| Tue 16 Nov 2004, 13:46 | | MESSINA LIMITED - SOUTHERN PLATINUM RELEASES THIRD |
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MESSINA LIMITED - SOUTHERN PLATINUM RELEASES THIRD QUARTER RESULTS
MESSINA LIMITED
(Registration number 1950/035912/06)
Share code: MES
ISIN: ZAE000004438
(`Messina`)
The following is an extract from a news release issued by SouthernEra Resources
Limited, Messina`s holding company, in Toronto on 15 November 2004
`November 15, 2004
Shares Issued and Outstanding 85,339,411
TSX: SPC
SOUTHERN PLATINUM RELEASES THIRD QUARTER RESULTS
TORONTO, ONTARIO: The Board of Southern Platinum Corp. today announced the
following highlights from the third quarter of 2004:
- SouthernEra completed a plan of arrangement whereby the platinum and gold
businesses are now carried on by a new public company, Southern Platinum
Corp.
- Southern Platinum provided support to subsidiary Messina Platinum enabling
repayment of R75 million (approx. US$11 million) of project debt.
- Messina Platinum JV completed the final phase of in-fill drilling program
and announced a 16 percent increase in the platinum group metals resource
at the Dwaalkop Section.
Subsequent to the quarter, the Company announced that Messina`s Phase 1 mine had
surpassed the 80,000 tonnes per month production target.
Earnings
During the quarter, the Company`s operations at Messina Platinum continued to be
negatively impacted by the strength of the South African Rand.
The Company realized a net loss for the three months to September 30 of $8.7
million (10Cents (USD) per share) compared to net loss of $1.0 million (2Cents
(USD) per share) in the third quarter of 2003. In the current quarter, the
Company incurred an operating loss of $8.2 million on revenue of $10.4 million.
Revenue and associated mining costs in the comparable period of 2003 were
capitalized to the development of the mine, and were therefore not reported in
earnings, as commercial production was only achieved in the fourth quarter of
2003. Cash flow used in operations before changes in working capital for the
quarter was $4.5 million (5.2Cents (USD) per share), compared to $0.2 million
(0.3Cents (USD) per share) in the third quarter of 2003.
Operations Update
Progress in the quarter with development and the production ramp up at Messina
Platinum`s Phase 1 Mine was satisfactory. In the quarter Messina produced
approximately 20,800 ounces of 5PGEs plus gold from approx. 200,000 tonnes
milled. Messina also produced 217 tonnes of nickel and 157 tonnes of copper. The
average head grade for the quarter was below plan at 3.64 grams per tonne
(5PGE`s+Au) as a consequence of mining in faulted ground during the quarter.
Plant recoveries, however, continued above plan at 89 percent.
The table below summarises the results for the year to date:
Q1 Q2 Q3 Q3 YTD October
04
Reef Tonnes Mined 158,003 146,803 214,187 518,993 83,023
Reef Tonnes 171,410 157,147 199,967 528,524 81,383
Milled
5PGE+Au Grade g/t 4.33 4.12 3.64 4.01 3.83
Plant Recoveries 89.2 87.9 89.0 88.74 88.1
%
5PGE + Gold Oz. 21,284 18,301 20,822 60,407 8,827
Nickel Tonnes 216 182 217 615 85
Copper Tonnes 157 131 157 445 60
By the end of the quarter it was apparent that the mine is beginning to reap the
benefits from the numerous business practice improvements taken during the first
six months of the year. `Continuous operations` is now well established at
Messina. The mine is now operating smoothly on a seven-day-a-week cycle. Mine
management and representatives of Messina`s three recognised unions are meeting
regularly in joint sessions to improve the application of continuous operations
and productivity.
Based on knowledge gained while mining on the two upper levels of the mine
during the construction period, the Board in 2002 approved the expansion of the
Phase 1 mine`s capacity from the original 80,000 tonne per month to 120,000
tonnes per month. In addition, the implementation of new mining methods -
conventional and mechanised long-hole stoping - was also approved. To support
the increased mining rate, deepening of the mine commenced immediately rather
than waiting until Year 5 as originally planned. In addition, construction of a
trackless workshop was completed at the 350-meter level; development of a
decline ramp from the 350-meter level commenced; a fleet of trackless
development and mining equipment was purchased and operators were hired and
trained.
These strategic decisions - to increase the mining rate and to implement
superior mining methods - were embarked on with the full understanding that the
mine`s build-up to full production would be delayed. However, these decisions
ensure that once in full production the mine will be safer, more productive and,
hence, more profitable. Had Messina not taken these key strategic decisions when
it did, the risk that the originally designed 80,000 tonne per month Voorspoed
shaft would be able to achieve and sustain an operating profit under the current
strong Rand environment would be greater than it currently is.
Development to support the build-up to full production is progressing well on
the new 370 and 390-meter levels. The long-hole drilling and blasting on these
new levels is in now occurring regularly.
In addition to the high level of activity at the Phase 1 mine, Messina has
continued exploration at the Phase 2 (Doornvlei and Dwaalkop sections) and Phase
3 (Zebediela Section) projects. During the quarter the Messina Platinum Joint
Venture between Southern Platinum and Mvelaphanda Resources announced the
completion of the final phase of in-fill drilling at the Dwaalkop Section of the
Greater Messina Platinum project. This drilling program to a depth of 1,000
meters resulted in a 16 percent increase in the platinum group metals resource
to 9.1 million ounces.
A feasibility study has been completed at the Phase 2 Project, which
incorporates the Dwaalkop and Doornvlei sections of the Greater Messina, and
investigations are currently ongoing to fully evaluate alternatives to commence
the project in the current strong Rand environment.
Debt
During 2004 Southern Platinum has provided support to its subsidiary Messina
Platinum to meet the first two repayments in terms of the RMB syndicated project
debt facility. Through an inter-company facility arranged by the Company,
Messina repaid R63 million (approx. US$10.6 million) at the end of February and
a further R75 million (approx. US$11.3 million) at the end of August. Messina is
continuing discussions with the RMB syndicate and another major South African
bank to arrange restructuring of the remaining facility.
Southern Platinum is an independent producer, developer and explorer of platinum
group metals. The Company now controls the following platinum assets:
- 91.5 percent of Johannesburg-listed Messina Platinum;
- 50 percent of the Dwaalkop Joint Venture;
- 85 percent of the Millennium Platinum Project in South Africa;
- 100 percent of the Paradise Platinum Project in South Africa; and
- 95 percent of the Monts de Cristal Platinum Project in Gabon.
The common shares are traded on the Toronto Stock Exchange (TSX: SPC).
The full, unaudited interim financial statements and management`s discussion and
analysis for the quarter ended September 30, 2004 are available at
www.southplats.com.
FOR FURTHER INFORMATION PLEASE CONTACT:
Southern Platinum Corp.
Mr. Patrick Evans, President and CEO, or
Mr. Mark Rosslee, Senior Vice President and CFO, or
Mr. Chris Reynolds, Vice President and Controller
Telephone: (416) 359-7800
Fax: (416) 359-7801
E-mail: inbox@southplats.com
www.southplats.com
NOTE: Certain statements contained herein are `forward-looking` and are based on
the opinions and estimates of management, or on the opinions and estimates
provided to and accepted by management. These opinions and estimates include
those that relate to all the geological, development, mining and commodity price
and market parameters used by management. Forward-looking statements are subject
to a variety of risks and uncertainties and other factors that could cause
actual events or results to differ, possibly significantly. Readers are
therefore cautioned not to place undue reliance on any forward-looking
statement.`
Rosebank
16 November 2004
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
Date: 16/11/2004 12:13:08 PM
Produced by the JSE SENS Department
