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LON
LOLMI
LON - Lonmin Plc - Full year production report 30 October 2008
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")
Full Year Production Report
30 October 2008
Lonmin today announces its production report for the three months and twelve
months to 30 September 2008 (unaudited) and provides sales guidance for the 2009
financial year.
Q4 Production
The performance of our mining operations continued to improve during the quarter
with the initiatives introduced to increase efficiency, reliability and
productivity showing positive momentum. The mining operations delivered total
tonnes mined of 3.3 million. This was an increase of 2.3% on the third quarter
of the 2008 financial year but a decline of 5.0% versus the same period in the
prior year. Production was impacted by a number of safety related shutdowns,
our focus on accelerating ore reserve development across the operations and the
slower than anticipated ramp up of our mechanised shafts. Underground
development rates at Marikana continued to increase during the quarter up 7.6%
on the third quarter of the year.
The concentrators produced a total of 200,314 saleable ounces of Platinum in
concentrate for the quarter. This was an increase of 8.3% on the third quarter
of 2008 but a reduction of 3.5% on the fourth quarter of the 2007 financial year
primarily as a result of the lower throughput from the mines.
Refined production for the fourth quarter was 228,942 ounces of Platinum and
425,791 ounces of total PGMs. This was an increase of 21.6% and 15.2%
respectively on the third quarter of 2008 but a decrease of 15.6% and 17.0%
respectively versus the fourth quarter of 2007. Sales for the period were
257,685 ounces of Platinum and 498,208 ounces of total PGMs.
2008 Production
Final sales for the year were, in line with our 6 August 2008 guidance, 726,918
ounces of Platinum and 1,401,371 ounces of total PGMs.
In total we mined 12.4 million tonnes of ore in the 2008 financial year, a
reduction of 10.9% on the prior year. Our Marikana operations contributed 11.5
million tonnes, a 10% decrease on the same period in 2007 with underground
operations contributing 10.2 million tonnes. As previously reported,
underground production was principally impacted by safety related stoppages, the
Eskom four day power outage in January, our focus on accelerating ore reserve
development and high levels of absenteeism particularly in the first half of the
financial year. Another key factor was the slower than anticipated ramp up of
our mechanised shafts with our mechanised operations producing 1.2 million
tonnes in the year, significantly behind our plans but a substantial increase on
the 0.6 million tonnes produced by these shafts in the prior year.
As planned, opencast tonnages were down year on year with total tonnes mined in
2008 of 1.3 million tonnes versus 1.6 million tonnes in 2007.
Underground milled head grade was 4.66 grammes per tonne (5PGE+Au), 4.5% lower
than the prior year partly as a result of ore mix issues including the increased
percentage of lower grade development ore from the Marikana mechanised shafts.
The concentrators produced a total of 732,125 saleable ounces of Platinum in
concentrate for the year down 15.8% on 2007 reflecting the lower levels of
throughput from the mines and lower opencast grades. The improvement programmes
we have introduced in the concentrators during the year showed encouraging
results with overall recoveries improving to 79.2% from 77.3% in 2007 and
underground recoveries up to 81.7% versus 80.7% last year.
Our Smelting operations are performing well and plans are in place for the
shutdown of the Number One furnace on 1 November 2008. This planned shutdown
will allow us to implement design changes to allow for longer operational
campaigns and will mean the Number One furnace is offline until early January.
2009 Guidance
The longer term fundamentals of Platinum and the other PGMs remain robust but
PGM prices have decreased substantially over recent weeks and the short term
outlook is more challenging. As previously announced, we are currently
completing a review of our operations focused on improving performance and
maximising value for Lonmin shareholders with our emphasis being on achieving
low cost production rather than maximising volume.
We are targeting Platinum sales for the 2009 financial year broadly in line with
that achieved in the 2008 financial year. We will update the market at our
final results on 18 November 2008.
Enquiries:
Alex Shorland-Ball +44 (0) 20 7201 6060
Vice President, Investor Relations & Communications
3 3 12 12
months months months months
to to to to 30
30 30 30 Septem
Septem Septem Septem ber
ber ber ber
2008 2007 2008 2007
Tonnes Marikana Underground - 00 2,436 2,536 9,076 10,574
mined conventional 0
Underground - 00 294 216 1,150 638
M&A1 0
Underground - 00 2,729 2,751 10,226 11,212
total 0
Opencast 00 306 421 1,300 1,596
0
Total 00 3,035 3,172 11,526 12,808
0
Limpopo Underground 00 122 193 523 757
0
Opencast 00 0 0 0 0
0
Total 00 122 193 523 757
0
Pandora Underground 00 29 36 124 128
attributa 0
ble2
Opencast 00 97 53 275 286
0
Total 00 126 89 400 414
0
Lonmin Underground 00 2,880 2,980 10,875 12,096
Platinum 0
Opencast 00 403 474 1,575 1,883
0
ERROR Total 00 3,283 3,454 12,449 13,979
0
Tonnes Marikana Underground 00 2,739 2,801 10,206 11,216
milled3 0
Opencast 00 246 391 1,163 1,469
0
Total 00 2,985 3,192 11,369 12,685
0
Limpopo Underground 00 129 186 534 781
0
Opencast 00 0 0 0 0
0
Total 00 129 186 534 781
0
Pandora4 Underground 00 68 85 293 301
0
Opencast 00 256 119 595 649
0
Total 00 324 204 888 950
0
Ore Underground 00 0 0 0 0
purchases 0
5
Opencast 00 0 0 30 20
0
Total 00 0 0 30 95
0
Lonmin Underground 00 2,936 3,072 11,033 12,373
Platinum 0
Head grade6 g/ 4.66 4.64 4.66 4.88
t
Recovery rate7 % 81.4% 80.5% 81.7% 80.7%
Opencast 00 502 510 1,788 2,138
0
Head grade6 g/ 4.19 4.06 3.70 4.39
t
Recovery rate7 % 63.7% 55.9% 59.4% 55.4%
Total 00 3,438 3,582 12,821 14,511
0
Head grade6 g/ 4.59 4.55 4.52 4.80
t
Recovery rate7 % 79.1% 77.3% 79.2% 77.3%
3 3 12 12
months months months months
to 30 to 30 to 30 to 30
Septem Septem Septem Septem
ber ber ber ber
Restat Restat
ed8 ed8
2008 2007 2008 2007
Metals Marikana Platinum oz 175,13 188,19 660,42 778,04
in 0 4 9 9
concentr
ate9
Palladium oz 80,757 84,859 303,53 354,03
0 7
Gold oz 4,468 5,180 17,221 21,578
Rhodium oz 24,082 25,251 90,096 102,90
6
Ruthenium oz 37,242 40,635 139,15 164,82
8 6
Iridium oz 8,005 11,688 29,654 37,317
Total PGMs oz 329,68 355,80 1,240, 1,458,
4 7 088 713
Nickel10 MT 799 927 3,065 3,802
Copper10 MT 502 548 1,882 2,259
Limpopo Platinum oz 5,834 8,195 22,017 35,567
Palladium oz 3,627 5,483 16,477 24,351
Gold oz 186 714 1,265 2,945
Rhodium oz 775 814 2,660 3,723
Ruthenium oz 1,400 1,200 4,128 5,769
Iridium oz (468) 195 121 1,245
Total PGMs oz 11,353 16,601 46,667 73,600
Nickel10 MT 93 156 414 752
Copper10 MT 68 109 296 513
Pandora4 Platinum oz 19,350 11,080 48,743 52,479
Palladium oz 7,897 5,197 21,282 24,417
Gold oz 142 93 371 461
Rhodium oz 2,274 1,622 6,334 7,439
Ruthenium oz 3,388 2,399 9,379 10,922
Iridium oz 726 522 1,762 2,415
Total PGMs oz 33,777 20,913 87,872 98,132
Nickel10 MT 15 13 53 61
Copper10 MT 9 7 27 32
Ore Platinum oz 0 44 937 3,737
purchases
5
Palladium oz 0 21 793 1,730
Gold oz 0 0 74 46
Rhodium oz 0 7 83 533
Ruthenium oz 0 11 107 809
Iridium oz 0 2 25 180
Total PGMs oz 0 85 2,019 7,035
Nickel10 MT 0 3 16 21
Copper10 MT 0 1 11 10
Lonmin Platinum oz 200,31 207,51 732,12 869,83
Platinum 4 3 5 2
Palladium oz 92,281 95,560 342,08 404,53
1 5
Gold oz 4,796 5,987 18,932 25,030
Rhodium oz 27,131 27,694 99,173 114,60
1
Ruthenium oz 42,030 44,245 152,77 182,32
2 6
Iridium oz 8,263 12,407 31,562 41,157
Total PGMs oz 374,81 393,40 1,376, 1,637,
5 6 645 481
Nickel10 MT 908 1,099 3,549 4,636
Copper10 MT 578 665 2,216 2,814
3 3 12 12
months months months months
to 30 to 30 to 30 to 30
Septem Septem Septem Septem
ber ber ber ber
2008 2007 2008 2007
Metallur Lonmin Platinum oz 228,94 262,28 699,94 695,84
gy14 refined 2 0 2 2
Metal
Production
Palladium oz 110,19 124,77 330,20 318,75
8 4 9 8
Gold oz 5,481 7,210 20,257 20,485
Rhodium oz 22,694 35,478 91,063 88,469
Ruthenium oz 49,122 52,430 158,42 135,87
4 3
Iridium oz 9,353 10,897 31,599 30,430
Total PGMs oz 425,79 493,06 1,331, 1,289,
1 9 493 857
Toll Platinum oz 0 8,827 0 93,609
refined
Metal
production
Palladium oz 0 7,617 0 43,274
Gold oz 0 0 0 0
Rhodium oz 0 1,481 0 12,966
Ruthenium oz 0 1,698 0 20,439
Iridium oz 0 389 0 4,090
Total PGMs oz 0 20,012 0 174,37
8
Total Platinum oz 228,94 271,10 699,94 789,45
Refined 2 7 2 1
PGMs
Palladium oz 110,19 132,39 330,20 362,03
8 1 9 2
Gold oz 5,481 7,210 20,257 20,485
Rhodium oz 22,694 36,959 91,063 101,43
5
Ruthenium oz 49,122 54,128 158,42 156,31
4 2
Iridium oz 9,353 11,286 31,599 34,520
Total PGMs oz 425,79 513,08 1,331, 1,464,
1 1 493 235
Base metals Nickel11 MT 1,224 1,417 3,483 4,522
Copper11 MT 648 885 2,009 2,466
Sales Refined Platinum oz 241,95 311,26 706,49 786,55
Metal 9 5 2 2
Sales
Palladium oz 112,69 153,75 329,46 362,07
4 7 0 7
Gold oz 5,715 9,570 20,151 24,449
Rhodium oz 27,255 36,656 93,337 102,91
6
Ruthenium oz 47,832 59,677 158,47 162,85
7 3
Iridium oz 10,475 12,321 32,140 37,858
Total PGMs oz 445,93 583,24 1,340, 1,476,
1 6 057 705
Concentrate Platinum oz 15,725 4,680 20,425 7,032
and other12
and 14
Palladium oz 9,867 2,123 11,888 3,232
Gold oz 11 76 117 201
Rhodium oz 60 806 889 1,008
Ruthenium oz 25,095 1,594 26,205 1,942
Iridium oz 1,519 0 1,789 64
Total PGMs oz 52,277 9,279 61,313 13,479
Lonmin Platinum oz 257,68 315,94 726,91 793,58
Platinum 5 5 8 4
Palladium oz 122,56 155,88 341,34 365,30
1 0 8 9
Gold oz 5,725 9,646 20,268 24,650
Rhodium oz 27,315 37,462 94,227 103,92
4
Ruthenium oz 72,928 61,271 184,68 164,79
2 5
Iridium oz 11,994 12,321 33,929 37,922
Total PGMs oz 498,20 592,52 1,401, 1,490,
8 5 371 184
Nickel11 MT 1,157 2,211 3,338 5,308
Copper11 MT 627 1,075 1,978 2,474
3 3 12 12
months months months months
to 30 to 30 to 30 to 30
Septem Septem Septem Septem
ber ber ber ber
2008 2007 2008 2007
Prices Average Platinum $/ 1,505 1,275 1,655 1,213
oz
Palladium $/ 303 338 372 339
oz
Gold $/ 877 682 867 647
oz
Rhodium $/ 6,976 5,981 7,614 5,757
oz
Ruthenium $/ 263 377 340 404
oz
Iridium $/ 412 402 414 402
oz
Basket price $/ 1,351 1,205 1,529 1,196
of PGMs13 oz
Nickel11 $/ 16,710 24,718 22,556 26,461
MT
Copper11 $/ 6,885 7,087 7,212 6,971
MT
Exchange Average rate for period R/ 7.81 7.04 7.45 7.14
Rates $
Closing R/ 8.27 6.83 8.27 6.83
rate $
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 first, second and third
quarters of the 2007 financial 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, second quarter metals in concentrate produced by 5,498
ounces of Platinum and 10,863 ounces of total PGMs and the third
quarter metals in concentrate produced by 296 ounces of Platinum and
604 ounces of PGMs.
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.
14 During the fourth quarter of 2008 financial year, 25,000 oz of refined
Ruthenium and 1,500 oz of refined Iridium were bought and sold to meet
contractual commitments. The metallurgy section of the above table
excludes these transactions as they relate to third party mined and
processed metals but they are included in the sales section.
Date: 30/10/2008 09:00:01 Produced by the JSE SENS Department.
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