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LON
LOLMI
LON - Lonmin Plc - Second Quarter 2011 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")
9 May 2011
Lonmin Plc
Second Quarter 2011 Production Report
Lonmin Plc, (Lonmin or the Company), the world`s third largest Platinum
producer, today announces its production results for the three months to 31
March 2011 (unaudited)
We continued to make solid progress in our operational performance. Both tonnes
mined and milled in the second quarter of the 2011 financial year increased over
the prior year period.
We have experienced an uncharacteristically high level of fatalities since the
beginning of the quarter. Three of these fatalities occurred within the quarter
and two fatalities occurred in April 2011. Management is working, in
consultation with organised labour and the Department of Minerals and Resources
to address the situation.
Mining
Overall total tonnes mined at 2.9 million reflected an increase of 272,000,
equivalent to 10.4% against the prior year period.
Total tonnes mined in the second quarter of 2011 from our Marikana underground
operations were 2.7 million, an increase of 131,000 tonnes or 5.1% from the
prior year period. This increase was mainly as a result of increased production
at the Karee and Easterns mining operations, which increased production by
83,000 and 60,000 tonnes respectively. Production at Middelkraal and Westerns
was broadly flat impacted by the planned decline at Newman shaft and mechanical
breakdowns and worse than expected ground conditions at Hossy and Saffy
respectively. The overall tonnes lost from Section 54 stoppages was 48,000
tonnes compared to 65,000 in the prior year period.
Production at our opencast operations in the quarter was impacted by
comparatively higher rainfall and we produced 143,000 tonnes in the quarter,
compared to 193,000 tonnes in the first quarter. There was no significant
opencast mining in the prior year period as a result of the planned closures of
opencast operations in 2009.
Concentrators
Total tonnes milled in the quarter increased over the prior year period by 16.6%
or 421,000 tonnes to 2.95 million tonnes with opencast contributing 316,000
tonnes from current production and stockpiles. The underground tonnes increased
by 105,000 tonnes, to 2.6 million tonnes, equating to a 4.1% increase against
the prior year period.
Underground milled head grade was down 0.17 grammes per tonne or 3.5% to 4.57
grammes per tonne (5PGE+Au) when compared to 4.74 grammes per tonne in the prior
year period but showed an improvement from the quarter one grade of 4.55 grammes
per tonne. The decline in the underground grade was partly due to the increased
proportion of Merensky ore in the underground ore mix which increased from 19.5%
of ore milled to 23.1% as well as challenging ground conditions at K3 shaft. The
overall milled head grade is 4.31 grammes per tonne, a decline of 8.9% when
compared to the prior year period primarily as a result of the lower open cast
grade compared to a prior year period when no open cast tonnes were milled.
The benefits from our concentrator optimisation programme and good management
discipline continued as underground concentrator recoveries for the quarter
improved by 1.6% to 86.0% against the prior year period whilst opencast
recoveries were a notable 82.7%.
Total Platinum in concentrate was 174,430 saleable ounces, an increase of 14,411
ounces or 9% when compared against the prior year period, with open cast
operations contributing 9,218 ounces.
Total refined production for the second quarter of 2011 was up by 24.3% to
225,152 Platinum ounces. This was due to the increase in metals in concentrate
and release of metals in process following the smelter re-build disruption from
quarter one.
Sales and Pricing
Metal sales during the quarter increased by 37.7% to 251,880 Platinum ounces and
40% to 495,240 PGM ounces. The significant increase was due to the increased
production and release of the stock built up in the first quarter when
deliveries were impacted by adverse weather conditions in the northern
hemisphere.
The US Dollar basket price was, at US$1,332, 20.8% higher than the prior year
period and 13.3% higher than quarter one. The increase in our South African Rand
basket was less marked at 10.8% due to the continued strengthening of the South
African Rand against the US Dollar during the quarter when compared to the prior
year period.
Lonmin also publishes today, in a separate announcement, its Interim Results for
the half year ending 31 March 2011.
ENQUIRIES:
Investors / Analysts:
Tanya Chikanza +44 (0) 207 201 6000
Head of Investor Relations
Media:
Cardew Group +44 (0) 207 930 0777
Rupert Pittman / James Milton
Financial Dynamics +27 (0) 21 487 9000
Dani Cohen / Ravin Maharaj
3 months 3 months
to 31 Mar to 31 Mar
2011 - Act 2010 - Act
Tonnes Marikana Karee1 kt 1,107 1,025
mined
Westerns1 kt 853 859
Middelkraal kt 437 444
1
Easterns1 kt 305 245
Underground kt 2,703 2,572
Opencast kt 143 7
Total kt 2,846 2,579
Pandora Underground kt 44 39
attributable
2
Lonmin Underground kt 2,746 2,611
Platinum
Opencast kt 143 7
Total kt 2,890 2,618
% tonnes mined from the % 72.5% 76.6%
UG2 reef
Tonnes Marikana Underground kt 2,536 2,453
milled
3
Opencast kt 316 -
Total kt 2,852 2,453
Pandora4 Underground kt 101 78
Lonmin Underground kt 2,636 2,531
Platinum
Head grade5 g/t 4.57 4.74
Recovery % 86.0% 84.7%
rate6
Opencast kt 316 0
Head grade5 g/t 2.16 0.00
Recovery % 82.7% 0.0%
rate6
Total kt 2,952 2,531
Head grade5 g/t 4.31 4.74
Recovery % 85.9% 84.7%
rate6
3 3
months months
to 31 to 31
Mar Mar
2011 - 2010 -
Act Act
Metals in Marikana Platinum oz 168,020 154,578
concentrate
7
Palladium oz 78,660 72,579
Gold oz 4,674 3,129
Rhodium oz 21,630 22,124
Ruthenium oz 34,734 33,543
Iridium oz 7,566 7,353
Total PGMs oz 315,284 293,306
Nickel8 MT 921 615
Copper8 MT 576 377
Pandora4 Platinum oz 6,410 5,441
Palladium oz 3,001 2,531
Gold oz 45 37
Rhodium oz 975 871
Ruthenium oz 1,539 1,289
Iridium oz 255 224
Total PGMs oz 12,225 10,394
Nickel8 MT 10 8
Copper8 MT 6 5
Lonmin Platinum Platinum oz 174,430 160,019
Palladium oz 81,661 75,110
Gold oz 4,719 3,166
Rhodium oz 22,605 22,995
Ruthenium oz 36,273 34,832
Iridium oz 7,822 7,577
Total PGMs oz 327,509 303,700
Nickel8 MT 931 623
Copper8 MT 582 381
3 3
months months
to 31 to 31
Mar Mar
2011 - 2010 -
Act Act
Refined Lonmin refined Platinum oz 198,998 180,956
production metal
production
Palladium oz 95,643 79,325
Gold oz 4,119 4,028
Rhodium oz 24,245 21,381
Ruthenium oz 51,530 47,117
Iridium oz 8,768 10,502
Total PGMs oz 383,302 343,310
Toll refined Platinum oz 26,154 179
metal production
Palladium oz 13,090 63
Gold oz 839 -
Rhodium oz 3,713 485
Ruthenium oz 10,935 -
Iridium oz 2,311 -
Total PGMs oz 57,042 727
Total refined Platinum oz 225,152 181,135
PGMs
Palladium oz 108,733 79,388
Gold oz 4,958 4,028
Rhodium oz 27,958 21,866
Ruthenium oz 62,465 47,117
Iridium oz 11,078 10,502
Total PGMs oz 440,344 344,036
Base metals Nickel9 MT 1,190 883
Copper9 MT 726 526
Sales Lonmin Platinum Platinum oz 251,880 182,878
Palladium oz 131,326 81,783
Gold oz 5,362 5,393
Rhodium oz 33,412 22,039
Ruthenium oz 61,610 50,360
Iridium oz 11,650 11,390
Total PGMs oz 495,240 353,844
Nickel9 MT 1,217 814
Copper9 MT 688 523
Chrome9 MT 128,638 155,492
3 3
months months
to 31 to 31
Mar Mar
2011 - 2010 -
Act Act
Average Platinum $/oz 1,784 1,535
prices
Palladium $/oz 788 432
Gold $/oz 1,153 1,110
Rhodium $/oz 2,390 2,467
Ruthenium $/oz 173 173
Iridium $/oz 885 447
$ basket price excl. by-product $/oz 1,332 1,103
revenue11
R basket price excl. by-product R/oz 9,341 8,432
revenue11
R basket price incl. by-product R/oz 9,852 8,614
revenue12
Nickel9 $/MT 23,336 15,309
Copper9 $/MT 9,137 6,404
Chrome9 $/MT 26 2
ExchangeRates Average rate for period13 R/$ 6.98 7.49
Closing rate R/$ 6.77 7.28
Notes:
1 During 2010 the management structure in mining was revised into four
business units. Karee includes the shafts K3, 1B and 4B and will also
include K4 once production commences. Westerns comprises Rowland,
Newman and ore purchases from W1. Middelkraal represents Hossy and
Saffy. Easterns includes E1, E2 and E3.
2 Pandora attributable tonnes mined includes 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. Chrome is produced in the
form of chromite concentrate and volumes shown are in the form of
chromite.
10 Concentrate and other 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 As per note 11 but including revenue from base metals.
13 Exchange rates are calculated using the market average daily closing
rate over the course of the period.
Date: 09/05/2011 08:00:01 Produced by the JSE SENS Department.
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