Lonmin - Smelter Update
Lonmin Plc
(`Lonmin`)(Incorporated in England)
(Registered in the Republic of South Africa)
(Registration number 1969/000015/10)
ISIN code: GB0031192486Share code: LON
Issuer code: LOLMI
17 December 2004
Smelter Update and FY2005 GuidanceLonmin Plc stated today that repairs to its No. 1 smelter at its operations in
South Africa have proceeded according to plan. The reheating process will begin
on 7 January 2005 and Lonmin expects the first matte tap to be by the end of
January.As previously indicated, the estimated cost of repair is expected to be between
$4 to $6 million. Lonmin estimates the costs of running the pyromet furnaces
and tolling material through Impala will be approximately $11 million.
Sales and mine production volumes are expected to be largely unaffected for thefull year and sales in the half year are expected to be about 40% of the annual
total.
Including the additional smelting and repair costs which will fall into the
current year Lonmin`s best estimates of production and costs, at this point intime, for the full year to the end of September 2005 are as follows:
Source Production/000`s Rand Cost/PGM oz
Underground mines (Pt ozs) 765
Underground mine (total PGM Ozs) 1,460 2,400 Open Cast (Pt Ozs) 165
Open Cast (total PGM Ozs) 255 2,900
Total Mine Pt Ozs 930
Total Mine PGM Ozs 1,715 2,475 Total Pt Sales - Ozs 930
Total PGM Sales 1,715 2,475
The costs of R2,475 per PGM oz shown above include R60 per PGM oz for the
additional smelter and repair costs, which indicates a 2005 underlying cash costof R2,415 per PGM oz compared to the underlying cost in 2004 of R2,350 per PGM
oz, an increase of 3% year-on-year. This remains broadly in line with Lonmin`s
target to maintain the increase in cash costs per PGM oz below SA inflation.
Lonmin expect working capital to increase by about $50 million in the first halfof the financial year, with overall borrowings within our stated target gearing
levels. This abnormal position is expected to reverse in the second half of the
year.
Chief Executive Brad Mills said: `I am satisfied that the current smeltersituation has been managed effectively. The full year cost impact of the
incident has been contained at about R60 per PGM oz of sales. This incident is
regrettable but it is reassuring to confirm that the incident was unrelated and
much less serious than the previous smelter incident experienced in December2002. A complete review of our operational risks and a new hazard audit of the
entire smelter complex is being conducted with the participation of independent
professionals with a view to codifying the new techniques learned in the
implementation of new smelter technology. As a company we remain committed toachieving safe, low cost operations.`
END
Enquiries:
John Robinson Lonmin Plc T: 020 7201 6000Anthony Cardew Cardew
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