Anglovaal Mining Limited
Reg. No. 05/04580/06
56 Main Street, Johannesburg, 2001, South Africa
Phone: (+27 11) 634-9111, Fax: (+27 11) 634-0038
Share Code : AIN
ISIN Code : ZAE 000017141
Contact details:
JULIAN GWILLIM
Direct line: (+27 11) 634-0092
Mobile: 082 4524 389
Johannesburg, 18 December 2001: In its results for the year ended 30 June
2001, published on 30 August 2001, Anglovaal Mining Limited (Avmin) informed
shareholders that the results for the year ending 30 June 2002 are not
expected to show an improvement over those for 2001.
The Board of Directors believes that shareholders should be aware of the
following:
Recent weakness of the South African Rand against the United States Dollar
will have a positive impact on the contributions from Assmang Limited and
the Nkomati nickel mine; and
Avmin's strategy of strengthening its balance sheet through the disposal of
its investment in Iscor Limited, and shares in Assore Limited as well as
small quantities of Avgold Limited shares will reduce envisaged interest
charges.
However, Avmin's cobalt and copper producer, Chambishi Metals plc will not
reach full production as expected in the first half of the 2002 calendar
year. The furnace, which is operating at approximately 50 per cent of
capacity, will be taken off-line in January 2002 to replace a small section
of the refractory brick lining. Furthermore, Hatch, Canada, has been
contracted to re-design the cooling system and this will result in the
furnace being down in June and July 2002 to install the new cooling system.
Although it is expected that the furnace will continue to operate at 50 per
cent capacity prior to this shutdown and coupled with lower than expected
cobalt prices being received, the contribution from Chambishi Metals to
Avmin's earnings will be negative.
The positive effect on earnings from a weaker rand and a lower interest
charge may therefore not offset the reduction from Chambishi Metals. The
Board remains of the opinion that Avmin's headline earnings may not match
those of the 2001 financial year.
In addition, the Board is considering an impairment charge on the Chambishi
Metals assets. The total capital investment to date for Chambishi Metals is
US$260 million, which includes the acquisition cost. After a comprehensive
review has been submitted, the Board will make a decision before the end of
February 2002 as to whether an impairment charge is appropriate and, if so,
at what quantum. Shareholders will be informed accordingly.
ends
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