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LON
LOLMI
LON - Lonmin - Fourth Quarter 2010 Production Report
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")
15 November 2010
Lonmin Plc
Fourth Quarter 2010 Production Report
Introduction
Lonmin Plc, ("Lonmin" or "the company") today publishes its production report
for the three months to 30 September 2010. Lonmin has also published today, in a
separate announcement, its final results for the year ending 30 September 2010.
During the year, we reviewed and revised the management structure for Marikana
mining into four business units comprising Karee, Westerns, Middelkraal and
Easterns and we are reporting under this format for the first time.
Q4 2010 Production
Total tonnes mined for the fourth quarter of the 2010 financial year from our
Marikana underground operations, were 3.1 million, up 0.5 million, a 19.5%
increase from the prior year period and quarter on quarter increase of 19.3%.
All the mining business units increased their production quarter on quarter. The
0.5 million tonnes year on year increase reflects a notable 0.3 million tonnes
contribution from Karee which includes K3. In addition Middelkraal`s Saffy and
Hossy operations increased production by some 0.1 million tonnes or 29.8%,
whilst Easterns increased production by 33.7% or some 0.1 million tonnes.
Production at Westerns was more muted as the increase at Rowland was largely
offset by a decline at Newman, where the shaft is starting to come to the end of
its life. The reduction in the frequency and impact of Section 54 safety
shutdowns was a contributing factor with only around 37,000 tonnes of production
lost in the quarter due to Section 54 shutdowns, compared to around 196,000
tonnes in the prior period.
The quarter on quarter trend demonstrates an improving underground performance
as the year has progressed. In Quarter One the 2.6 million tonnes mined was
almost 4% lower than the prior year period. Quarter Two performance was
effectively flat whilst Quarter Three production increased by just over 10%.The
Quarter Four increase of almost 20% completes the trend and finishes the year
with an excellent underground mining performance.
Production at the Merensky open pit started at the end of the second quarter and
has continued to ramp up, achieving 0.2 million tonnes in the quarter. We expect
production to be maintained at this level during 2011.
Pandora underground production continued to improve and achieved a quarter on
quarter increase of 9.3% and a 21.2% increase over the prior year period.
Overall, tonnes mined in the quarter increased by 28.2% to 3.4 million tonnes
from prior period.
Total tonnes milled in the quarter increased over the prior year period by 8.6%
year on year to 3.3 million tonnes. This is lower than the increase in tonnes
mined as some 243,000 tonnes of opencast was milled in the last quarter of 2009
whilst in 2010 no opencast was milled, as 237,000 tonnes of opencast ore has
been stockpiled for milling during the Christmas break. Compared to the third
quarter of 2010 there was an increase of 17.6% in tonnes milled.
Underground concentrator recoveries increased significantly to 85.0% from 81.9%
from the prior year period, reflecting the continued success of the concentrator
optimisation programme.
Underground milled head grade was 4.63 grammes per tonne (5PGE+Au) for the
quarter, up from 4.59 grammes per tonne in the prior year period. This has
continued the trend of small grade improvements each quarter compared to the
prior year period. Sequentially, the underground head grade also showed an
improvement quarter on quarter from 4.60 grammes per tonne to 4.63 grammes per
tonne.
Platinum in concentrate from the Marikana operations was 194,705 saleable
ounces, a quarter on quarter increase of 19.2% and 18.8% increase from the prior
year period. In total, the concentrators produced 202,898 saleable ounces of
Platinum in concentrate for the quarter, a 17.9% increase from prior year
period. These marked improvements can be attributed to the increase in tonnes
milled and the continued excellent concentrator recoveries.
Total refined production in the fourth quarter of the 2010 financial year was
301,492 ounces of Platinum and 533,387 ounces of PGMs, a significant quarter on
quarter increase from 91,952 ounces of Platinum and 194,234 ounces of PGMs
respectively mainly due to the delays in production following the Number One
furnace incident in May. During the quarter, 77,368 ounces of Platinum were toll
refined in order to reduce the processing back log which arose from the extended
down time of the Number One smelter. Total refined Platinum and PGM production
in the quarter increased by 80.7% and 67.8% respectively year on year.
Metal sales during the fourth quarter of the 2010 financial year also increased
significantly by 67.4% and 50.3% to 322,401 and 539,354 Platinum and PGM ounces
respectively from the prior year. This included the sale of around 25,000
platinum ounces of concentrate.
ENQUIRIES:
Investors / Analysts:
Tanya Chikanza +44 (0) 207 201 6007
Head of Investor Relations
Media:
Cardew Group +44 (0) 207 930 0777
Rupert Pittman/Jamie Milton
Financial Dynamics +27 (0) 11 214 2000
Dani Cohen / Ravin Maharaj
3 months 3 months
to 30 Sep to 30 Sep
2010 2009
Tonnes mined Marikana Karee kt 1,209 941
Westerns kt 998 970
Middelkraal kt 556 428
Easterns kt 320 239
Underground kt 3,083 2,579
Opencast kt 237 -
Total kt 3,320 2,579
Pandora Underground kt 47 38
attributable
2
Opencast kt - 8
Total kt 47 47
Lonmin Underground kt 3,129 2,618
Platinum
Opencast kt 237 8
Total kt 3,367 2,626
Tonnes milled3 Marikana Underground kt 3,142 2,676
Opencast kt - 185
Total kt 3,142 2,861
Pandora4 Underground kt 126 90
Opencast kt - 59
Total kt 126 149
Lonmin Underground kt 3,268 2,767
Platinum
Head grade5 g/t 4.63 4.59
Recovery rate6 % 85.0% 81.9%
Opencast kt - 243
Head grade5 g/t 0.00 2.88
Recovery rate6 % 0.0% 51.0%
Total kt 3,268 3,010
Head grade5 g/t 4.63 4.45
Recovery rate6 % 85.0% 80.3%
3 months 3 months
to 30 Sep to 30 Sep
2010 2009
Metals in Marikana Platinum oz 194,705 163,870
concentrate7
Palladium oz 91,493 76,401
Gold oz 4,412 3,804
Rhodium oz 26,891 22,535
Ruthenium oz 42,761 33,634
Iridium oz 9,114 7,344
Total PGMs oz 369,376 307,588
Nickel8 MT 848 723
Copper8 MT 514 453
Pandora3 Platinum oz 8,192 8,212
Palladium oz 3,841 3,717
Gold oz 55 56
Rhodium oz 1,268 1,105
Ruthenium oz 2,003 1,537
Iridium oz 329 298
Total PGMs oz 15,687 14,924
Nickel8 MT 12 12
Copper8 MT 7 7
Lonmin Platinum oz 202,898 172,082
Platinum
Palladium oz 95,333 80,117
Gold oz 4,467 3,860
Rhodium oz 28,159 23,640
Ruthenium oz 44,764 35,170
Iridium oz 9,443 7,642
Total PGMs oz 385,063 322,512
Nickel8 MT 861 735
Copper8 MT 521 460
3 months 3 months
to 30 Sep to 30 Sep
2010 2009
Refined production Lonmin Platinum oz 224,124 165,251
refined
metal
Production12
Palladium oz 96,226 70,858
Gold oz 4,767 4,428
Rhodium oz 34,921 30,846
Ruthenium oz 55,484 35,733
Iridium oz 11,752 5,840
Total PGMs oz 427,275 312,955
Toll refined Platinum oz 77,368 1,600
metal
production
Palladium oz 15,185 736
Gold oz 1,100 48
Rhodium oz 4,601 538
Ruthenium oz 6,524 1,639
Iridium oz 1,335 328
Total PGMs oz 106,112 4,888
Total Platinum oz 301,492 166,851
refined
PGMs
Palladium oz 111,411 71,594
Gold oz 5,867 4,475
Rhodium oz 39,522 31,383
Ruthenium oz 62,008 37,372
Iridium oz 13,087 6,168
Total PGMs oz 533,387 317,843
Base metals Nickel9 MT 1,365 849
Copper9 MT 913 471
3 months 3 months
to 30 Sep to 30 Sep
2010 - 2009 - Act
Act
Sales Refined Platinum oz 297,551 167,546
Metal
Sales
Palladium oz 111,047 78,998
Gold oz 6,158 5,542
Rhodium oz 35,210 34,612
Ruthenium oz 55,646 40,538
Iridium oz 8,892 5,262
Total PGMs oz 514,504 332,498
Concentrate Platinum oz 24,850 25,062
and other10
Palladium oz - 370
Gold oz - 13
Rhodium oz - 174
Ruthenium oz - 301
Iridium oz - 387
Total PGMs oz 24,850 26,307
Lonmin Platinum oz 322,401 192,608
Platinum
Palladium oz 111,047 79,369
Gold oz 6,158 5,555
Rhodium oz 35,210 34,786
Ruthenium oz 55,646 40,839
Iridium oz 8,892 5,649
Total PGMs oz 539,354 358,806
Nickel9 MT 1,237 964
Copper9 MT 880 777
3 months 3 months
to 30 Sep to 30 Sep
2010 - 2009 - Act
Act
Average Platinum $/oz 1,539 1,252
Prices
Palladium $/oz 496 270
Gold $/oz 1,196 971
Rhodium $/oz 2,144 1,612
Ruthenium $/oz 183 79
Iridium $/oz 693 378
Basket price of $/oz 1,206 918
PGMs11
Basket price of R/oz 8,627 6,949
PGMs11
Nickel9 $/MT 20,485 16,208
Copper9 $/MT 6,661 6,193
Exchange Average rate for period13 R/$ 7.30 7.77
Rates
Closing rate R/$ 6.92 7.47
Notes:
1. During the year we revised the management structure into four business
units and we will report against these units from now onwards. Karee
includes the shafts K3, 1B and 4B and will also include K4 once
production commences. Westerns comprises Rowland, Newman and the now
closed W1 and B3. Middelkraal represents Hossy and Saffy. Easterns
include E1, E2 and E3.
2. Pandora`s attributable tonnes mined represents Lonmin`s share (42.5%)
of the total tonnes mined on the Pandora joint venture.
3. Tonnes milled exclude 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. 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)
6. Recovery rate in the concentrators is the total content produced
divided by the total content milled (excluding slag).
7. Metals in concentrate include metal derived from slag processing and
have been calculated at industry standard downstream processing losses
to present produced saleable ounces.
8. Corresponds to contained base metals in concentrate.
9. 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.
10. Concentrate and others sales have been adjusted to a saleable ounce
basis using industry standard recovery rates.
11. Basket price of PGMs is based on the revenue generated in Rand and
Dollar from the actual PGMs (5PGE + Au) sold in the period based on the
appropriate Rand / Dollar exchange rate applicable for each sales
transaction.
12. Lonmin refined metal production and sales include saleable ounces of
Platinum produced from toll refining third party concentrate estimated
at 3koz Q1, 3koz in Q2 and 2koz in Q3 (2009 - 4koz in Q4).
13. Exchange rates are calculated using the market average daily closing
rate over the course of the period.
Date: 15/11/2010 09:00:02 Produced by the JSE SENS Department.
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