| Wed 14 Jan 2004, 15:57 | | PROGRESS REPORT ON THE UNDERGROUND MINE, |
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PALABORA MINING COMPANY LIMITED - PROGRESS REPORT ON THE UNDERGROUND MINE,
FOURTH QUARTER PRODUCTION STATISTICS FOR 2003, TRADING UPDATE AND CAUTIONARY
ANNOUNCEMENT
PALABORA MINING COMPANY LIMITED
(Incorporated in the Republic of South Africa)
Registration number - 1956/002134/06
Share Code: PAM ARC ISIN: ZAE000005245
("Palabora" or "the Company")
PROGRESS REPORT ON THE UNDERGROUND MINE, FOURTH QUARTER PRODUCTION STATISTICS
FOR 2003, TRADING UPDATE AND CAUTIONARY ANNOUNCEMENT
Progress report on the underground mine
Palabora"s underground mine achieved a number of significant milestones during
2003. In particular, the safety record was by far the best on record. This is
consistent with improvements around the rest of the business where a total of 17
lost time injuries were recorded compared to 26 in 2002. The Industrial Minerals
Division continued with its excellent safety performance, finishing the year
without any lost time injuries. Production rates from the underground at year
end were close to three times higher than at the beginning of the year as a
result of the improvements initiated during 2003.
Underground production continued to improve during the final quarter of 2003.
Production increased by 20% over the third quarter"s performance of 18,355 tons
of ore per day to an average rate of 21,983 tons of ore per day. The expected
full production rate of 30,000 tons of ore per day remains the key target.
The following table summarises recent daily underground production:
Final Quarter 2003 21,983 tons per day average
Month December 2003 22,603 tons per day average
Final 10 days to 31 December 2003 24,292 tons per day average
Production shortfalls relate primarily to the delayed undercut development and
equipment deficiencies. The development of the undercut has been slowed down in
order to better manage rock stress and improve the longer-term management of the
cave. A further three secondary breaking units and load haul dump units were
commissioned in the last quarter. Three additional secondary breaking units have
been ordered for delivery in April 2004.
Underground project status at 31 December 2003
Commissioned Target Anticipated Date
Undercut 117,556sq.m. 119,339sqm Jan 2004
Draw bells 148 166 April 2004
Crosscuts 16 19 April 2004
A production rate of 30,000 tons of ore per day was achieved on several
occasions during the fourth quarter and the Company is confident of achieving
that rate more regularly in the weeks ahead. Current work to achieve this is
focussed on further improvements to equipment availability, particularly
secondary breaking equipment. As always, the safety of employees and contractors
is being given first priority and will not be compromised to achieve production
targets.
Fourth quarter production statistics
Tonnage of ore treated during the fourth quarter of 2003 was in line with the
underground output. The open pit ramp scavenging operation was completed in
November. Copper in concentrate production increased with the improved head
grades and recoveries. Total concentrate smelted comprised run-of-mine
production, smelter secondary and imported concentrate.
Vermiculite production was stable and the reconfigured plant continues to meet
market demand at significantly improved recoveries. Production during the third
quarter of 2003 was reduced in order to lower supply chain inventory levels.
ZBS (zirconium basic sulphate) production for the fourth quarter was 305 metric
tons and 1,129 metric tons for the year. Whilst the plant has been proven
technically, the difficult market conditions have meant that the Board are in
the process of considering other options for the ZBS facility, including, sale
to a third-party as a going concern and specific product toll-manufacturing.
Shareholders will be advised in due course regarding the Board"s decision.
OPERATIONAL DATA
FULL FULL
4Q 1Q 2Q 3Q 4Q YEAR YEAR
2002 2003 2003 2003 2003 2002 2003
Palabora mine
Ore treated ("000 tons) 2,648 2,453 2,726 3,398 2,838 9,933 11,415
Average ore grade: copper 0.56 0.59 0.60 0.53 0.63 0.63 0.59
(%)
Copper concentrates 35.7 35.3 38.2 43.5 46.3 167.9 163.3
produced ("000 tons)
Average concentrate grade: 31.9 31.5 32.7 32.9 31.3 31.1 32.1
copper (%)
Copper in concentrates 11.4 11.1 12.5 14.3 14.5 52.2 52.4
("000 tons)
Palabora smelter/refinery
New concentrate smelted on 59.7 57.5 73.7 64.0 80.0 258.6 275.2
site ("000 tons)
New copper anodes produced 18.9 15.8 20.1 19.4 21.3 82.3 76.7
("000 tons) (1)
Refined new copper produced 20.4 15.9 19.2 17.4 20.9 81.6 73.4
("000 tons)
By-products:
Magnetite concentrate ("000 40 44 51 53 68 172 215
tons)
Refined nickel sulphate 85 61 27 26 38 314 152
(tons)
Vermiculite plant
Vermiculite produced ("000 59.8 51.2 53.9 32.5 35.6 223.5 173.2
tons)
(1) Contained copper in anodes; anode production includes an amount
produced from purchased material.
Trading update and cautionary announcement
Shareholders are advised that the company"s earnings and headline earnings per
share for the year ended 31 December 2003 will be substantially ("substantially"
equating to 30% or more as defined in the Listings Requirements of the JSE
Securities Exchange South Africa ("JSE")) below those of the comparative period,
resulting in a loss situation. It is anticipated that the unaudited results for
the year ended 31 December 2003 will be published on or about 28 January 2004 at
which stage further details will be provided regarding the company"s results.
The company"s results have not been reviewed and/or reported on by the company"s
auditors and accordingly, shareholders are advised to exercise caution when
dealing in the company"s securities on the JSE until the audited results for the
year ended 31 December 2003 are published.
For further information please contact the Managing Director, David Sadler, on
27 + (0) 15 780 2802.
Phalaborwa
14 January 2004
Sponsor:
Barnard Jacobs Mellet Corporate Finance (Pty) Limited
Date: 14/01/2004 03:56:04 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
