| Mon 14 Nov 2011, 9:05 | | LON - Lonmin Plc - Fourth Quarter 2011 Production Report |
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LON
LOLMI
LON - Lonmin Plc - Fourth 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")
14 November 2011
Lonmin Plc
Fourth Quarter 2011 Production Report
Lonmin Plc (Lonmin or the Company), the world`s third largest Platinum producer,
today publishes its production report for the three months to 30 September 2011.
Lonmin has also published today, in a separate announcement, its final results
for the year ended 30 September 2011.
Overview
During the fourth quarter, production was restored back to the normal operating
levels as anticipated and the momentum established earlier in the year was
regained, following the illegal industrial stoppage in May at the Karee
operations. We continue to make progress with our safety initiatives and we are
pleased with our achievement of 2.8 million Fatality Free Shifts (FFS) in the
quarter which has contributed to the 4 million FFS in the last five months of
the financial year. As a result of this recovery, our underground and total
tonnage mined and milled as well as our metals in concentrate for the full year
have increased when compared to the prior year.
Mining
Our underground operations at Marikana produced 3.1 million tonnes during the
fourth quarter of the 2011 financial year, an increase of 0.6% from the fourth
quarter of the 2010 financial year. The increase was mainly as a result of Karee
producing 9.5% more than the prior year period as the operational momentum was
re-established in the last six weeks of the quarter. Production at Westerns
decreased by 83,000 tonnes as the planned production decline at Newman
continued. Production at Middelkraal decreased by 1.3% against the prior period
year as challenging ground conditions and mechanical breakdowns continued to
persist whilst at Easterns, sporadic community unrest resulted in a 2.2%
decrease in production when compared against the prior year period. The impact
of Section 54 shut downs was 83,000 tonnes in lost production during the quarter
mainly at K3, 4B, Newman and Saffy. This compares to a loss in production during
the same period last year of 37,000 tonnes.
Production at our Merensky opencast operations decreased by 101,000 tonnes,
equivalent to 42.7% when compared to the prior year period as we slowed down
production in this quarter to enable us to optimise the grade. The temporary
community unrest referred to above also impacted on production.
Overall, tonnes mined of around 3.3 million for the quarter, reflected a
decrease of 83,000 tonnes, equivalent to a 2.5% reduction against the prior year
period.
Concentrators, Smelting and Refining
Total tonnes milled in the quarter were flat year on year at 3.3 million with
the 80,000 tonnes contribution from opencast offsetting a reduction in
underground tonnes milled.
Underground milled head grade was 4.55 grammes per tonne (5PGE+Au), down 0.08
grammes per tonne, or 1.7% compared to the prior year period. This reflects the
continued lower grade ore at our UG2 operations and the increase in the
proportion of Merensky ore in the underground ore mix. The overall milled head
grade was 4.51 grammes per tonne, a decline of 2.7% when compared to the prior
year period due to the contribution from the lower grade opencast ore in
contrast to no contribution in the prior year period.
Underground and overall concentrator recoveries were both 85.4%, an improvement
of 0.5% and 0.4% respectively when compared with the prior year period. This
improvement demonstrates the stable environment at our concentrators and
partially offsets the impact of the lower grades on our throughput.
Platinum in concentrate from the Marikana operations was 191,870 saleable
ounces, a quarter on quarter increase of 21.1% and 1.5% lower than the prior
year period. Including Pandora, concentrators in total produced 200,315 saleable
Platinum ounces for the quarter, being a 1.3% decrease from the prior year
period.
Total refined production for the quarter was 247,609 ounces of saleable Platinum
and 464,275 ounces of Platinum Group Metals (PGMs) ounces, a significant quarter
on quarter increase of 48.4% and 53.9% respectively as momentum built up in the
fourth quarter. The Platinum and PGM refined production however decreased by
17.9% and 13.0% respectively when compared to the prior year period. This is due
to the inclusion of toll refined material in the prior year period of 77,368
Platinum ounces and 106,112 PGM ounces as a result of the extended down time of
the Number One Furnace in 2010. In comparison, only 7,731 Platinum ounces and
8,218 PGM ounces were toll refined in the current quarter.
Sales and Pricing
Platinum sales for the fourth quarter were 241,979 Platinum ounces, and the
Company achieved the revised Platinum sales guidance for the year of (720,000)
ounces. Platinum sales for the fourth quarter were 24.9% lower than the prior
year period partly due to lower production in the current quarter and the
inclusion of sales of around 25,000 Platinum ounces in concentrate in the prior
year period which was a consequence of the Number One furnace outages.
Chrome sales have increased by 76.5% when compared to the prior year period with
the commissioning of the chrome plants at Rowland. K4 and Karee B. Operating
revenue for the quarter was $7 million.
The US Dollar price basket, at US$1,311, was 8.7% higher than the prior year
quarter and 0.6 % higher than the third quarter. The corresponding Rand basket
price was 9.4% higher than the prior year and 6.3% higher when compared to the
third quarter.
ENQUIRIES:
Investors / Analysts:
Tanya Chikanza +44 (0) 207 201 6007
Head of Investor Relations
Media:
Cardew Group +44 (0) 207 930 0777
Anthony Cardew / James Clark / Emma Crawshaw
Financial Dynamics +27 (0) 11 214 2402
Sue Vey / Chloe Webb
3 3
months months
to 30 to 30
Sep Sep
2011 2010
Tonnes Marikana Karee1 kt 1,323 1,209
mined
Westerns1 kt 915 998
Middelkraal kt 549 556
1
Easterns1 kt 313 320
Underground kt 3,100 3,083
Opencast kt 136 237
Total kt 3,236 3,320
Pandora Underground kt 47 47
attributable2
Lonmin Platinum Underground kt 3,147 3,129
Opencast kt 136 237
Total kt 3,283 3,367
% UG2 % 72.3% 72.4%
Tonnes Marikana Underground kt 3,060 3,142
milled
3
Opencast kt 80 -
Total kt 3,140 3,142
Pandora4 Underground kt 126 126
Lonmin Platinum Underground kt 3,187 3,268
Head grade5 g/t 4.55 4.63
Recovery % 85.4% 85.0%
rate6
Opencast kt 80 0
Head grade5 g/t 2.73 0.00
Recovery % 81.0% 0.0%
rate6
Total kt 3,267 3,268
Head grade5 g/t 4.51
4.63
Recovery % 85.4% 85.0%
rate6
3 3
months months
to 30 to 30
Sep Sep
2011 2010
Metals in Marikana Platinum oz 191,870 194,705
concentrate
7
Palladium oz 89,684 91,493
Gold oz 4,463 4,412
Rhodium oz 25,736 26,891
Ruthenium oz 40,114 42,761
Iridium oz 8,642 9,114
Total PGMs oz 360,509 369,376
Nickel8 MT 929 848
Copper8 MT 574 514
Pandora4 Platinum oz 8,445 8,192
Palladium oz 3,985 3,841
Gold oz 64 55
Rhodium oz 1,308 1,268
Ruthenium oz 2,030 2,003
Iridium oz 332 329
Total PGMs oz 16,164 15,687
Nickel8 MT 14 12
Copper8 MT 7 7
Lonmin Platinum Platinum oz 200,315 202,898
Palladium oz 93,669 95,333
Gold oz 4,526 4,467
Rhodium oz 27,044 28,159
Ruthenium oz 42,144 44,764
Iridium oz 8,974 9,443
Total PGMs oz 376,673 385,063
Nickel8 MT 943 861
Copper8 MT 581 521
3 3
months months
to 30 to 30
Sep Sep
2011 2010
Refined Lonmin refined Platinum oz 239,878 224,124
production metal production
Palladium oz 109,435 96,226
Gold oz 7,058 4,767
Rhodium oz 33,617 34,921
Ruthenium oz 54,785 55,484
Iridium oz 11,285 11,752
Total PGMs oz 456,057 427,275
Toll refined Platinum oz 7,731 77,368
metal production
Palladium oz 35 15,185
Gold oz - 1,100
Rhodium oz 380 4,601
Ruthenium oz - 6,524
Iridium oz 72 1,335
Total PGMs oz 8,218 106,112
Total refined Platinum oz 247,609 301,492
PGMs
Palladium oz 109,470 111,411
Gold oz 7,058 5,867
Rhodium oz 33,997 39,522
Ruthenium oz 54,785 62,008
Iridium oz 11,357 13,087
Total PGMs oz 464,275 533,387
Base metals Nickel9 MT 1,162 1,365
Copper9 MT 679 913
3 3
months months
to 30 to 30
Sep Sep
2011 2010
Sales Refined metal Platinum oz 241,979 297,551
sales
Palladium oz 118,181 111,047
Gold oz 6,968 6,158
Rhodium oz 33,300 35,210
Ruthenium oz 52,408 55,646
Iridium oz 9,400 8,892
Total PGMs oz 462,235 514,504
Concentrate and Platinum oz - 24,850
other10
Total PGMs oz - 24,850
Lonmin Platinum Platinum oz 241,979 322,401
Palladium oz 118,181 111,047
Gold oz 6,968 6,158
Rhodium oz 33,300 35,210
Ruthenium oz 52,408 55,646
Iridium oz 9,400 8,892
Total PGMs oz 462,235 539,354
Nickel9 MT 1,179 1,237
Copper9 MT 885 880
Chrome9 MT 314,924 178,429
3 3
months months
to 30 to 30
Sep Sep
2011 2010
Average Platinum $/oz 1,762 1,539
prices
Palladium $/oz 747 496
Gold $/oz 1,688 1,196
Rhodium $/oz 1,842 2,144
Ruthenium $/oz 162 183
Iridium $/oz 1,041 693
$ basket price excl. by- $/oz 1,311 1,206
product revenue11
R basket price excl. by- R/oz 9,434 8,627
product revenue11
R basket price incl. by- R/oz 9,945 9,077
product revenue12
Nickel9 $/MT 18,299 20,485
Copper9 $/MT 8,308 6,661
Chrome9 $/MT 23 14
ExchangeRates Average rate for R/$
period13 7.16 7.30
Closing rate R/$
8.05 6.92
Notes:
1 The management structure in mining is comprised of 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: 14/11/2011 09:05:38 Produced by the JSE SENS Department.
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