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PAM
PAM
PAM - Palabora - Reviewed preliminary results for the year ended
31 December 2006
Palabora Mining
Company Limited and its Subsidiaries
(Incorporated in the Republic of South Africa)
(Reg. No. 1956/002134/06)
JSE Code: PAM
ISIN: ZAE000005245
("Group" or "Palabora" or "the Company")
Reviewed Preliminary Results for the year ended 31 December 2006
COMMENTARY
Overview
Commenting on the Group`s annual results, Keith Marshall MD stated:
"Our sustained production improvement, coupled with the opportunistic sale of
surface stockpiled material, has been handsomely rewarded by favourable copper
prices."
Annual underground production (30,193tpd) exceeded design capacity (30,000tpd)
for the first time. The smelter, rejuvenated by the Quarter 1 shutdown, is now
performing at much improved levels.
While there was an 18% improvement in the safety statistics, much work remains
to be done to improve the safety performance.
Overall, 2006 has been a great year for the Company, especially when compared
with previous years.
We would like to thank our employees and all other stakeholders who have stood
by us during our long walk back to profitability.
Group financial results
For the year ended 31 December 2006 2005
Profit / (loss) for the year R 467 million R (93) million
Basic earnings/ (loss) per share 1,291 cents (328) cents
Profit/ (loss) from continuing operations
before interest and tax
(EBIT) R 1,172 million R 275 million
Sales of products increased by R2,603 million (108%) to R5,014 million largely
as a result of the following:
- Higher realised prices of copper and by-product of R1,460 million and R131
million respectively; a weakening average US$/Rand exchange rate from 6.37 in
2005 compared with 6.77 in 2006 (+R147 million); partially offset by a lower
realised price of vermiculite sales (-R31 million);
- Copper sales volumes increased by 18 thousand tonnes (including 16 thousand
tonnes of surface stockpile) to 97 thousand tonnes in 2006 (+R811 million)
mainly as a result of the sales of surface stockpiles (+R707 million). Other
sales volumes increased by R85 million mainly owing to the higher volumes of
magnetite (+225 thousand tonnes) and vermiculite sales (+10 thousand tonnes)
respectively of +R56 million and +R16 million.
The Group achieved an average realised selling price (post hedge) for local
copper rod and cathode of R34,469 per tonne (2005: R23,558 per tonne) and
R29,721 per tonne (2005: R23,508 per tonne) respectively. In the year under
review, a total of 80,986 tonnes of copper was sold, compared with 78,654
tonnes during 2005. Reverts and copper concentrate throughput contributed an
additional 16,011 tonnes copper.
The increase in sales of products was partially offset by the realised hedging
losses (R1,032 million) resulting from the swap settlement of 44 thousand
tonnes of copper (-R986 million movement from 2005 to 2006).
Total Group cost of sales increased by R622 million, from R1,740 million in
2005 to R2,362 million in 2006.
This increase resulted from the following:
- The increase in the cost of product purchases (+R356 million) is attributable
to the LME copper price impact on purchased concentrate of +R528 million higher
than 2005 product purchases; offset by a decrease of four thousand tonnes in
copper concentrate purchases from 29 thousand tonnes in 2005 to 25 thousand
tonnes in 2006 (-R184 million) and other sales of +R12 million;
- Production costs increased by +R170 million mainly as a result of:
- the underground rework completed on the North-Inner haulage road and the
rebuild completion on the four underground crushers, tyre costs and mobile
maintenance;
- the furnace shutdown at the smelter during the first half of 2006 and
material transportation cost;
- major consumables, utilities, and personnel cost.
- Overall depreciation for 2006 was +R48 million higher than 2005 due to
higher production levels and a lower reserve declaration at the end of 2005
following the open pit subsidence;
- A decrease in stock variation (+R48 million) from R185 million in 2005 to
R137 million in 2006 mainly resulted from the build up of stock in 2005 in
preparation of the smelter shutdown; the increase in the stock levels during
2006 is mainly attributable to the revaluation of the revert stock from 2
thousand R/t to 17 thousand R/t (+R172 million).
The Group achieved a gross profit from continuing operations during 2006 of
R1,620 million, versus a gross profit of R624 million in 2005.
Other factors that contributed to the profit from continuing operations before
interest and tax (EBIT) of R1,172 million include:
- insurance proceeds received during 2006 for the claim on the ground
subsidence of the open pit (+R35 million);
- the impact of the exclusion of severance costs from the provision for closure
costs: (+R54 million);
- offset by a negative R111 million in selling and distribution costs mainly
attributable to the cost incurred for the export of magnetite sales, and R66
million in administration expenses.
Profit from continuing operations before interest and tax (EBIT) improved by
R897 million from a profit of R275 million in 2005 to a profit of R1,172
million in 2006.
Net finance cost increased by R49 million mainly as a result of:
- Unrealised exchange losses on current loans of R127 million (2005: R102
million exchange loss) due to a 10% depreciation of the Rand in 2006 compared
with a 12% depreciation in 2005;
- higher interest paid due to the rising interest rate (+R10 million);
- offset by the decrease in the cost of the new loan compared with the
overdraft and medium term facilities repaid in late 2005 (-R88 million).
Deferred tax expenses in 2006 of R260 million (2005: Rnil) were recorded in the
income statement. Deferred tax assets of R796 million (2005: Rnil) related to
the mark-to-market entries on the hedge book were recognised directly in
equity. At 31 December 2006, the group had unredeemed capital expenditure of
R851 million (2005:
R1,766 million).
The net loss associated with the discontinued operations represents a write-off
of R24 million (pre tax) of the ZBS plant initially recognised as a non-current
asset held for sale following the decision to close the plant.
The net profit for the year was R467 million compared with a loss of R93
million in 2005. The basic earnings per share improved from a loss of 328 cents
per share to a profit of 1,291 cents per share.
Cash flow
Cash and cash equivalents at 31 December 2006 were R670 million compared with
R202 million in 2005.
Cash from operating activities of R946 million (2005: R4 million) was generated
mainly as a result of a significant increase in realised (pre-hedge) copper rod
and cathode prices (2006: 316 Usc/lb; 2005: 169 Usc/lb) and the sale of low
grade concentrate and reverts of 16,011 tonnes of copper (2005: nil) as part of
the focus on our internal copper inventories as well as the low grade surface
stockpiles.
A net cash outflow of R128 million for investing activities (2005: R101
million) related to capital projects of R144 million, of which R32 and R45
million went for underground and smelter development respectively. The net cash
outflow was offset by the proceeds received from the sale of property, plant
and equipment and other investing activities to the amount of R16 million.
The cash outflow from financing activities of R351 million (2005: R653 million
inflow) was due to the repayments of the first two principals of the term
facility agreement and the redemption of outstanding debentures during the
second half of 2006.
Convertible Debentures
The redeemable convertible debentures expired on 18 September 2006. A total of
600,660 debentures were converted resulting in the issue of 20,021,997 ordinary
shares. The total issued share capital of the Company is now 48,337,497 shares
of which 57.7% are held by Rio Tinto, 16.8% by Anglo American and 25.5% by the
public.
Accordingly, the debentures were redeemed at their principal amount (i.e.
R1,000 per debenture). A final interest payment in respect of the unconverted
debentures was calculated from 20 March 2006 to 17 September 2006.
Net Debt
Total borrowings decreased by R746 million mainly as a result of:
- the conversion and redemption of debentures of +R812 million;
- the capital repayments and amortisation of the Tranche A and B of the Term
Facility and the finance lease instalments for a total amount of +R73 million;
- new finance lease agreement -R12 million;
- an increase in US$ denominated debt of -R127 million due to the weakening of
the Rand by 65 basis points (from 6.979 to 6.334).
Seventy five percent of the Group`s borrowings are denominated in US$ for a
total amount of US$ 185 million.
Hedging
The combined hedge book amounted to 190,567 tonnes of copper at 31 December
2006 for a total hedged amount of R 3,413 million spread over 7 years. The
mark-to-market loss of the hedge position increased by R1,633 million from R820
million at 31 December 2005 to R2,453 million at 31 December 2006. The
settlement of 44,025 tonnes of copper commodity swap for the 2006 year resulted
in a hedging loss of R1,032 million reducing the benefit of the higher market
prices.
Mark-to-market entries on the hedge, together with the related deferred tax
asset were recognised directly in equity.
The realised hedge losses are offset against revenue in the income statement.
Management decided to use market estimates (refer to significant estimates in
the basis of preparation and accounting policy section) as proxies instead of
bank models for the latter part of the hedge book. The half year reported
combined hedge book would have been significantly lower had the same valuation
estimates been applied.
Magnetite
As part of the decision to build the magnetite business using "current
production", Palabora has entered into a supply contract for the magnetite
concentrate with Minmetals, for the supply of up to 2 million tonnes per annum
from October 2006.
Ore reserves
The total Proven Ore Reserves remaining as at 31 December 2006 were 118 million
tonnes (2005: 112 million tonnes) at a grade of 0.64% (2005: 0.67%) copper. The
increase in tonnage is the result of a reassessment of the anticipated dilutive
tonnes from the overlying open pit and a review of the block cave model.
Pension Fund Surplus
Financial statements have been finalised and audited and will be submitted to
the liquidator for review, and there after to the Financial Services Board
(FSB) for approval. This process is expected to be completed in the first half
of 2007 and distribution to be commenced thereafter.
Only after the FSB approval has been obtained can the liquidator release the
employer`s share of the surplus in the Fund, approximately R177 million, before
tax and including accrued interest.
Corporate Governance
On 28 February 2006, Mr. Warrick R.J. Ranson resigned from the Board as a
non-executive director and was replaced by Mrs Jo-Ann Goh. With effect from 30
June 2006, Mr Steven M. Din resigned as an executive director and Chief
Financial Officer and was replaced by Mr Charles A. Asubonten.
The Board fully supports the principles advocated in the King Report on
Corporate Governance for South Africa issued in 2002 (King II) and believes
more independent directors should be appointed onto the Board.
During the year, the Board reviewed its composition, size and mix of skills.
The size of the Board was reduced from 12 to 9 directors. The number of
directors representing Rio Tinto was therefore reduced from three to two non
executives and Anglo American from two to one. As a result, on 30 June 2006,
Mr. Tom Albanese and Mr. Rod Whyte resigned as non-executive directors
effective from 27 July 2006. Mr. Paul Henry also resigned as an alternate
non-executive director to Mr. Whyte.
The Board now comprises of three independent non-executive directors, three
non-executive directors and two executive directors. The Board is currently in
the process of recruiting an independent non-executive director and an
announcement will be made in due course.
C N Zungu K Marshall
Acting Chairman Managing Director
29 January 2007
GROUP RESULTS
Group
Income statement
for the year ended 31 December 2006 Reviewed Audited
2006 2005
R`000 R`000
Continuing operations
Sales of products 5 014 200 2 411 369
Hedge loss realised (1 032 321) (46 761)
3 981 879 2 364 608
Revenue
Cost of sales (2 362 149) (1 740 171)
Gross profit / (loss) 1 619 730 624 437
Other income 101 582 23 135
Selling and distribution costs (267 526) (156 518)
Administration expenses (279 033) (213 471)
Other expenses (3 025) (2 585)
Profit / (loss) from continuing operations
before
tax and net 1 171 728 274 998
finance costs
Finance costs - Net (410 170) (355 717)
Finance costs (440 761) (371 526)
Finance income 30 591 15 809
Profit / (loss) before tax from continuing
operations 761 558 (80 719)
Income tax expense (278 054) (6 693)
- Current tax (11 995) (1 596)
- Foreign tax (6 387) (5 097)
- Deferred tax (259 672) -
Profit / (loss) from continuing operations 483 504 (87 412)
Discontinued operation
Net loss after tax associated with discontinued
operation (16 158) (5 818)
Profit / (loss) for the year
Allocated as follows: 467 346 (93 230)
Equity holders of parent
Earnings / (loss) per share (cents): 467 346 (93 230)
- Basic earnings / (loss) per share, total
operations 1 291c (328)c
- Basic earnings / (loss) per share, continuing
operations 1 336c (307)c
- Basic earnings / (loss) per share,
discontinued operations (45)c (20)c
- Diluted earnings / (loss) per share, total
operations 1 291c (328)c
- Diluted earnings / (loss)per share,
continuing operations 1 336c (307)c
- Diluted earnings / (loss) per share,
discontinued operations (45)c (20)c
Balance sheet
as at 31 December 2006 Group
Reviewed Audited
2006 2005
R`000 R`000
Assets
Non-current assets
Property, plant and equipment 1 970 944 2 012 469
Intangible assets 325 9 722
Available-for-sale financial assets 275 571 210 499
Deferred tax assets 796 440 3 446
3 043 280 2 236 136
Current assets
Stores 65 433 51 769
Product inventories 768 753 594 983
Trade and other receivables 615 242 362 413
Current tax assets 4 498 492
Cash and cash equivalents 670 336 202 279
2 124 262 1 211 936
Non-current assets held for sale - 24 860
2 124 262 1 236 796
Total assets 5 167 542 3 472 932
Shareholders` equity and Liabilities
Capital and reserves
Share capital and premium 629 551 66 286
Other reserves (1 446 951) (683 715)
Retained earnings 569 846 102 500
Total shareholders` equity (247 554) (514 929)
Non-current liabilities
Long term loans 1 489 470 1 640 786
Derivative financial instrument 1 410 363 537 549
Provisions:
- Close-down and restoration costs 314 408 264 636
- Post retirement medical benefits 121 772 103 899
Deferred tax liabilities 259 293 -
3 595 306 2 546 870
Current liabilities
Trade and other payables 496 331 320 826
Derivative financial instrument 1 042 969 283 209
Provisions 37 364 32 246
Current portion of long-term loans 185 254 779 660
Current tax liabilities 2 807 -
Group companies - related parties 55 065 25 050
1 819 790 1 440 991
Total liabilities 5 415 096 3 987 861
Total equity and liabilities 5 167 542 3 472 932
Statement of recognised income and expenditure
for the year ended 31 December 2006 Group
Reviewed Audited
2006 2005
R`000 R`000
Available-for-sale investments:
- Valuation gains taken to equity 62 871 55 043
Exchange differences on translation of foreign
operations 22 928 2 953
Cash flow hedges:
- Losses taken to equity (2 664 895) (867 518)
- Transferred to profit or loss for the year 1 032 321 46 761
Actuarial losses on defined benefit plans (12 901) -
Tax on items taken directly to or transferred
from equity 796 440 -
Net income recognised directly in equity (763 236) (762 761)
Profit/ (loss) for the year 467 346 (93 230)
Total recognised income and expenses for the year (295 890) (855 991)
Attributable to:
Equity holders of the parent (295 890) (855 991)
Summarised cash flow statement
for the year ended 31 December 2006 Group
Reviewed Audited
2006 2005
R`000 R`000
Cash flows from operating activities 946 060 3 531
Cash generated from operating activities 1 192 212 255 843
Taxation paid (8 703) (10 627)
Interest paid (251 607) (241 685)
Interest received 14 158 -
Cash flows from investing activities (127 576) (100 863)
Replacement of property, plant and equipment (144 160) (108 038)
Proceeds on disposal of property, plant and
equipment 5 257 3 184
Amounts invested in rehabilitation fund (2 259) (4 449)
Amounts invested in long term receivable - (5 625)
Interest received 13 586 14 065
Cash flows from financing activities (350 427) 652 676
Long and short term loans raised - 927 189
Long and short term loans repaid (350 427) (274 513)
Increase in cash and cash equivalents 468 057 555 344
At beginning of year 202 279 (353 065)
At end of year 670 336 202 279
CORPORATE INFORMATION
The Group is a limited liability company incorporated and domiciled in South
Africa and has its primary listing on the JSE Limited. The address of its
registered office is 1 Copper Road, Phalaborwa, 1389. The Group preliminary
condensed consolidated financial statements of Palabora Mining Company Limited
for the year ended 31 December 2006 were authorised for issue in accordance
with a resolution of the Board of Directors passed on 25 January 2007.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
Audit review
The year end financial results have been reviewed in terms of paragraph 3.22 of
the Listings Requirements of the JSE Limited by the Group`s auditor,
PricewaterhouseCoopers Inc. The unqualified review opinion is available on
request from the Company secretary.
Basis of preparation
The preliminary condensed consolidated financial statements of the Group for
the year ended 31 December 2006 have been prepared in accordance with
International Accounting Standard (IAS) 34 (Interim Reporting).
The preliminary financial report does not include all the information and
disclosures required in the annual financial statements, and should be read in
conjunction with the Group`s annual financial statements as at 31 December
2005.
Presentational changes
The format of the statement of changes in equity has been changed to a
statement of recognised income and expenditure. In terms of the amendments to
IAS 19 - Employee Benefits, entities may elect to recognise all actuarial gains
and losses outside of the income statement. Entities that take up this option,
to recognise all actuarial gains and losses outside of the income statement,
are required to present a statement of recognised income and expenditure which
excludes transactions with the owner in their capacity as such. This is in line
with the group`s accounting policies and of the ultimate holding company, Rio
Tinto. Under this approach, a reconciliation of opening and closing balances of
share capital, reserves and retained earnings will be given in the notes.
Significant accounting policies
The accounting policies applied in the presentation of the preliminary report
are consistent with those applied for the year ended 31 December 2005. The
Group applied all the relevant new and revised standards and interpretations
that were in issue and effective for year ends ended 31 December 2006. This had
an insignificant impact on the financial statements.
Significant estimates
Mark-to-market valuation of the hedge book A review of the mark-to-market
method applied to fair valuing the hedge resulted in a change of estimate being
applied during the current year. The change originated primarily as a result of
quoted LME prices not exceeding 27 months. Management used market estimates as
proxies to value the period beyond 27 months, rather than bank models as was
previously done.
Product Inventory During the year certain product inventory items which had
previously been carried at net realisable value, were revalued to cost. Changes
in economic circumstances increased the net realisable value, resulting in it
being higher than cost.
Provision for Close-down and Restoration cost The provision for close-down and
restoration costs was impacted by the following movements during the year ended
31 December 2006:
- A R91 million increase due to a revised present closure obligation and an
expected earlier start of the closure program as a result of the revised
life-of-mine.
- A decrease in the discount rate from 2.9% to 2.4% resulted in a R13 million
increase in the provision.
- A change in the estimate of closure costs whereby provision is no longer made
for severance costs associated with mine closure, resulted in a R85 million
decrease of the provision.
- Finance charges (unwind of discount) through the income statement resulted in
an increase of R30 million in the provision.
2006 2005
EARNINGS PER SHARE
R`000 R`000
Reconciliation of net profit/(loss) for earnings per
share
Net profit/(loss) attributable to equity holders from
continuing operations 483 504 (87 412)
Loss attributable to equity holders from discontinued
operations (16 158) (5 818)
Net profit/(loss) attributable to equity holders 467 346 (93 230)
Interest on convertible redeemable debentures - 106 433
Net profit attributable to ordinary shareholders from
diluted earnings per share 467 346 13 203
Reconciliation of weighted average number of ordinary
shares
Weighted average number of ordinary shares for basic
earnings per share 36 188 28 450
Effect of dilution : Convertible redeemable debentures - 24 998
Adjusted weighted average number of ordinary shares 36 188 53 448
RECONCILIATION OF
HEADLINE EARNINGS
Profit/ (loss) Taxation Profit/(loss)
before and lease after
tax consideration tax
Year ended
31 December 2006
Profit/ (loss) per
income statement 737 589 (270 243) 467 346
Profit on disposal
of fixed assets (3 631) 1 183 (2 448)
Impairment charges - ZBS 23 969 (7 811) 16 158
Headline profit/(loss) 757 927 (276 871) 481 056
Year ended 31 December 2005
Profit/ (loss) per
income statement (86 537) (6 693) (93 230)
Profit on disposal of
fixed assets (4 014) - (4 014)
Profit on ZBS sale 685 - 685
Headline profit/(loss) (89 866) (6 693) (96 559)
Headline earnings /
(loss) per share - 2006 1 329c
Headline earnings /
(loss) per share - 2005 (339)c
NET DEBT Effective interest rate % Maturity
Non-current
Senior Term Facility Libor+2.3%/Jibar+2.65% 30.06.13
Convertible debentures Jibar+5% 16.09.06
Rio Tinto unsecured loan Libor+5%
Rio Tinto secured loan Libor+5%
Wesbank - Finance lease Prime - 1.85% 08.08.09
Current
Convertible debentures Jibar+5% 16.09.06
Senior Term Facility Libor+2.3%/Jibar+2.65% 30.06.13
Revolving credit facility Libor+2.3%/Jibar+2.65%
Rio Tinto secured loan Libor+5%
Wesbank - Finance lease Prime - 1.85% 08.08.09
Total borrowings
Cash and cash equivalents
Net debt
Total equity
2006 2005
NET DEBT
R`000 R`000
Non-current
Senior Term Facility 583 954 557 376
Convertible debentures - 418 340
Rio Tinto unsecured loan 732 795 665 070
Rio Tinto secured loan 164 006 -
Wesbank - Finance lease 8 715 -
1 489 470 1 640 786
Current
Convertible debentures - 393 730
Senior Term Facility 82 070 142 156
Revolving credit facility 99 754 94 925
Rio Tinto secured loan
- 148 849
Wesbank - Finance lease 3 430 -
185 254 779 660
Total borrowings 1 674 724 2 420 446
Cash and cash equivalents (670 336) (202 279)
Net debt 1 004 388 2 218 167
Total equity (247 554) (514 929)
SHARE CAPITAL, SHARE Share Share Retained
PREMIUM AND OTHER RESERVES Capital premium earnings
R`000 R`000 R`000
28 316 575 195 730
Balance at 1 January 2005
Fair value on available-for-sale
investments - - -
Currency translation differences - - -
Conversion of debentures 1 246 36 149 -
Net loss on cash flow hedges - - -
Hedge loss recycled to profit and loss - - -
Net loss for the year - - (93 230)
29 562 36 724 102 500
Balance at 31 December 2005
Fair value on available-for-sale
investments - - -
Currency translation differences - - -
Conversion of debentures 18 775 544 490 -
Net loss on cash flow hedges - - -
Hedge loss recycled to profit and loss - - -
Tax on items directly taken to equity - - -
Actuarial loss on defined benefit plans - - -
Net profit for the year - - 467 346
Balance at 31 December 2006 48 337 581 214 569 846
SHARE CAPITAL, SHARE Other Total
PREMIUM AND OTHER RESERVES
R`000 R`000
79 046 303 667
Balance at 1 January 2005
Fair value on available-for-sale investments 55 043 55 043
Currency translation differences 2 953 2 953
Conversion of debentures - 37 395
Net loss on cash flow hedges (867 518) (867 518)
Hedge loss recycled to profit and loss 46 761 46 761
Net loss for the year - (93 230)
(683 715) (514 929)
Balance at 31 December 2005
Fair value on available-for-sale investments 62 871 62 871
Currency translation differences 22 928 22 928
Conversion of debentures - 563 265
Net loss on cash flow hedges (2 664 895) (2 664 895)
Hedge loss recycled to profit and loss 1 032 321 1 032 321
Tax on items directly taken to equity 796 440 796 440
Actuarial loss on defined benefit plans (12 901) (12 901)
Net profit for the year - 467 346
Balance at 31 December 2006 (1 446 951) (247 554)
HEDGE BOOK Maturity Quantity Average
hedged price
Year (t) ZAR/t
2007 48 810 20 993
2008 39 885 19 680
2009 22 260 15 739
2010 22 179 15 739
2011 21 795 15 739
2012 21 072 15 739
2013 14 566 15 739
Total 190 567
Less: Non-Current portion
Current portion
HEDGE BOOK Hedged Mark to market
value loss
R`000 R`000
1 024 683 1 128 013
784 926 872 839
350 351 202 883
349 076 62 161
343 033 65 823
331 653 69 884
229 255 51 729
Total 3 412 977 2 453 332
Less: Non-Current portion 1 410 363
Current portion 1 042 969
SEGMENT REPORTING
Year ended 31
December 2006 Copper Industrial Copper Total
Minerals By-Products
Segment Revenue 3 255 727 355 755 370 397 3 981 879
Segment Results 1 221 513 25 462 176 781 1 423 756
Year ended
December 2005
Segment Revenue 1 855 734 302 574 206 300 2 364 608
Segment Results 99 881 60 603 72 755 233 239
GROUP SELECTED STATISTICS 2006
Revenue
Copper (net of hedge loss) R` million 3,256
By-products R` million 370
Vermiculite R` million 356
Net profit/ (loss) before tax R` million 738
Copper
Ore hoisted millions of tonnes 10,82
Average copper grade % Cu 0.714
Copper in concentrates produced `000 of tonnes 59,7
Cathode produced `000 of tonnes 81,2
LME Copper Price USc/lb 302.8
Average rand/dollar exchange rate R/US$ 6.77
Average copper price realised R/tonne 47,237
Average copper price realised USc/lb 316.5
Net cash cost R/tonne 16,863
Net cash cost USc/lb 112.7
Copper Rod
Unit selling price pre hedge USc/lb 316.2
Unit selling price post hedge USc/lb 240.1
Sales tonnes 72,590
Cathode
Unit selling price pre hedge (local) USc/lb 312.1
Unit selling price post hedge (local) USc/lb 237.0
Sales (local) tonnes 6,695
Unit selling price pre hedge (export) USc/lb 345
Unit selling price post hedge (export) USc/lb 261.8
Sales (export) tonnes 1,701
Vermiculite
Vermiculite sold tonnes 181,422
Average vermiculite prices realised R/tonne 1,547
Operational cash cost R/tonne 401.6
Magnetite
Magnetite sold tonnes 1,021,887
Average magnetite prices realised R/tonne 215
Imported concentrate
Volumes Tonnes copper 16,625
Cost R` million 753.6
Unit purchased price R/tonne of copper 45,328
Marginal ore concentrate
Volumes Tonnes copper 8,765
Cost R` million 259.3
Unit purchased price R/tonne of copper 29,579
Costs
Production cost (excluding concentrate
purchases) R` million 1,400.5
Cost of sales R` million 2,362.1
Capital expenditure and commitments
Capital expenditure R` million 144
Approved expenditure at end of each year R` million 194
Contracts placed at end of each year R` million 33
Investments
Fair value of unlisted investments R` million 276
GROUP SELECTED STATISTICS 2005
Revenue
Copper (net of hedge loss) R` million 1,949
By-products R` million 232
Vermiculite R` million 277
Net profit/ (loss) before tax R` million (75)
Copper
Ore hoisted millions of tonnes 10,03
Average copper grade % Cu 0.715
Copper in concentrates produced `000 of tonnes 61,2
Cathode produced `000 of tonnes 80,3
LME Copper Price USc/lb 166.9
Average rand/dollar exchange rate R/US$ 6.37
Average copper price realised R/tonne 24,188
Average copper price realised USc/lb 169.5
Net cash cost R/tonne 14,382
Net cash cost USc/lb 102.4
Copper Rod
Unit selling price pre hedge USc/lb 172.1
Unit selling price post hedge USc/lb 167.8
Sales tonnes 69,543
Cathode
Unit selling price pre hedge (local) USc/lb 168.3
Unit selling price post hedge (local) USc/lb 164.2
Sales (local) tonnes 4,089
Unit selling price pre hedge (export) USc/lb 170
Unit selling price post hedge (export) USc/lb 166.3
Sales (export) tonnes 5,021
Vermiculite
Vermiculite sold tonnes 171,097
Average vermiculite prices realised R/tonne 1,404
Operational cash cost R/tonne 325.9
Magnetite
Magnetite sold tonnes 759,203
Average magnetite prices realised R/tonne 127
Imported concentrate
Volumes Tonnes copper 24,530
Cost R` million 531.4
Unit purchased price R/tonne of copper 21,664
Marginal ore concentrate
Volumes Tonnes copper 8,121
Cost R` million 137.1
Unit purchased price R/tonne of copper 21,664
Costs
Production cost (excluding concentrate
purchases) R` million 874.8
Cost of sales R` million 1,740.2
Capital expenditure and commitments
Capital expenditure R` million 136
Approved expenditure at end of each year R` million 108
Contracts placed at end of each year R` million 27
Investments
Fair value of unlisted investments R` million 211
29 January 2007
Sponsor: Barnard Jacobs Mellet Corporate Finance (Pty) Ltd
Date: 29/01/2007 10:00:01 Produced by the JSE SENS Department.
