Petmin Limited SHAREHOLDER AND TRADING UPDATE (0110Y)

TIDMPTMN

RNS Number : 0110Y

Petmin Limited

15 February 2013

PETMIN LIMITED

Incorporated in the Republic of South Africa

Registration Number 1972/001062/06

Share Code JSE: PET & ISIN: ZAE000076014

Share Code AIM: PTMN

("Petmin" or "the Company")

15 February 2013

SHAREHOLDER AND TRADING UPDATE FOR THE SIX MONTHS ENDED 31 DECEMBER 2012

In terms of the Listings Requirements of JSE Limited ("Listings Requirements"), listed

Companies are required to publish a trading statement as soon as they are satisfied that a

reasonable degree of certainty exists that the financial results for the period to be reported

upon next will differ by at least 20% from those of the prior comparative period.

Petmin expects that earnings per share from continuing operations (taking into account the sale of the SamQuarz Silica operation) will be down approximately 16% for the six month period to 31 December 2012.

Earnings for the six months ended 31 December 2012 at Petmin's wholly-owned subsidiary, Tendele Coal Mining (Pty) Limited, were affected by production delays due to the previously reported unprotected strike by contractor employees and excessive rainfall which prevented the delivery of available coal to the wash plants. Despite the difficult operating conditions, the Group's operations remain cash generative, generating approximately R160 million cash in the six months ended 31 December 2012 (2011: R200 million).

Management is confident that these difficulties have been largely overcome and Tendele is now operating at its budgeted production levels. In the year ending 30 June 2013, Petmin anticipates that Tendele will sell approximately 876 000 tonnes (previous estimate 900 000 tonnes) of anthracite and, with the commissioning of the third wash plant in February 2013, the benefits of the sales of energy products will be seen.

Earnings per share (EPS) and headline earnings per share (HEPS) for the six months ended 31 December 2012 will be approximately 36% below the earnings reported for the comparative six months ended 31 December 2011 (these results included the results of SamQuarz).

For the six months ended 31 December 2012, Profit after tax is estimated to be R30 million, HEPS is estimated to be approximately 5.20 cents (2011, 8.15 cents), and EPS is estimated to be 5.20 cents (2011: 8.15 cents)

Anthracite Division

Tendele Coal Mining (Pty)Ltd - Somkhele anthracite mine

Production in the six months ended 31 December 2012 at Somkhele was severely constrained by:

-- the unprotected strike by contractor employees (see announcements released on the Securities Exchange News Service and to RNS dated 28 September 2012 and 8 October 2012),

-- unusually high rainfall encountered in Kwa-Zulu-Natal, South Africa, during October, November and December 2012, which prevented the delivery of coal from the open pits.

In the six months ended 31 December 2012, Somkhele lost a total of 42 production days to the unprotected strike and rainfall.

Fifteen production days were lost as a result of the unprotected strike action which was widespread in the South African mining industry and a further 27 production days were lost due to excessive rainfall encountered in Kwa-Zulu-Natal, South Africa (more than double the historic average).

The approximate quantitative effect of the above is summarised below:

 
 Reason              Production           ROM tonnes   Anthracite 
                      days lost            shortfall    saleable 
                                                        tonnes shortfall 
------------------  -------------------  -----------  ------------------ 
 Strike              15 days              127,500      53,550 
------------------  -------------------  -----------  ------------------ 
                     15 days unplanned 
                      lost production 
                      (Total 27 
                      days lost 
                      to rain of 
                      which 12 were 
 Rainfall             planned)            127,500      53,550 
------------------  -------------------  -----------  ------------------ 
 Total               30 days              255,000      107,100 
------------------  -------------------  -----------  ------------------ 
 Total saleable 
  tonnes produced 
  to 31 December 
  2012                                                 293,765 
---------------------------------------  -----------  ------------------ 
 Percentage 
  tonnes lost                                          27% 
---------------------------------------  -----------  ------------------ 
 

At the end of December 2012, Somkhele had 192,000 tonnes of exposed coal (coal that is available in the pits to be loaded and hauled to the wash plants) that could not be delivered to the wash plants in December due to the heavy rainfall. At the time of this report, these sections have been de-watered to grant access to the coal and the mine is operating at budgeted levels.

Had this coal been delivered to the wash plants and sold (Tendele had outstanding orders), management estimates that this would have resulted in a profit after tax for the six months ended 31 December 2012 of R44 million (up some 47% from the estimated profit after tax of R30 million) and the earnings per share for the period would have been approximately 22% up on the EPS from continuing operations for the comparative period ended 31 December 2011 (6.18 cents).

In the six months ended 31 December 2012, Somkhele maintained its expected sales volumes and prices as demand remained steady and deliveries were made from stockpiles on hand.

Production at Somkhele increased by 44% to 293 765 tonnes (2011: 203 425 tonnes) of saleable anthracite in the six months to 31 December 2012 and tonnes sold increased by 63% to 370 562 tonnes (2011: 227 041 tonnes) .

The significant capital investment in Somkhele during the past two years is largely completed and Tendele is now geared to produce some 1.2 million tonnes of anthracite annually and some 480 000 tonnes of energy product from the newly commissioned third plant.

During the period under review an extension to an existing mining right was obtained for the Luhlanga area. Once the Luhlanga mining area is in production (expected to commence in April 2013), Somkhele will operate in four different pit areas that will provide the flexibility to blend production to supply improved qualities and to reduce the risk of production delays should production in one of the pits be delayed. Following severe rains in January 2013, production levels have returned to normal. In order to mitigate the impact of rain on production going forward, Somkhele has commenced a campaign to stockpile run-of-mine (ROM) coal at the pit-head so that it may still be delivered to the wash plants in the event of sustained heavy rainfall. The aim of the campaign is to ensure some 100 000 ROM material on stockpile that will allow the plants to operate at full capacity for 10 days in the event that the pits can't be accessed due to rain. At the time of writing this report, some 40 000 ROM tonnes are on the stockpile.

With production levels improving and an anthracite market that is showing reasonable demand at prices better than during the previous six months, Petmin expects production from Somkhele to increase significantly in the six months ending 30 June 2013.

North-Atlantic Iron Corporation (NAIC)

Petmin will provide feedback on the positive progress made at the North Atlantic Iron Corporation pig iron project when it publishes its interim results on 4 March 2013.

The financial information on which this trading statement is based has not been reviewed, audited nor reported on by Petmin's external auditors.

Enquiries:

Petmin

Bradley Doig

[phone] (office)

[phone] (mobile)

Media

Jonathon Rees [phone]

[e-mail]

Sponsor and Corporate Advisor (JSE)

River Group

Andrew Lianos [phone]

Nominated Adviser and Broker (AIM)

Macquarie Capital (Europe) Limited

Steve Baldwin [phone]

Nicholas Harland [phone]

River Group

Johannesburg

15 February 2013

This information is provided by RNS

The company news service from the London Stock Exchange

END

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