| Thu 23 Apr 2009, 8:12 | | LON - Lonmin Plc - Second Quarter and First Half 2009 |
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LON
LOLMI
LON - Lonmin Plc - Second Quarter and First Half 2009
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")
23 April 2009
Lonmin Plc
Second Quarter and First Half 2009
Production Report
Lonmin Plc, ("Lonmin" or "the company"), the world`s third largest Platinum
producer, today announces its production report for the three months and six
months to 31 March 2009 (unaudited).
Q209 Production
Total tonnes mined for the second quarter of the 2009 financial year were 2.7
million, an 8% decline year-on-year. This was due to the planned closures of
our Marikana opencast operations and our Baobab shaft at Limpopo.
Our underground Marikana mining operations produced 2.6 million tonnes during
the second quarter of the 2009 financial year, a 7% increase from the same
period last year, when production was impacted by the Eskom power outage in
January 2008. The increase in production from the prior year period was
supported by an improved performance from our conventional operations, which
was achieved despite the disruption caused by the significant restructuring
programme being carried out during the period. Production at Saffy and Hossy
shafts continued to ramp up, whilst underground ore reserve development at
Marikana continued to improve.
Our safety performance remained strong, with LTIFR at the end of 31 March 2009
improving 6% from the 2008 financial year. However, we regrettably suffered
two fatalities during the quarter.
Total tonnes milled in the quarter increased 2% year-on-year to 2.8 million
tonnes, reflecting increased production from Marikana and Pandora underground
mining operations, and exceeded total tonnes mined, due to the milling of some
opencast stock piles in the period. The remainder of these opencast stock
piles and the further opencast tonnes from Pandora will be processed during
the second half of the 2009 financial year.
The concentrators produced 164,909 saleable ounces of Platinum in concentrate
for the quarter, a 5% increase from the second quarter in the 2008 financial
year, reflecting increased production from underground Marikana operations and
Pandora. Underground and overall concentrator recoveries improved to 81.4% and
80.6% respectively from the first quarter of the 2009 financial year, when
underground and overall recoveries were 80.2% and 79.4% respectively.
Overall milled head grade was up 2% year-on-year to 4.68 grammes per tonne
(5PGE+Au), whilst underground milled head grade increased marginally to 4.69
grammes per tonne (5PGE+Au). Encouragingly, underground head grade improved 5%
from the first quarter of the 2009 financial year, reflecting in part the
impact of management actions taken to tackle the unplanned dilution identified
in the first quarter of 2009.
Refined production for the second quarter was 185,284 ounces of Platinum and
362,326 ounces of total PGMs, an increase of 45% and 41% respectively from the
second quarter of the 2008 financial year. Metal sales during the second
quarter of the 2009 financial year were 185,651 ounces of Platinum and 355,069
ounces of PGMs, increases of 30% and 26% respectively from the prior year
period. This growth in refined production and sales partly reflected the
improved contribution from our Marikana underground operations. Furthermore,
the Process Division delivered an excellent performance during the second
quarter and, ahead of our expectations, it processed the vast majority of the
inventory built up during the planned re-build of the Number One furnace which
tapped matte on 13 January 2009. Refined production and sales in the prior
year period were more significantly impacted by a planned inspection and
repair of the Number One furnace, following the Eskom power outage, which
caused a build up of metal in process at that time.
H109 Production
Total tonnes mined during the first half of the 2009 financial year were 5.8
million tonnes, a 3% decline from 2008. This was due to the planned cessation
of production at our Marikana opencast operations at the end of the first
quarter of the 2009 financial year and production at our Baobab shaft at
Limpopo being impacted by the winding down of the operation towards care and
maintenance, as well as a 21 day wage related strike at Limpopo in the first
quarter of the 2009 financial year.
In the first six months of the 2009 financial year we mined a total of 5.3
million tonnes of ore from our core underground Marikana operations, an
increase of 7% on the same period last year. This was due to an improved
performance from our conventional sections with production rising in both the
first and second quarters of the 2009 financial year from the same periods in
2008. Production from Saffy and Hossy shafts also increased during the first
half of the 2009 financial year, from 2008.
The concentrators produced a total of 338,142 saleable ounces of Platinum in
concentrate in the first half of the 2009 financial year, a 3% year-on-year
decline, mainly as a result of the planned operational changes at our Marikana
opencast and Limpopo operations, as mentioned above. Overall concentrator
recoveries improved during the first half of the 2009 financial year to 80.0%
from 78.8% in the first half of 2008, partly due to reduced levels of low
grade opencast stock piles being processed during the first half of the 2009
financial year compared to the prior year period. However, during the first
half of the 2009 financial year, underground recoveries fell to 80.8%, from
81.5% in the first half of the 2008 financial year, partly as a result of
undertaking extensive maintenance on some of our Marikana concentrators in the
first quarter of the 2009 financial year.
Overall milled head grade improved 2% year-on-year to 4.58 grammes per tonne
(5PGE+Au), mainly due to higher levels of low grade opencast stock piles
processed during the first half of the 2008 financial year which had an
adverse impact on grade at that time. Underground milled head grade was 3%
lower year-on-year at 4.57 grammes per tonne (5PGE+Au) as a result of 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, where some localised lower
grade areas were encountered, particularly during the first quarter. However,
management actions initiated to tackle the latter two issues have already
started to have a positive impact, as evidenced by the sequential improvement
in underground head grade delivered in the second quarter of the 2009
financial year.
Total refined production for the first half of the 2009 financial year was
318,219 ounces of Platinum and 606,145 of total PGMs, both up 13% from the
same period in 2008, partly reflecting the improvement from our core Marikana
underground operations during the first half of the 2009 financial year. In
addition, refined production during the first half of the 2008 financial year
was adversely impacted by a build up of metal in process, partly due to the
planned inspection and repair of the Number One furnace, following the Eskom
power outage in January 2008.
During the first half of the 2009 financial year, our Process Division
delivered an excellent performance and processed the vast majority of the
inventory built up during the planned re-build of the Number One furnace in
the first quarter. Final metal sales for the first half of the 2009 financial
year were 311,853 ounces of Platinum and 583,873 ounces of total PGMs, up 8%
and 5% respectively on the same period in 2008.
2009 Sales Guidance
We maintain our sales guidance for the 2009 financial year of around 700,000
Platinum ounces.
Platinum sales in the first half of the 2009 financial year were around 45% of
the full year Platinum sales target for our core Marikana operations, which we
first published in November 2008, and this was ahead of our initial
expectations for the period. The key driver of this was the performance of the
Process Division, where metal in process inventory was drawn down faster than
had been expected following the Number One furnace re-build during the first
quarter of the 2009 financial year.
For the second half of the 2009 financial year, management will be focused on
minimising the possible disruption resulting from the execution of our
significant restructuring programme, particularly as crews are redeployed
around the Marikana property, and the closure of a small uneconomic decline
shaft and a further five uneconomic half levels at Marikana as part of this
restructuring programme. In addition, the continuing ramp up of Saffy shaft is
a key area of focus. It is anticipated that any impact of these factors on
production and sales will be compensated for by the normalising of metal in
process inventory from the Process Division.
Update on restructuring
Further to our announcement on 24 February 2009, we have now essentially
completed a major restructuring exercise at our Marikana and Limpopo
operations. Further details, including expected annual cost savings and one-
off costs, will be disclosed at our Interim Results on 11 May 2009.
Debt re-financing
We have completed a $575m debt re-financing package, comprising a $250m
revolving credit facility and a $150m amortising term loan both maturing in
November 2012 in the UK and a $175m revolving credit facility in South Africa,
maturing in November 2010. This re-financing significantly lengthens the
tenure of the company`s banking facilities.
ENQUIRIES:
Investors / Analysts:
Rob Gurner +44 (0) 207 201 6050
Head of Investor Relations
Media:
Cardew Group +44 (0) 207 930 0777
Anthony Cardew / Rupert Pittman
Financial Dynamics +27 (0) 21 487 9000
Dani Cohen / Ravin Maharaj
3 3 6 months 6
months months to months
to to 31st to
31st 31st March 31st
March March March
2009 2008 2009 2008
Tonnes Marikana Undergrou 000 2,184 2,174 4,487 4,349
mined nd -
conventio
nal
Undergrou 000 400 252 771 552
nd - M&A1
Undergrou 000 2,584 2,426 5,258 4,901
nd -
total
Opencast 000 13 255 229 624
Total 000 2,598 2,681 5,488 5,525
Limpopo Undergrou 000 0 126 87 264
nd
Opencast 000 0 0 0 0
Total 000 0 126 87 264
Pandora Undergrou 000 37 34 71 68
attri nd
butable2
Opencast 000 41 54 110 101
Total 000 78 88 181 169
Lonmin Undergrou 000 2,621 2,586 5,417 5,233
Platinum nd
Opencast 000 55 309 339 725
ERROR Total 000 2,676 2,895 5,756 5,958
Tonnes Marikana Undergrou 000 2,462 2,335 5,124 4,844
milled3 nd
Opencast 000 78 157 194 719
Total 000 2,540 2,491 5,319 5,563
Limpopo Undergrou 000 0 78 92 207
nd
Opencast 000 0 0 0 0
Total 000 0 78 92 207
Pandora4 Undergrou 000 88 78 168 159
nd
Opencast 000 126 64 251 192
Total 000 214 142 419 351
Ore Undergrou 000 0 0 0 0
purchases5 nd
Opencast 000 0 0 0 30
Total 000 0 0 0 30
Lonmin Undergrou 000 2,550 2,491 5,384 5,210
Platinum nd
Head g/t 4.69 4.68 4.57 4.72
grade6
Recovery % 81.4% 81.5% 80.8% 81.5%
rate7
Opencast 000 205 221 445 941
Head g/t 4.61 3.62 4.68 3.18
grade6
Recovery % 71.3% 54.6% 70.6% 56.8%
rate7
Total 000 2,754 2,711 5,829 6,151
Head g/t 4.68 4.59 4.58 4.48
grade6
Recovery % 80.6% 79.8% 80.0% 78.8%
rate7
3 3 6 6
months months months months
to 31st to 31st to 31st to 31st
March March March March
2009 2008 2009 2008
Metals in Marikana Platinum oz 151,168 147,414 308,617 319,543
concentrate
8
Palladium oz 70,285 67,814 143,110 146,474
Gold oz 3,444 3,851 7,057 8,522
Rhodium oz 21,191 20,092 43,000 43,328
Ruthenium oz 32,617 30,828 66,454 66,680
Iridium oz 7,110 6,573 14,520 13,945
Total oz 285,815 276,572 582,759 598,492
PGMs
Nickel9 MT 642 685 1,321 1,493
Copper9 MT 405 413 825 906
Limpopo Platinum oz 0 3,062 3,770 8,589
Palladium oz 0 2,618 3,331 6,493
Gold oz 0 213 243 620
Rhodium oz 0 357 487 894
Ruthenium oz 0 498 688 1,302
Iridium oz 0 116 159 274
Total oz 0 6,864 8,679 18,172
PGMs
Nickel9 MT 0 67 76 175
Copper9 MT 0 46 54 120
Pandora4 Platinum oz 13,742 6,698 25,754 17,825
Palladium oz 6,194 3,075 11,601 8,148
Gold oz 110 50 202 133
Rhodium oz 1,909 962 3,566 2,478
Ruthenium oz 2,789 1,413 5,216 3,676
Iridium oz 515 239 971 615
Total oz 25,259 12,436 47,310 32,875
PGMs
Nickel9 MT 13 10 25 25
Copper9 MT 8 4 15 11
Ore Platinum oz 0 104 0 937
purchases5 Palladium oz 0 (141) 0 793
Gold oz 0 (13) 0 74
Rhodium oz 0 25 0 83
Ruthenium oz 0 57 0 107
Iridium oz 0 10 0 25
Total oz 0 42 0 2,019
PGMs
Nickel9 MT 0 4 0 16
Copper9 MT 0 2 0 11
Lonmin Platinum oz 164,909 157,277 338,142 346,894
Platinum
Palladium oz 76,479 73,366 158,042 161,908
Gold oz 3,554 4,101 7,503 9,349
Rhodium oz 23,100 21,436 47,053 46,783
Ruthenium oz 35,406 32,796 72,358 71,765
Iridium oz 7,625 6,938 15,649 14,859
Total oz 311,074 295,914 638,748 651,558
PGMs
Nickel9 MT 655 766 1,422 1,709
Copper9 MT 412 465 894 1,048
3 3 6 6
months months months months
to 31st to 31st to 31st to 31st
March March March March
2009 2008 2009 2008
Metallurgy Lonmin Platinum oz 184,969 128,124 317,904 282,650
refined
metal
production
Palladium oz 86,637 65,956 147,393 128,140
Gold oz 5,151 6,042 8,647 9,563
Rhodium oz 25,939 21,179 44,688 42,437
Ruthenium oz 47,614 31,232 72,952 62,763
Iridium oz 9,935 5,284 12,479 10,577
Total oz 360,245 257,816 604,063 536,128
PGMs
Toll Platinum oz 315 0 315 0
refined
metal
production
Palladium oz 0 0 0 0
Gold oz 0 0 0 0
Rhodium oz 573 0 573 0
Ruthenium oz 1,009 0 1,009 0
Iridium oz 184 0 184 0
Total oz 2,081 0 2,081 0
PGMs
Total Platinum oz 185,284 128,124 318,219 282,650
refined
PGMs
Palladium oz 86,637 65,956 147,393 128,140
Gold oz 5,151 6,042 8,647 9,563
Rhodium oz 26,512 21,179 45,261 42,437
Ruthenium oz 48,623 31,232 73,961 62,763
Iridium oz 10,119 5,284 12,663 10,577
Total oz 362,326 257,816 606,145 536,128
PGMs
Base Nickel10 MT 869 508 1,632 1,323
metals Copper10 MT 579 286 1,079 795
Sales Refined Platinum oz 187,250 140,875 313,671 284,731
metal
sales
Palladium oz 92,439 70,662 147,184 133,991
Gold oz 5,940 4,916 9,318 9,208
Rhodium oz 21,636 21,818 38,739 43,537
Ruthenium oz 41,833 33,374 67,501 65,941
Iridium oz 9,392 6,088 12,500 11,720
Total oz 358,490 277,732 588,913 549,127
PGMs
Concentrate Platinum oz (1,600) 2,478 (1,818) 4,233
and other11
Palladium oz (1,822) 1,095 (3,222) 1,833
Gold oz 0 55 0 97
Rhodium oz 0 534 0 758
Ruthenium oz 0 628 0 990
Iridium oz 0 137 0 240
Total oz (3,421) 4,926 (5,039) 8,150
PGMs
Lonmin Platinum oz 185,651 143,352 311,853 288,963
Platinum
Palladium oz 90,617 71,756 143,962 135,823
Gold oz 5,940 4,971 9,318 9,305
Rhodium oz 21,636 22,352 38,739 44,295
Ruthenium oz 41,833 34,002 67,501 66,931
Iridium oz 9,392 6,225 12,500 11,960
Total oz 355,069 282,658 583,873 557,277
PGMs
Nickel10 MT 693 413 1,368 1,216
Copper10 MT 503 376 907 805
3 3 6 6
months months months months
to 31st to 31st to 31st to 31st
March March March March
2009 2008 2009 2008
Prices Average Platinum $/o 991 1,734 947 1,578
z
Palladium $/o 195 431 192 396
z
Gold $/o 901 908 871 853
z
Rhodium $/o 1,099 7,853 1,650 7,121
z
Ruthenium $/o 47 407 124 446
z
Iridium $/o 384 428 393 424
z
Basket $/o 666 1,684 699 1,558
price of z
PGMs12
Nickel10 $/M 16,285 23,374 15,721 27,235
T
Copper10 $/M 6,953 8,042 6,062 6,936
T
Exchange Average rate for R/$ 9.90 7.52 9.91 7.14
Rates period
Closing rate R/$ 9.49 8.08 9.49 8.08
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: 23/04/2009 08:12:01 Produced by the JSE SENS Department.
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