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LON
LOLMI
LON - Lonmin Plc - Q1 2009 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")
Lonmin Q1 2009 Production Report and Interim Management Statement
29 January 2009
Plc ("Lonmin" or the "Company") today announces its production report and
Interim Management Statement for the quarter to 31 December 2008 (unaudited).
Our core underground mining operations at Marikana produced 2.7 million tonnes
during the first quarter of 2009, 8% ahead of the same period in 2008, an
encouraging indicator. As a result of management action, absenteeism levels
during the Christmas break was much improved on the prior year. Our safety
performance remains excellent, with a 20% improvement in LTIFR compared to the
2008 financial year. The re-calibration of Saffy shaft towards hybrid mining is
progressing in line with our initial plans. Our continuing focus on increasing
underground development at Marikana is beginning to show signs of improvement,
with current monthly haulage and reef development metres running ahead of
monthly averages over the past two years.
Total tonnes mined however were flat on the same period in 2008 at 3.1 million.
This was as a consequence of the previously announced winding down of our
opencast operations at Marikana, which were closed as planned on 31 December
2008. In addition, production from our Limpopo Baobab shaft was impacted by a 21
day strike and by disruption caused by the ongoing consultations relating to our
restructuring plans for this shaft.
The concentrators produced a total of 173,232 saleable ounces of Platinum in
concentrate for the quarter, a 9% decrease from the first quarter of 2008. This
decline was mainly a result of our tonnes mined broadly matching our tonnes
milled during the period, compared to the first quarter of 2008, when tonnes
milled materially exceeded tonnes mined. As a result, tonnes milled were down
10.6% on the same quarter last year. This arose from the milling of low grade
opencast stockpiles in the first quarter of 2008, but also as a result of
undertaking maintenance on some of our Marikana concentrators in the first
quarter of 2009, whilst the Number One furnace at our Smelter was down.
Overall head grade was up 2% at 4.48 g/t. However, underground head grade fell
6% to 4.46 g/t due to a number of factors, specifically an increased percentage
of development ore coming from Hossy and Saffy and unplanned dilution on the UG2
reef horizon, as well as a lack of flexibility in face availability on the
Merensky reef horizon. Management actions will address the latter two issues
over the coming months.
Refined production for the first quarter of 2009 was 132,935 ounces of Platinum
and 243,818 ounces of total PGMs, a decrease of 14% and 12% respectively from
the first quarter of 2008. This was primarily the result of an anticipated
build up in metals in process ahead of the Smelter during the planned rebuild of
the Number One furnace and the lower level of metals in concentrate produced,
referred to above. The re-design programme was successfully completed, with the
furnace tapping matte again on 13 January 2009. The Merensky furnace has now
been taken out of service and will be on care and maintenance. Both the Precious
Metal and Base Metal Refineries performed well during the quarter.
As we reported at our Final Results on 18 November 2008, we initiated
restructuring programmes during the quarter at our Marikana and Limpopo
operations, and we remain in consultation with our representative unions. An
update on these programmes will be given at our Interim Results on 11 May 2009.
The PGM pricing environment during the first quarter of the 2009 financial year
remained challenging and the short term outlook for PGM pricing continues to be
difficult to predict. However, we remain committed to our sales and cost
guidance for the 2009 financial year, which we gave at our Final Results on 18
November 2008.
Enquiries:
Investors / Analysts:
Rob Gurner Tel: +44 (0) 207 201 6050
Head of Investor Relations
Media:
Anthony Cardew / Rupert Pittman Tel: +44 (0) 207 930 0777
Cardew Group
3 months 3 months
to 31st to 31st
December December
2008 2007
Tonnes Marikana Underground - 000 2,304 2,174
mined conventional
Underground - 000 370 300
M&A1
Underground - 000 2,674 2,474
total
Opencast 000 216 369
Total 000 2,890 2,844
Limpopo Underground 000 87 138
Opencast 000 0 0
Total 000 87 138
Pandora Underground 000 34 34
attributable
2
Opencast 000 68 47
Total 000 103 81
Lonmin Underground 000 2,796 2,647
Platinum
Opencast 000 285 416
ERROR Total 000 3,080 3,063
Tonnes Marikana Underground 000 2,662 2,509
milled3
Opencast 000 116 563
Total 000 2,778 3,072
Limpopo Underground 000 92 129
Opencast 000 0 0
Total 000 92 129
Pandora4 Underground 000 80 80
Opencast 000 124 128
Total 000 205 209
Ore Underground 000 0 0
purchases5
Opencast 000 0 30
Total 000 0 30
Lonmin Underground 000 2,835 2,719
Platinum
Head grade6 g/t 4.46 4.76
Recovery rate7 % 80.2% 81.5%
Opencast 000 240 721
Head grade6 g/t 4.74 3.05
Recovery rate7 % 69.9% 57.5%
Total 000 3,075 3,440
Head grade6 g/t 4.48 4.40
Recovery rate7 % 79.4% 78.0%
3 months 3 months
to 31st to 31st
December December
2008 2007
Metals in Marikana Platinum oz 157,450 172,129
concentrate
8
Palladium oz 72,825 78,660
Gold oz 3,613 4,672
Rhodium oz 21,809 23,236
Ruthenium oz 33,836 35,851
Iridium oz 7,410 7,372
Total PGMs oz 296,944 321,920
Nickel9 MT 679 809
Copper9 MT 421 493
Limpopo Platinum oz 3,770 5,528
Palladium oz 3,331 3,874
Gold oz 243 407
Rhodium oz 487 537
Ruthenium oz 688 804
Iridium oz 159 158
Total PGMs oz 8,679 11,308
Nickel9 MT 76 108
Copper9 MT 54 73
Pandora4 Platinum oz 12,013 11,126
Palladium oz 5,406 5,074
Gold oz 93 84
Rhodium oz 1,657 1,516
Ruthenium oz 2,427 2,263
Iridium oz 456 376
Total PGMs oz 22,051 20,438
Nickel9 MT 12 15
Copper9 MT 7 6
Ore Platinum oz 0 832
purchases5
Palladium oz 0 934
Gold oz 0 88
Rhodium oz 0 58
Ruthenium oz 0 50
Iridium oz 0 15
Total PGMs oz 0 1,976
Nickel9 MT 0 12
Copper9 MT 0 9
Lonmin Platinum oz 173,232 189,615
Platinum
Palladium oz 81,563 88,542
Gold oz 3,949 5,250
Rhodium oz 23,953 25,347
Ruthenium oz 36,952 38,968
Iridium oz 8,025 7,921
Total PGMs oz 327,674 355,643
Nickel9 MT 767 943
Copper9 MT 481 581
3 months 3 months
to 31st to31st
December December
2008 2007
Metallurgy Lonmin Platinum oz 132,935 154,526
refined
Metal
Production
Palladium oz 60,756 62,185
Gold oz 3,496 3,521
Rhodium oz 18,749 21,258
Ruthenium oz 25,338 31,531
Iridium oz 2,544 5,292
Total PGMs oz 243,818 278,312
Toll Platinum oz 0 0
refined
Metal
production
Palladium oz 0 0
Gold oz 0 0
Rhodium oz 0 0
Ruthenium oz 0 0
Iridium oz 0 0
Total PGMs oz 0 0
Total Platinum oz 132,935 154,526
Refined
PGMs
Palladium oz 60,756 62,185
Gold oz 3,496 3,521
Rhodium oz 18,749 21,258
Ruthenium oz 25,338 31,531
Iridium oz 2,544 5,292
Total PGMs oz 243,818 278,312
Base metals Nickel10 MT 764 815
Copper10 MT 499 509
Sales Refined Platinum oz 126,202 143,855
Metal
Sales
Palladium oz 53,345 63,329
Gold oz 3,379 4,292
Rhodium oz 17,102 21,719
Ruthenium oz 25,668 32,567
Iridium oz 3,108 5,633
Total PGMs oz 228,805 271,394
Concentrate Platinum oz 0 1,756
and other11
Palladium oz 0 738
Gold oz 0 41
Rhodium oz 0 224
Ruthenium oz 0 362
Iridium oz 0 102
Total PGMs oz 0 3,224
Lonmin Platinum oz 126,202 145,611
Platinum
Palladium oz 53,345 64,067
Gold oz 3,379 4,333
Rhodium oz 17,102 21,943
Ruthenium oz 25,668 32,929
Iridium oz 3,108 5,735
Total PGMs oz 228,805 274,619
Nickel10 MT 676 802
Copper10 MT 403 429
3 months 3 months
to 31st to 31st
December December
2008 2007
Prices Average Platinum $/oz 882 1,425
Palladium $/oz 187 356
Gold $/oz 819 790
Rhodium $/oz 2,347 6,374
Ruthenium $/oz 248 487
Iridium $/oz 421 421
Basket price of $/oz 751 1,427
PGMs12
Nickel10 $/MT 15,143 29,221
Copper10 $/MT 4,950 5,966
Exchange R/$
Rates Average rate for period 9.93 6.78
Closing R/$
rate 9.45 6.85
Notes:
1 M&A comprises ore produced by our fully mechanised shafts and from
Saffy shaft, which is being transitioned to hybrid mining.
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 Metals in concentrate includes slag and have been calculated at
industry standard downstream processing losses.
9 Corresponds to contained base metals in
concentrate.
10 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.
11 Concentrate and other sales have been adjusted to a saleable ounces
basis using standard industry recovery rates.
12 Basket price of PGMs is based on the revenue generated from the
actual PGMs sold in the period.
Date: 29/01/2009 09:01:02 Produced by the JSE SENS Department.
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