| Thu 17 Dec 2009, 10:09 | | MTX - Metorex Limited - Ruashi Operational and Hedging update |
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MTX
MEMTX
MTX - Metorex Limited - Ruashi Operational and Hedging update
METOREX LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1934/005478/06)
Share code: MTX
ISIN: ZAE000022745
Issuer code: MEMTX
("Metorex")
Ruashi Operational and Hedging update
Metorex, a focused base metals mining group, listed on the JSE Limited, wishes
to inform shareholders and update the market on Ruashi Mining SPRL`s performance
during November 2009 and on changes made to hedging positions.
Chief Executive Officer Terence Goodlace said; "The Ruashi mine produced 2,491
tons of copper and 258 tons of cobalt for the month of November 2009 and
tonnages processed through the SX/EW plant improved to 93 per cent of design
capacity. The Ruashi hedging profile for the period July 2010 to June 2011 has
been improved through the closing out all the forward sales contracts and put
option structures. These hedges have been replaced with a forward sales
structure at a considerably higher copper price of around US$6,000 per ton of
copper, net of costs. Importantly, the cost of closing out these old hedges has
been absorbed by the new hedge and there has been no cash outflow to Metorex.
This restructuring reduces Ruashi debt repayment risk in financial 2011 and
allows Metorex to take advantage of much higher copper pricing."
Table 1 - Salient Production Features at Ruashi
Units June September October November 2009
2009 2009 2009 month
quarter quarter month
Waste Mined Tons 1,369,295 1,690,647 828,688 532,884
Ore Mined Tons 247,344 430,720 169,171 76,156
Processed Tons 229,820 303,786 107,247 112,093
Processed % Cu 2.69% 2.76% 2.87% 2.67%
Processed % Co 0.49% 0.57% 0.45% 0.46%
Copper Tons 5,245 5,690 2,512 2,491
Produced
Cobalt Tons 568 666 274 258
Produced
Copper production at Ruashi decreased marginally to 2,491 tons for the month of
November 2009 when compared to the October 2009 performance. Waste tonnage
mined decreased to 532,884 tons and ore mined decreased to 76,156 tons. The
October 2009 monthly production figures were elevated to create buffer
stockpiles ahead of the rainy season. Stockpiles are needed to supplement plant
feed during the rainy season which lasts from November to March each year. The
average blended copper head grade for November 2009 was 2.7 per cent and the
blended cobalt head grade was 0.5 per cent. Cobalt production decreased by 6
per cent to 258 tons for the month of November 2009.
Ruashi copper hedge book
Shareholders are hereby notified of the restructuring of the Ruashi hedge book
entered into during December 2008 as part of the Metorex debt restructuring
programme and as detailed in the SENS announcement to Metorex shareholders dated
12 December 2008.
The following Ruashi forward sales contracts have been closed out:
- 5,275 tons of copper at a strike price of US$3,900 per ton for delivery
during the period July 2010 to September 2010.
The fully paid up put options (34,425 tons of copper at a price of US$3,900 per
ton) entered into for the period October 2010 until June 2012 have also been
closed out.
Furthermore, Ruashi has entered into further forward sales contracts as follows:
- 16,200 tons of copper at a strike price of US$5,972 per ton for delivery
during the period July 2010 to June 2011. The new forward price is net of
costs incurred in the closing out of current forward sales contracts and
the put options post June 2010.
The resultant summary of the overall hedging position is now as follows:
- 13,050 tons of copper at a strike price of US$3,900 per ton for delivery
during the period December 2009 to June 2010; and
- 16,200 tons of copper at strike price of US$5,972 per ton for delivery
during the period July 2010 to June 2011.
The outcome of this hedge book restructuring serves to close out a portion of
the hedge book entered into during the low commodity price cycle and it
furthermore secures higher forward prices for Ruashi`s copper production during
the 2011 financial year. The closing out of these hedges have not resulted in
any cash outflow to Metorex.
Johannesburg
17 December 2009
For further enquiries please contact:
Metorex CEO, Terence Goodlace Tel: 011 880 3155
CFO, Maritz Smith
College Hill Jacques de Bie/Hayley Crane Tel: 011 447 3030
Sponsor
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Date: 17/12/2009 10:09:02 Produced by the JSE SENS Department.
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