnes of copper(2006: 16 011 tonnes). The
Group achieved an average realised selling price (post hedge) per tonne for
copper rod and cathode of R39 829 (2006: R35 841) and R36 080 (2006: R36 119)
respectively.
The increase in revenue was partially offset by the realised hedging losses
resulting from the swap settlement of 45 021 tonnes of copper (R1 320 million).
Total Group cost of sales increased by R635 million, from R2 362 million in 2006
to R2 997 million for 2007, representing an increase of 27% from the previous
year. However, as a percentage of sales, the ratio of cost of sales to revenue
remained below 50% (48.5% in 2007 compared with 47,1% in 2006). The increase in
cost of sales as a percentage of sales from 2006 to 2007 resulted mainly from a
credit amount of R369 million in 2006 on the revaluation of stockpiles which
reduced the cost of sales for that year. The increase in cost of sales for 2007
resulted mainly from the following:
- Concentrator costs increased by R123 million mainly due to the processing of
Palabora marginal ore during 2007, reduction of credit from Foskor, additional
reagent costs associated with the processing of copper oxide ore, and higher
material transport costs;
- Higher personnel costs of R110 million due to expansion of the operations;
- Increased energy consumables cost of R48 million compared with 2006;
- The underground costs increased compared with the prior period mainly due to
material transport relating to Palabora marginal ore processed during periods
of high copper prices (R38 million);
- Other items included in the 2007 costs were charges relating to the
underground lift 2 pre-feasibility diamond drilling and corrosion control costs
incurred in the concentrator section (R11 million);
- Purchased copper concentrate expenditure reduced compared with 2006. During
April 2007 Palabora suspended the processing of Foskor marginal ore, and resumed
processing its own marginal and oxide ore stock piles. As a result copper
concentrate volumes purchased during 2007 (22 361 tonnes) were 3kt lower
compared with 2006 (R67 million). The volume effect was partially offset by the
higher LME copper price impact on purchased concentrate (R57 million).
Consistent with our comment in the 2006 annual report about investing prudently
to ensure value creation, we remain diligent in managing our costs.
The Group achieved a gross profit from continuing operations during 2007 of R1
861 million, compared with a gross profit of R1 620 million in 2006.
The Group profit from continuing operations before interest and tax (EBIT) was
R2 892 million, an improvement of R1 720 million compared with EBIT of R1 172
million in 2006.
Factors that contributed to the net profit before taxation of R2 789 million
include:
- The full reversal of previously recognised impairment losses amounting to R1
690 million. In the 2004 financial year, the company recognised an impairment
loss of R2 342 million before tax. A review of long-term assets is carried out
at each reporting date where there is an indication that an impairment loss may
no longer exist or may have decreased. Following this review, management
believes that the carrying value of the company`s assets is not aligned with its
recoverable value. As a result, the maximum allowable impairment reversal of R1
690 million was recognised in the 2007 financial statements.
- A decrease of R307 million in net finance costs was due to lower interest cost
primarily as a result of the debt repayments made in 2007, the debentures that
were all either converted or redeemed in the previous financial year, and lower
foreign exchange losses of R28 million in 2007 compared with R146 million in
2006.
- An increase of R88 million in the selling and distribution costs and an
increase of R43 million in administration expenses. The increase in the selling
and distribution costs is mainly attributable to the cost incurred for the
export of magnetite sales. The increase in administration cost is due to
external services.
The tax charge for the year ended 31 December 2007 totalled R928 million
compared with R278 million for 2006, an increase of R650 million, primarily as a
result of higher earnings for the year, and the impairment reversal. The
effective tax rate was 33,28% for the year (2006: 36,50%).
Cash flow
Cash and cash equivalents at 31 December 2007 were R841 million compared with
R670 million in 2006.
For the year ended 31 December 2007, the Group generated a net cash inflow of
R171 million compared with a net cash inflow of R468 million for the 2006 year.
Cash from operating activities of R1 604 million (2006: R946 million) was
generated mainly as a result of increase in realised (pre-hedge) copper rod and
cathode prices (2007: 332,6 Usc/lb, 2006: 316 Usc/lb) and the sale of low grade
concentrate and reverts of 11 629 tonnes of copper (2006: 16 011 tonnes) as part
of the focus on monetising our internal copper inventories as well as the low
grade surface stockpiles. The interest expense reduced as a result of the
repayments of the long term loans and the redemption of debentures in 2006.
The group spent R167 million on investing activities. Capital investment of R182
million (2006: R144 million) was primarily spent on the underground (R62
million) and concentrator (R77 million). The expenditure relates mainly to new
underground mobile equipment, the refurbishing of the grinding circuit, and the
South and East paddock tailing dams. The net cash outflow was offset by the
proceeds received from the sale of property, plant and equipment and other
investing activities in the amount of R15 million.
The cash outflow from financing activities of R1 266 million (2006: R350 million
outflow) was due to:
- repayments of the third and fourth principal repayments of the senior loan and
mandatory prepayment of the senior term facility agreement of R405 million;
- settlement of the unsecured Rio Tinto loan of R732 million and an additional
repayment on the Rio Tinto secured loan of R117 million; and
- the full settlement of the finance leases of R12 million.
Net Debt
Net debt excluding the hedge decreased from R1 004 million in 2006 to a positive
balance of R433 million in 2007 due to the following:
- Total borrowings decreased by R1 266 million from R1 674 million at 31
December 2006 to R408 million in 2007; and
- Cash balances increased by R171 million to R841 million.
Fifty nine percent of the Group`s total borrowings were denominated in US$ for a
total amount of US$ 36 million.
Hedging
The combined hedge book as at 31 December 2007 amounts to 145 544 tonnes of
copper for a total amount of R2 491 million spread over 5 years and 9 months.
The mark-to-market valuation of the hedge book liability increased by R1 151
million (from R2 453 million to R3 604 million). The settlement of 45 021 tonnes
of copper commodity swap for the 2007 year resulted in a hedging loss of R1 320
million reducing the benefit of the higher market prices. The increase is mainly
attributed to the change in the valuation inputs as discussed under changes in
estimates, and the changes in expected future copper prices.
Ore reserves
The total Proven Ore Reserves remaining as at 31 December 2007 were 104 million
tonnes ore (2006: 118 million tonnes) at 0,62% (2006: 0,64%) copper content.
Black Economic Empowerment (BEE)
Progress has been made in empowering the company. We anticipate completing a BEE
transaction and making significant strides in transformation in 2008.
Pension Fund Surplus
On 4 April 2007, the Fund submitted the preliminary financial statements to the
FSB and the Liquidator submitted his schedule K on 6 August 2007. In October
2007 the FSB approved the advertisement of the liquidation. The advertisement of
the liquidation was placed in two local newspapers and the government gazette.
The preliminary financial statements of the Palabora Mining Pension Fund were
opened for inspection for a period of 30 days. A further 14 days thereafter were
allowed for objections to be lodged. We understand that an objection was lodged
with the FSB during December 2007 and the objection is still under
consideration.
Only after the FSB approval has been obtained, can the liquidator release the
employer`s share of the surplus in the Fund. This is estimated at approximately
R195 million before tax and including accrued interest.
Dividend
Palabora last declared a dividend in July 2001. The actual dividend amount paid
was R0.60 per share which represented 8% of earnings. Given the company`s
stellar performance in 2007, and taking into account the near term capital
requirements, the Board declared a dividend on 31 January 2008 of R3.10 per
share. This dividend represents 21% of the 2007 earnings before the impairment
reversal.
Payment in South African Rand will be made on Monday, 10 March 2008 to
shareholders recorded in the register on 7 March 2008. The last day to trade to
qualify for the dividend will be Friday, 29 February 2008 and the shares will
trade ex-dividend from Monday, 3 March 2008. Share certificates may not be
dematerialised or rematerialised between Monday, 3 March 2008 and Friday, 7
March 2008 both days inclusive.
This financial report does not reflect this dividend payable, which will be
recognised in shareholders` equity as an appropriation of retained earnings in
the year ending 31 December 2008.
Corporate Governance
On 1 February 2007 Mr. Rufus Maruma resigned as a non-executive director of
Palabora and on 14 February 2007, Mr. George Negota was appointed as an
independent non executive Chairman of the Board. On 7 May 2007 Ms Shelley Thomas
was appointed to the Board as an independent non-executive director and on 31
December 2007 Mr. Frank Weldon retired from Anglo American and as a result,
stepped down as an alternate director to Mr Johan Posthumus.
The Board comprises of three independent non-executive directors, three non-
executive directors and two executive directors.
Appreciation
We are thankful for the dedication of our employees and other stakeholders who
have played a significant role in the delivery of the company`s strategic and
operational plans.
GM Negota K Marshall
Chairman Managing Director
4 February 2008
GROUP RESULTS
Income statement
for the year ended 31 December 2007
Group
Reviewed Audited
31 December 31 December
2007 2006
R`000 R`000
Continuing operations
Sale of products 6 177 954 5 014 200
Hedged loss realised (1 319 825) (1 032 321)
Revenue 4 858 129 3 981 879
Cost of sales (2 996 844) (2 362 149)
Gross profit 1 861 285 1 619 730
Other income 21 290 101 582
Impairment reversal 1 690 156 -
Selling and distribution costs (356 493) (267 526)
Administration expenses (322 358) (279 033)
Other expenses (1 634) (3 025)
Profit from continuing operations before 2 892 246 1 171 728
tax and net finance costs
Finance costs - net (102 931) (410 170)
Finance cost (172 028) (440 761)
Finance income 69 097 30 591
Profit before tax 2 789 315 761 558
Income tax expense (928 402) (278 054)
Profit from continuing operations 1 860 913 483 504
Discontinued operation
Loss from discontinued operation - (16 158)
Profit for the year 1 860 913 467 346
Allocated as follows:
Equity holders of parent 1 860 913 467 346
Earnings per share (cents):
- Basic earnings per share, total 3 850 1 291
operations (cents)
- Basic earnings per share, continuing 3 850 1 336
operations (cents)
- Basic earnings per share, discontinued - (45)
operations (cents)
- Diluted earnings per share, total 3 850 1 291
operations (cents)
- Diluted earnings per share, continuing 3 850 1 336
operations (cents)
- Diluted earnings per share, - (45)
discontinued operations (cents)
- Headline earnings per share (cents) 1 491 1 329
Balance sheet
as at 31 December 2007
Group
Reviewed Audited
31 December 31 December
2007 2006
R`000 R`000
Assets
Non-current assets
Property, plant and equipment 3 576 481 1 970 944
Intangible assets - 325
Available for sale financial asset 312 052 275 571
Deferred tax asset 1 171 255 796 440
5 059 788 3 043 280
Stores 80 576 65 433
Product inventories 573 524 768 753
Trade and other receivables 627 441 615 242
Current tax asset - 4 498
Cash and cash equivalents 841 110 670 336
2 122 651 2 124 262
Total assets 7 182 439 5 167 542
Shareholders` equity and liabilities
Capital and reserves
Share capital and premium 629 551 629 551
Other reserves (2 211 213) (1 446 951)
Retained earnings 2 430 759 569 846
Total shareholders` equity 849 097 (247 554)
Non-current liabilities
Long term borrowings 193 818 1 489 470
Derivative financial instrument 2 564 762 1 410 363
Provisions:
- Close-down and restoration costs 362 873 314 408
- Post retirement medical benefits 145 681 121 772
Deferred tax liability 1 054 636 259 293
4 321 770 3 595 306
Trade and other payables 555 777 527 140
Derivative financial instrument 1 039 561 1 042 969
Provisions - 6 555
Current portion of long-term borrowings 214 082 185 254
Current taxation liabilities 119 737 2 807
Group companies - related parties 82 415 55 065
2 011 572 1 819 790
Total liabilities 6 332 342 5 415 096
Total equity and liabilities 7 182 439 5 167 542
Statement of recognised income and expenditure
for the year ended 31 December 2007
Group
Reviewed Audited
31 December 31 December
2007 2006
R`000 R`000
Available-for-sale investments:
- Valuation gains taken to equity 36 480 62 871
Exchange differences on translation of (5 885) 22 928
foreign operations
Cash flow hedges:
- Losses taken to equity (2 470 676) (2 664 895)
- Transferred to profit or loss for the 1 319 825 1 032 321
year
Actuarial losses on defined benefit plans (18 821) (12 901)
Tax on items taken directly to or 374 815 796 440
transferred from equity
Net loss recognised directly in equity (764 262) (763 236)
Profit for the year 1 860 913 467 346
Total recognised income and expenses for 1 096 651 (295 890)
the year
Attributable to:
Equity holders of the parent 1 096 651 (295 890)
Summarised cash flow statement
for the year ended 31 December 2007
Group
Reviewed Audited
31 December 31 December
2007 2006
R`000 R`000
Cash flows from operating activities 1 604 265 946 060
Cash generated from operating activities 1 733 032 1 192 212
Interest paid (172 028) (251 607)
Interest received 54 891 14 158
Taxation paid (11 630) (8 703)
Cash flows from investing activities (166 991) (127 576)
Replacement of property, plant and (182 407) (144 160)
equipment
Proceeds on disposal of property, plant 1 210 5 257
and equipment
Amounts invested in rehabilitation fund - (2 259)
Interest received 14 206 13 586
Cash flows from financing activities (1 266 500) (350 427)
Payment of finance lease (12 145) (1 202)
Long term borrowings repaid (1 254 355) (349 225)
Increase in cash and cash equivalents 170 774 468 057
At beginning of year 670 336 202 279
At end of year 841 110 670 336
CORPORATE INFORMATION
The Group`s preliminary condensed consolidated financial statements of Palabora
for the year ended 31 December 2007 were authorised for issue in accordance with
a resolution of the Board of Directors passed on 31 January 2008.
The Group is a limited liability company incorporated and domiciled in South
Africa. The address of its registered office is 1 Copper Road, Palabora, 1389.
The Group has its primary listing on the JSE Limited.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
Audit review
The year end financial results have been reviewed in terms of paragraph 3.22 of
the Listings Requirements of the JSE by the group`s auditor,
PricewaterhouseCoopers Inc. The unqualified review opinion is available on
request from the Company secretary.
Basis of preparation
The preliminary condensed consolidated financial statements of the Group for the
year ended 31 December 2007 have been prepared in accordance with International
Accounting Standard (IAS) 34 (Interim Reporting).
The preliminary financial report does not include all the information and
disclosures required in the annual financial statements, and should be read in
conjunction with the Group`s annual financial statements as at 31 December 2006.
Significant accounting policies
The accounting policies applied in the presentation of the preliminary report
are consistent with those applied for the year ended 31 December 2006. This had
no impact on the financial statements other than additional disclosure that will
be included in the full set of the annual financial report for the year ended 31
December 2007.
Changes in estimates
Impairment reversal of non-financial assets
Against a background of favourable financial results, including stable
production from the underground mine and the sustained high copper price, an
assessment of the recoverable amount of Palabora`s copper business was
undertaken in the second half of 2007. This resulted in the reversal of R1 690
million before taxation of the 2004 asset impairment which resulted in the
reversal of the full impairment amount available to be reversed, based on an
assessment of the value-in-use. In line with market practice, value-in-use was
estimated using a discounted cash flow analysis. The price assumptions for
copper was based on management`s long term forecast prices. IAS 36 Impairment of
Assets requires that the future exchange rates used in a value in use assessment
remain at the level of the spot rate as of the reporting date. The cash flow
forecasts were discounted at a post-tax rate of eight and a half percent.
Calculation of maximum amount available for reversal R`000
Original pre-tax impairment 2 341 752
Less: Impairment charge related to assets taken out of (95 705)
service
Less: Depreciation that would have been recognised had (555 891)
there been no impairment
Amount of impairment reversal before tax 1 690 156
Taxation (550 896)
Amount of impairment reversal after tax 1 139 260
Recognition of the maximum potential impairment reversal is based primarily on
Palabora`s assessment of the copper cash generating unit`s value-in-use. The
surplus that results when this value-in-use is compared with the carrying value
is in excess of the maximum impairment reversal.
Reversal per class of asset R`000
Land and rehabilitation assets 11 322
Mine development and infrastructure 1 678 834
Total 1 690 156
* Mark-to-market valuation of the hedge book
Following changes in the forward copper market and also changes in management`s
view of the long term copper price, the mark-to-market revaluation of the hedge
book resulted in a R1 208 million increase in the hedge liability.
* Depreciation of assets by units-of-production method
The Group complies with revised IAS 16 which requires that every business
performs an assessment of the useful lives of its assets at the end of each
financial year and adjusts depreciation charges accordingly. The re-assessment
of the life-of-mine finalised at the start of the 2007 year impacted the useful
lives of assets being depreciated under the life-of-mine method and the effects
of changes in estimated life were applied prospectively over the remaining life
of the asset.
* Post retirement medical liability
The cost of post employment medical benefits is determined using actuarial
valuations. The actuarial valuation involves making assumptions about discount
rates, mortality rates and income at retirement. Due to the long-term nature of
these plans, such estimates are subject to significant uncertainty. The net
employee liability at 31 December 2007 is valued at R146 million compared with
R122 million at 31 December 2006. The main assumptions are summarised below:
Valuation date 31 December 2007 31 December 2006
Discount rate 8,50% p.a. 9,00% p.a.
Health care cost inflation 7,25% p.a. 7,75% p.a.
CPI inflation 5,25% p.a. 4,5% p.a.
Expected retirement age 58 58
Full eligibility age 53 53
Membership discontinued at 0% 0%
retirement
Post-retirement mortality PA(90) ultimate PA(90) ultimate
table rated down table
2 years with a 1%
improvement p.a.
from 2006
Withdrawal table 0% - 15% (unisex) 0% - 16% (males)
0% - 24% (females)
The valuation resulted in an actuarial loss of R19 million being recognised in
the statement of recognised income and expenditure.
* Provision for Close-down and Restoration cost
The provision for close-down and restoration costs was impacted by the following
movements during the year ended 31 December 2007:
- A R22 million increase due to a revised present closure obligation;
- Finance charges (unwind of discount) through the income statement resulted in
an increase of R26 million in the provision.
EARNINGS PER SHARE
31 December 31 December
2007 2006
R`000 R`000
Reconciliation of net profit for earnings
per share
Net profit attributable to equity holders 1 860 913 483 504
from continuing operations
Loss attributable to equity holders from - (16 158)
discontinued operations
Net profit attributable to ordinary 1 860 913 467 346
shareholders from basic and diluted
earnings per share
Reconciliation of weighted average number
of ordinary shares
Weighted average number of ordinary shares 48 337 36 188
for basic and diluted earnings per share
RECONCILIATION OF HEADLINE EARNINGS
Profit Taxation Profit
before and lease after
tax consideration tax
R`000 R`000 R`000
Year ended 31 December
2007
Profit per income 2 789 315 (928 402) 1 860 913
statement
Profit on disposal of (1 205) 393 (812)
property, plant and
equipment
Impairment reversal (1 690 156) 550 896 (1 139 260)
Headline profit 1 097 954 (377 113) 720 841
Year ended 31 December
2006
Profit per income 737 589 (270 243) 467 346
statement
Profit on disposal of (3 631) 1 183 (2 448)
property, plant and
equipment
Impairment charges - 23 969 (7 811) 16 158
ZBS
Headline profit 757 927 (276 871) 481 056
NET DEBT
Effective
interest rate Maturity 2007 2006
% R`000 R`000
Non-current
Senior term Libor+2,3%/Ji 31.12.10 141 049 583 954
facility bar+2,65%
Rio Tinto unsecured Libor+5% - 732 795
loan
Rio Tinto secured Libor+5% 52 769 164 006
loan
Finance lease Prime - 1,85% 08.08.09 - 8 715
193 818 1 489 470
Current
Senior Term Libor+2,3%/Ji 31.12.10 115 668 82 070
Facility bar+2,65%
Revolving credit Libor+2,3%/Ji 98 414 99 754
facility bar+2,65%
Finance lease Prime - 1,85% - 3 430
214 082 185 254
Total borrowings 407 900 1 674 724
Cash and cash (841 110) (670 336)
equivalents
Net debt (433 210) 1 004 388
Total equity 849 097 (247 554)
SHARE CAPITAL, SHARE PREMIUM AND OTHER RESERVES
Share Share Retained
capital premium earnings
R`000 R`000 R`000
Balance at 1 January 2006 29 562 36 724 102 500
Fair value on available for - - -
sale investments
Currency translation - - -
differences and other
Conversion of debentures 18 775 544 490 -
Net loss on cash flow hedges - - -
Hedge loss recycled to profit - - -
and loss
Tax on items directly taken to - - -
equity
Actuarial loss on defined - - -
benefit plans
Net profit for the year - - 467 346
Balance at 31 December 2006 48 337 581 214 569 846
Fair value on available for - - -
sale investments
Currency translation - - -
differences and other
Net loss on cash flow hedges - - -
Hedge loss recycled to profit - - -
and loss
Tax on items directly taken to - - -
equity
Actuarial loss on defined - - -
benefit plans
Net profit for the year - - 1 860 913
Balance at 31 December 2007 48 337 581 214 2 430 759
Other Total
R`000 R`000
Balance at 1 January 2006 (683 715) (514 929)
Fair value on available for 62 871 62 871
sale investments
Currency translation 22 928 22 928
differences and other
Conversion of debentures - 563 265
Net loss on cash flow hedges (2 664 895) (2 664 895)
Hedge loss recycled to profit 1 032 321 1 032 321
and loss
Tax on items directly taken to 796 440 796 440
equity
Actuarial loss on defined (12 901) (12 901)
benefit plans
Net profit for the year - 467 346
Balance at 31 December 2006 (1 446 951) (247 554)
Fair value on available for 36 480 36 480
sale investments
Currency translation (5 885) (5 885)
differences and other
Net loss on cash flow hedges (2 470 676) (2 470 676)
Hedge loss recycled to profit 1 319 825 1 319 825
and loss
Tax on items directly taken to 374 815 374 815
equity
Actuarial loss on defined (18 821) (18 821)
benefit plans
Net profit for the year - 1 860 913
Balance at 31 December 2007 (2 211 213) 849 097
HEDGE BOOK
Average Mark-to-
Maturity Quantity hedged Hedged market
price value oss
Year (t) ZAR/t R`000 R`000
2008 41 801 20 521 857 866 1 039 561
2009 22 265 15 739 350 426 645 021
2010 22 188 15 739 349 217 611 389
2011 21 825 15 739 343 499 565 397
2012 21 137 15 739 332 667 514 189
2013 16 330 15 739 256 997 228 766
Total 145 546 2 490 672 3 604 323
Less: Non- 2 564 762
Current portion
Current portion 1 039 561
SEGMENT REPORTING
Year ended 31 December 2007
Copper
Industrial By-
Copper minerals Products Total
R`000 R`000 R`000 R`000
Segment revenue - 3 920 511 313 882 623 736 4 858 129
continuing operations
Segment results - 2 515 511 55 027 276 476 2 847 014
continuing operation
Unallocated income 45 232
Profit from operation 2 892 246
before tax and finance
costs
Net finance costs (102 931)
Income tax expense (928 402)
Profit for the year 1 860 913
Year ended 31 December
2006
Segment revenue 3 255 727 355 755 370 397 3 981 879
Segment results - 1 016 680 28 151 164 703 1 209 534
continuing operation
Segment Rresults - (23 969) (23 969)
discontinued operations
Unallocated loss before (37 806)
tax and finance cost
Profit from operation 1 147 759
before tax and finance
costs
Net finance costs (410 170)
Income tax expense (270 243)
Profit for the year 467 346
GROUP SELECTED STATISTICS
2007 2006
Revenue
Copper (including hedge) R`million 3 921 3 256
By-products R`million 624 356
Vermiculite R`million 314 370
Net profit before tax R`million 2 789 738
Copper
Ore hoisted millions of 11,84 10,82
tonnes
Average copper grade % Cu 0,705 0,714
Copper in concentrates produced `000 of 65,7 59,7
tonnes
Cathode produced `000 of 91,7 81,2
tonnes
Average copper price realised USc/lb 332,6 316,5
LME copper price USc/lb 322,1 302,8
Average rand/dollar exchange R/US$ 7,05 6,77
rate
Average copper price realised R/tonne 51 706 47 237
Net cash cost R/tonne 15 952 16 863
Copper rod
Unit selling price pre hedge USc/lb 342,5 316,2
Unit selling price post hedge USc/lb 256,2 240,1
Sales tonnes 64 468 72 590
Cathode
Unit selling price pre hedge USc/lb 319,9 312,1
(local)
Unit selling price post hedge USc/lb 239,3 237,0
(local)
Sales (local) tonnes 13 148 6 695
Unit selling price pre hedge USc/lb 302 345
(export)
Unit selling price post hedge USc/lb 225,9 261,8
(export)
Sales (export) tonnes 15 230 1 701
Vermiculite
Vermiculite sold tonnes 181 254 181 422
Average vermiculite prices R/tonne 1 732 1 547
realised
Operational cash cost R/tonne 469,5 401,6
Magnetite
Magnetite sold tonnes 1 337 007 1 021 887
Average magnetite prices R/tonne 270 215
realised
Imported concentrate
Volumes Tonnes 19 322 16 625
copper
Cost R`million 920 753,6
Unit purchased price R/tonne of 46 860 45 328
copper
Marginal ore concentrate
Volumes Tonnes 3 039 8 765
copper
Cost R`million 71 259,3
Unit purchased price R/tonne of 32 141 29 579
copper
Costs
Production cost (excluding R`million 1 753,9 1 400,5
concentrate purchases)
Cost of sales R`million 2 996,8 2 362,1
Capital expenditure and
commitments
Capital expenditure R`million 181 144
Approved expenditure at end of R`million 303 194
each period
Contracts placed at end of each R`million 86 33
period
Investments
Fair value of unlisted R`million 312 276
investments
Share capital
Authorised ordinary shares of R`000 100 000 100 000
R1 each
Issued ordinary shares of R1 R`000 48 337 48 337
each
Net asset value per share R/share 17,57 (6,84)
Date: 04/02/2008 07:30:02 Produced by the JSE SENS Department.
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