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LON
LOLMI
LON - Lonmin Plc - Production report for the three months and six months to
31 March 2008 (unaudited)
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")
Lonmin today announces its production report for the three months and six
months to 31 March 2008 (unaudited).
Q2 Production
Metallurgical production for the second quarter was 128,124 ounces of
Platinum and 257,816 ounces of total PGMs with sales of 143,351 ounces of
Platinum and 282,659 ounces of PGMs. Second quarter metallurgical production
and sales were impacted by the planned Number 1 furnace inspection and repair
which was brought forward as a result of the Eskom power crisis. The work on
the Number 1 furnace was successfully completed and the furnace resumed full
production on 2 March 2008.
Total tonnes mined for the second quarter were 2.9 million, a decline of 16%
on the 3.4 million tonnes mined in the second quarter of the prior year. Our
mining operations were significantly affected by a combination of the four
day Eskom power outage at the end of January, a number of safety related
shutdowns as we continue our commitment to safe production and, as we
highlighted in our first quarter production report, by high levels of
absenteeism around both Christmas and Easter particularly among key skill
groups.
The Marikana mining operations mined a total of 2.4 million tonnes from
underground, a decline of 14% on the 2.8 million tonnes mined in the same
period last year. Conventional underground operations contributed 2.2 million
tonnes of ore in the quarter, a decrease of 19% on the 2.7 million tonnes
mined for the same period in 2007. These shafts were impacted by the issues
noted as well as an increased emphasis on accelerating ore reserve
development.
Mechanised production from Marikana was 0.25 million tonnes mined. While
this represented an increase of 80% on the same period last year it was
behind our aggressive ramp up schedule partly as a result of the slower than
anticipated implementation of continuous operations which still await
ministerial approval.
Our Limpopo operations produced 126,000 tonnes for the quarter, a decline of
34% on the prior year period. The focus at this operation remains on
development to build ore reserve flexibility.
H1 Production
Total refined production for the half was 282,650 ounces of Platinum
reflecting the lower level of throughput from the mines and a build up of
metal in process across the Process Division of around 70,000 saleable ounces
of Platinum partly as a result of the Number 1 furnace shutdown. It is
anticipated that this metal in process will be released during the second
half of the financial year.
Final metal sales for the half year were 288,963 ounces of Platinum and
557,276 ounces of total PGMs, slightly ahead of the same period in the 2007
financial year.
In the first six months of the year we mined a total of 6.0 million tonnes of
ore, a decline of 0.9 million tonnes or 13% on the same period last year.
Our Marikana operations contributed 5.5 million tonnes, a 12% decrease on the
first half of 2007 with underground operations contributing 4.9 million
tonnes. Underground production was impacted by the same issues that affected
the second quarter including safety related stoppages (including the loss of
seven shifts at our K3 and Rowland shafts in October following a fatal
accident), the Eskom four day power outage and high levels of absenteeism.
Underground milled head grade was 4.8% lower than the prior year at 4.72
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 3.18 grammes per tonne (5PGE+Au) as
we continued to mill more oxidised shallow material.
The concentrators produced a total of 346,892 saleable ounces of Platinum in
concentrate for the first half, a fall of 22% on the first half of the 2007
financial year mainly as a result of the lower throughput from the mines.
Overall recoveries improved slightly during the half year to 78.8% from 78.1%
for the first half of 2007. Underground recoveries remained flat at 81.5%
versus last year and the first quarter of the 2008 financial year. Our focus
on campaigning our opencast ore had a positive impact on opencast recoveries
which rose to 56.8% versus 56.0% last year.
2008 Sales Guidance
We estimate that Platinum sales for the financial year will be around the
current market consensus which is 775,000 ounces of Platinum. This guidance
is based on a steady improvement in the underlying performance of our mines
in the second half as the initiatives implemented by the new mining team gain
traction.
This guidance does take account of the current constraints in relation to
electricity supply but any deterioration of the current power supply
situation or any further significant safety stoppages are risks to this
target.
Enquiries:
Alex Shorland-Ball
+44 (0) 20 7201 6060
Vice President, Investor Relations & Communications
3 3 6 6
months months months months
to 31 to 31 to 31 to 31
March March March March
2007 2007
2008 2008
Tonnes Marikana Underground 000 2,174 2,686 4,349 5,344
mined conventional
Underground 000 252 140 552 236
M&A1
Underground 000 2,426 2,826 4,901 5,580
- total
Opencast 000 255 320 624 704
Total 000 2,681 3,146 5,525 6,284
Limpopo Underground 000 126 191 264 390
Opencast 000 0 0 0 0
Total 000 126 191 264 390
Pandora Underground 000 34 30 68 60
attributable
2
Opencast 000 54 76 101 150
Total 000 88 106 169 210
Lonmin Underground 000 2,586 3,047 5,233 6,030
Platinum
Opencast 000 309 396 725 854
Total 000 2,895 3,443 5,958 6,884
Tonnes Marikana Underground 000 2,335 2,791 4,844 5,581
milled3
Opencast 000 157 300 719 738
Total 000 2,491 3,091 5,563 6,319
Limpopo Underground 000 78 193 207 397
Opencast 000 0 0 0 0
Total 000 78 193 207 397
Pandora4 Underground 000 78 69 159 141
Opencast 000 64 149 192 336
Total 000 142 218 351 477
Ore Underground 000 0 52 0 72
purchases5 Opencast 000 0 0 30 0
Total 000 0 52 30 72
Lonmin Underground 000 2,491 3,105 5,210 6,191
Platinum
Head grade6 g/t 4.68 4.96 4.72 4.96
Recovery % 81.5% 81.2% 81.5% 81.5%
rate7
Opencast 000 220 449 941 1,074
Head grade6 g/t 3.62 4.14 3.18 4.34
Recovery % 54.6% 58.6% 56.8% 56.0%
rate7
Total 000 2,711 3,554 6,151 7,265
Head grade6 g/t 4.59 4.86 4.48 4.87
Recovery % 79.8% 78.8% 78.8% 78.1%
rate7
3 3 months 6 6 months
months to 31 months to 31
to 31 March to 31 March
March Restated March Restated
2008 8 2008 8
2007 2007
Metals Marikana Platinum oz 147,414 192,462 319,543 397,103
in
concentr
ate9
Palladiu oz 67,814 86,015 146,474 181,192
m
Gold oz 3,851 5,382 8,522 11,030
Rhodium oz 20,092 25,634 43,328 52,146
Rutheniu oz 30,828 40,204 66,680 83,954
m
Iridium oz 6,573 8,101 13,945 17,284
Total oz 276,572 357,798 598,492 742,710
PGMs
Nickel10 MT 685 923 1,493 1,916
Copper10 MT 413 553 906 1,155
Limpopo Platinum oz 3,061 8,413 8,589 18,759
Palladiu oz 2,618 5,882 6,493 13,083
m
Gold oz 213 645 620 1,448
Rhodium oz 357 895 894 1,955
Rutheniu oz 498 1,333 1,302 3,053
m
Iridium oz 116 303 274 722
Total oz 6,864 17,472 18,172 39,020
PGMs
Nickel10 MT 67 201 175 416
Copper10 MT 46 144 120 285
Pandora4 Platinum oz 6,698 12,138 17,824 25,600
Palladiu oz 3,075 5,767 8,148 11,997
m
Gold oz 50 107 133 226
Rhodium oz 962 1,829 2,478 3,707
Rutheniu oz 1,413 2,695 3,676 5,511
m
Iridium oz 239 580 615 1,198
Total oz 12,436 23,116 32,875 48,238
PGMs
Nickel10 MT 10 14 25 30
Copper10 MT 4 8 11 17
Ore Platinum oz 104 1,664 937 2,675
purchase Palladiu oz (141) 767 793 1,233
s5 m
Gold oz (13) 23 74 36
Rhodium oz 25 259 83 416
Rutheniu oz 57 417 107 670
m
Iridium oz 10 86 25 138
Total oz 42 3,214 2,019 5,167
PGMs
Nickel10 MT 4 11 16 16
Copper10 MT 2 6 11 8
Lonmin Platinum oz 157,277 214,677 346,892 444,136
Platinum
Palladiu oz 73,366 98,431 161,908 207,505
m
Gold oz 4,099 6,156 9,350 12,740
Rhodium oz 21,436 28,617 46,783 58,224
Rutheniu oz 32,796 44,649 71,765 93,189
m
Iridium oz 6,939 9,070 14,859 19,342
Total oz 295,913 401,600 651,556 835,136
PGMs
Nickel10 MT 767 1,149 1,709 2,378
Copper10 MT 466 710 1,047 1,466
3 3 6 6 months
months months months to 31
to 31 to 31 to 31 March
March March March 2007
2007
2008 2008
Metallurgy Lonmin Platinum oz 128,124 72,453 282,650 259,434
refined
Metal
Production
Palladium oz 65,956 35,517 128,140 116,581
Gold oz 6,042 2,021 9,563 7,555
Rhodium oz 21,179 9,385 42,437 31,019
Ruthenium oz 31,232 7,620 62,763 42,587
Iridium oz 5,284 6,204 10,577 12,838
Total oz 257,816 133,200 536,128 470,015
PGMs
Toll Platinum oz 0 20,049 0 23,872
refined
Metal
production
Palladium oz 0 9,098 0 10,862
Gold oz 0 0 0 0
Rhodium oz 0 2,859 0 3,447
Ruthenium oz 0 4,510 0 5,409
Iridium oz 0 885 0 1,063
Total oz 0 37,401 0 44,653
PGMs
Total Platinum oz 128,124 92,502 282,650 283,306
Refined
PGMs
Palladium oz 65,956 44,615 128,140 127,443
Gold oz 6,042 2,021 9,563 7,555
Rhodium oz 21,179 12,244 42,437 34,466
Ruthenium oz 31,232 12,130 62,763 47,996
Iridium oz 5,284 7,089 10,577 13,901
Total oz 257,816 170,601 536,128 514,668
PGMs
Base metals Nickel11 MT 508 615 1,323 1,604
Copper11 MT 286 215 795 826
Sales Refined Platinum oz 140,875 132,287 284,730 273,191
Metal
Sales
Palladium oz 70,662 66,533 133,990 124,884
Gold oz 4,916 2,045 9,208 7,560
Rhodium oz 21,818 19,430 43,537 37,170
Ruthenium oz 33,374 22,337 65,940 56,492
Iridium oz 6,088 4,879 11,720 13,981
Total oz 277,732 247,511 549,127 513,278
PGMs
Concentrate Platinum oz 2,477 58 4,233 1,249
and other12
Palladium oz 1,094 23 1,833 496
Gold oz 55 1,918 97 2,037
Rhodium oz 534 2 758 46
Ruthenium oz 627 5 990 90
Iridium oz 137 2 240 22
Total oz 4,926 2,008 8,150 3,940
PGMs
Lonmin Platinum oz 143,351 132,345 288,963 274,440
Platinum
Palladium oz 71,756 66,556 135,823 125,380
Gold oz 4,972 3,963 9,305 9,597
Rhodium oz 22,352 19,432 44,295 37,216
Ruthenium oz 34,001 22,342 66,930 56,582
Iridium oz 6,225 4,881 11,960 14,003
Total oz 282,659 249,519 557,276 517,218
PGMs
Nickel11 MT 413 1,166 1,216 2,232
Copper11 MT 376 322 805 774
3 3 6 6
months months months months
to 31 to 31 to 31 to 31
March March March March
2007 2007
2008 2008
Prices Average Platinum $/oz 1,734 1,138 1,578 1,103
Palladium $/oz 431 337 396 325
Gold $/oz 908 626 853 602
Rhodium $/oz 7,853 5,688 7,121 5,325
Ruthenium $/oz 407 483 446 305
Iridium $/oz 428 421 424 392
Basket $/oz 1,684 1,198 1,558 1,102
price of
PGMs13
Nickel11 $/MT 23,374 24,807 27,235 25,067
Copper11 $/MT 8,042 6,466 6,936 6,558
Exchange Average rate for R/$
Rates period 7.52 7.16 7.14 7.31
Closing R/$
rate 8.08 7.24 8.08 7.24
Notes:
1 M&A comprises ore produced by our ultra low profile mechanised
equipment.
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 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, which occured at one of our
concentrators during the 2007 financial year.
9 Metals in concentrate includes 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: 05/05/2008 12:04:01 Produced by the JSE SENS Department.
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