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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Lonmin Plc | LSE:LMI | London | Ordinary Share | GB00BYSRJ698 | ORD USD0.0001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 75.60 | 73.70 | 74.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMLMI
RNS Number : 0668F
Lonmin PLC
15 May 2017
LEI No: 213800FGJZ2WAC6Y2L94
REGULATORY RELEASE
15 May 2017
Second Quarter 2017 Production Report
Lonmin Plc ("Lonmin" or "the Company"), today announces its unaudited production results for the three months to 31 March 2017. Lonmin also publishes today, in a separate announcement, its Interim Results for the half year ended 31 March 2017.
Overview
-- The 12 month rolling LTIFR to 31 March improved by 2.2% to 4.88 from 4.99 at 31 December 2016. Regrettably two colleagues were fatally injured in the period.
-- Tonnes mined from our Generation 2 shafts were 1.9 million tonnes, a decrease of 2.8% or 55,000 tonnes on the comparative period, as K3's underperformance predominantly weighed down the overall performance. Our Generation 1 shafts produced 0.5 million tonnes, a decrease of 21.8% or 133,000 tonnes on the comparative period, in line with our plan to close high cost areas, in response to the oversupplied market, as seen from lower prices. Newman shaft was closed during the period.
-- The poor mining performance from Q1 2017 continued into January 2017, with mining production of 584,000 tonnes for the month. The March production of 978,000 tonnes illustrates the mining improvement from the poor performance in the first four months to 31 January 2017.
-- K3 produced 276,000 tonnes in March 2017, the highest monthly mining production for the last 29 months, on the back of addressing the management/union impasse and change in management, compared to 126,000 tonnes in January 2016.
-- Saffy shaft produced 213,000 tonnes in March 2017, an all-time record for the life of the shaft.
Hot Features
Premium
Actual Actual Actual 3 months 3 month
Tonnes to 31 to 31
mined January February March Mar Mar
2017 2017 2017 2017 2016
------------ --------------- ---- -------- --------- ------- --------- --------
K3 Shaft kt 126 181 276 583 634
Rowland Shaft kt 113 155 185 452 420
Saffy Shaft kt 112 173 213 498 493
4B Shaft kt 97 112 137 346 388
--------------- ----------------- -------- --------- ------- --------- --------
Generation
2 kt 447 621 810 1 879 1 934
----------------------------- --- -------- --------- ------- --------- --------
Generation
1 kt 137 173 168 477 610
----------------------------- --- -------- --------- ------- --------- --------
Opencast kt 0 0 0 0 3
--------------- ----------------- -------- --------- ------- --------- --------
Lonmin Total Tonnes
(100%) Mined (100%) kt 584 794 978 2 356 2 547
------------ --------------- ---- -------- --------- ------- --------- --------
Cost of production per 15
PGM ounce 979 11 800 9 695 11 836 10 390
----------------------------------- -------- --------- ------- --------- --------
-- Production improvement has been maintained through April notwithstanding the Easter break, although this will need to be sustained.
-- Tonnes lost due to Section 54 safety stoppages at 137,000 tonnes were higher than the prior year period of 37,000 tonnes, on the back of the fatality at K3 in February, where 117,000 tonnes were lost to Section 54 stoppages.
-- Unit cost for the quarter was R11,836 per PGM ounce, 13.9% higher than the comparative prior year period, reflecting the weak mining performance in January 2017. The importance and impact of good mining production on unit cost is significant, as illustrated by the unit cost of R9,695 per PGM ounce for the month of March 2017, on the back of the strong mining production in March 2017.
-- Refined Platinum production of 164,138 ounces was down 7.5% on prior year period, reflecting the weak mining performance. Refined Platinum production benefited from the smelter clean-up project, which released a further 10,295 Platinum ounces during this quarter.
-- Platinum sales of 172,042 ounces were down 18.6% on the comparative prior year period.
-- Average Rand full basket price (including base metals) up 1.9% on Q2 2016, at R11,250 per PGM ounce.
Mining Operations
The Marikana mining operations including Pandora (100%) produced 2.4 million tonnes during the quarter, down 7.5% or 191,000 tonnes, on the comparative period. This decline is primarily the result of the removal of high cost Generation 1 production (133,000 tonnes), in line with our Business Plan strategy to remove high cost ounces, and due to the weak mining performance experienced at K3 (51,000 tonnes), arising from the management/union impasse, in the first four months to 31 January 2017.
As a result of the poor Q1 2017 performance, which continued into January 2017, a number of initiatives were implemented to address mining production and the union relationship at K3 shaft. Significant progress was made in this area, which consequently resulted in production increasing to 794,000 tonnes in February 2017, up from the 584,000 tonnes in January. March production stood at 978,000 tonnes, the highest monthly mining production for the last 18 months and the highest March production since 2012. This was achieved despite the planned reduction in high cost Generation 1 production.
Generation 2
Tonnes mined from our Generation 2 shafts were 1.9 million tonnes, a decrease of 2.8% on the comparative period in the prior year, as K3's underperformance up to January predominantly weighed down the overall performance.
-- K3, our biggest shaft, produced 583,000 tonnes, a decrease of 8.0% or 51,000 tonnes on the comparative prior year period. The union relationship issues experienced in the four months to 31 January 2017 have been resolved and the shaft produced 276,000 tonnes in March 2017, the highest monthly mining production for the last 29 months, compared to 126,000 tonnes in January 2017.
-- Rowland shaft produced 452,000 tonnes, an increase of 7.6% on the comparative prior year period.
-- Saffy shaft produced 498,000 tonnes, an increase of 1.1% on the comparative prior year period, demonstrating that the shaft is maintaining its steady state performance. Saffy experienced a grouting problem through to January 2017, which resulted in production of only 112,000 tonnes in January. Pleasingly, Saffy shaft produced 213,000 tonnes for the month of March 2017, an all-time record for the life of the shaft.
-- 4B produced 346,000 tonnes, a decrease of 10.7% on the comparative prior year period as a result of worse than planned geological conditions.
Generation 1
The performance at the Generation 1 shafts is in line with our plan and we are executing successfully the strategy to reduce high cost production in a low price environment. Tonnes mined from our Generation 1 shafts (1 B, Hossy, Newman, W1, E1, E2, E3 and Pandora (100%)) were 0.5 million tonnes, a decrease of 21.8%, on the comparative prior year period, reflecting the planned decline in production. Most of these shafts are run by contractors, which provide better flexibility to retain or close them.
A thorough technical assessment was conducted at the Newman shaft following the recent fatality. As a result the shaft is currently under review whilst on care and maintenance. Hossy shaft remains on track for planned care and maintenance closure by the end of the year.
Production Losses
The K3 and Newman fatalities resulted in an increase in tonnes lost to Section 54 stoppages in the second quarter. Tonnes lost due to Section 54 safety stoppages at 137,000 tonnes were higher than the comparative prior year period of 37,000 tonnes, with most of stoppages at K3 shaft where 117,000 tonnes were lost to Section 54 stoppages.
The increase in management induced safety stoppages (MISS) illustrate our non-negotiable stance on safety. Tonnes lost due to MISS for the quarter increased to 40,000 tonnes compared to none in the comparative prior year period. Most of these stoppages were at K3, with 36,000 tonnes lost to MISS.
Q2 2017 Q2 2016
Tonnes Tonnes
Section 54 safety stoppages 137,000 37,000
Management induced safety 40,000 -
stoppages and other
Total tonnes lost 177,000 37,000
----------------------------- -------- --------
Ore Reserves
We closely monitor our Immediately Available Ore Reserve position, in order to protect our operational flexibility. As at 31 March 2017, the ore reserve position of the Marikana mining operations represents an average of 20.6 months production, well above the industry benchmark of around 15 months.
As part of the drive to increase mining production, following the Q1 2017 Production Report, some non-critical development crews were moved to provide additional stoping and vamping crews in our core Generation 2 shafts. However, following the closure of Newman, contractor crews from this shaft are being moved to stoping and vamping to Generation 2 shafts, which is allowing the development crews to move back to development and retain Lonmin's operational flexibility.
Processing Operations
Milling production in the quarter of 2.2 million tonnes was affected by lower than planned ore availability from the mining operations and was 7.1% lower than in the comparative prior year period.
Underground milled head grade at 4.56 grammes per tonnes (5PGE+Au) decreased by 2.5% when compared to the 4.68 grammes per tonne achieved in the comparative prior year period and the overall milled head grade at 4.55 grammes per tonne, was down 2.3% on the comparative prior year period, due to milling more Merensky than planned and shortage of underground ore to mill, which affected plant stability.
Concentrator recoveries in the quarter remained excellent at 86.2%, marginally down from 86.7% on the comparative prior year period.
Platinum production (Metals-in-Concentrate) was 138,041 ounces, which was 10.6% lower than the comparative prior year period and PGM production (Metals-in-Concentrate) was 265,546 ounces, which was 10.4% lower than the comparative prior year period.
Total refined Platinum production of 164,138 ounces in the first quarter, was 7.5% lower than the comparative prior year period. Refined Platinum production did however benefit from the smelter clean-up project, which released a further 10,295 Platinum ounces during the quarter. Total PGMs produced were 305,331 ounces, a decrease of 9.2% on the comparative prior year period.
Sales and Pricing
Platinum sales for the quarter were 172,042 ounces, 18.6% lower than the comparative prior year period sales of 211,462 ounces as a result of poor mining performance. PGM sales were 319,896 ounces, down 21.7% on the comparative prior year period sales of 408,793.
The US Dollar basket price (including base metal revenue) at $850 per ounce during the quarter was up 19.2% on Q2 2016 while the corresponding Rand basket price of R11,250 per ounce was 1.9% higher than Q2 2016.
The average Rand to US Dollar exchange rate was 16.4% stronger at 13.22 compared to 15.81 in Q2 2016.
-S -
ENQUIRIES
Investors / Analysts:
Tanya Chikanza (Head of Investor Relations) +27 11 218 8358 / +44 203 908 1073 Andrew Mari (Investor Relations Manager) +27 11 218 8420
Media:
Wendy Tlou (Head of Communications) +27 83 358 0049
Anthony Cardew / Emma Crawshaw, Cardew Group +44 207 930 0777
Notes to editors
Lonmin, which is listed on both the London Stock Exchange and the Johannesburg Stock Exchange, is one of the world's largest primary producers of PGMs. These metals are essential for many industrial applications, especially catalytic converters for internal combustion engine emissions, as well as their widespread use in jewellery.
Lonmin's operations are situated in the Bushveld Igneous Complex in South Africa, where more than 70% of known global PGM resources are found.
The Company creates value for shareholders through mining, refining and marketing PGMs and has a vertically integrated operational structure - from mine to market. Underpinning the operations is the Shared Services function which provides high quality levels of support and infrastructure across the operations.
For further information, please visit our website: http://www.lonmin.com
3 months 3 months
to 31 to 31
Mar Mar
2017 2016
------------ ----------------------- ---------------------- ----- --------- ---------
Tonnes Generation
mined(1) 2 K3 Shaft kt 583 634
Rowland Shaft kt 452 420
Saffy Shaft kt 498 493
4B Shaft kt 346 388
Generation 2 kt 1 879 1 934
---------------------- ------------------------------------------ --------- ---------
Generation
1 Hossy Shaft kt 159 175
Newman Shaft kt 27 113
W1 Shaft kt 33 41
East 1 Shaft kt 44 40
East 2 Shaft kt 65 77
East 3 Shaft kt 22 17
Pandora (100%)(2) kt 127 147
Generation 1 kt 477 610
---------------------- ------------------------------------------ --------- ---------
Total Underground kt 2 356 2 544
---------------------- ------------------------------------------ --------- ---------
Opencast kt 3
---------------------- ------------------------------------------ --------- ---------
Total Tonnes Mined
Lonmin (100%) (100%) kt 2 356 2 547
% tonnes mined
from UG2 reef
(100%) % 73.4% 76.5%
---------------------- ------------------------------------------ --------- ---------
Underground &
Lonmin (attributable) Opencast kt 2 293 2 473
Ounces Lonmin excluding 153
mined(3) Pandora Pt Ounces oz 139 269 708
Pandora (100%) Pt Ounces oz 8 581 10 139
--------- ---------
163
Lonmin Pt Ounces oz 147 850 848
Lonmin excluding 294
Pandora PGM Ounces oz 267 498 341
Pandora (100%) PGM Ounces oz 16 980 19 867
--------- ---------
314
Lonmin PGM Ounces oz 284 478 208
----------------------- ---------------------- ------------------ --------- ---------
Tonnes
milled(4) Marikana Underground kt 2 034 2 201
Opencast kt 38 19
Total kt 2 071 2 220
Pandora(5) Underground kt 127 147
--------- ---------
Lonmin Platinum Underground kt 2 161 2 347
Milled head grade(6) g/t 4.56 4.68
Recovery rate(7) % 86.5% 86.7%
Opencast kt 38 19
Milled head grade(6) g/t 4.41 2.86
Recovery rate(7) % 70.1% 83.4%
Total kt 2 198 2 366
---------------------- ------------------------------------------ --------- ---------
Milled head grade(6) g/t 4.55 4.66
Recovery rate(7) % 86.2% 86.7%
---------------------- ------------------------------------------ --------- ---------
3 months 3 months
to 31 Mar to 31 Mar
2017 2016
---------------- ---------------- ----------- --- --------- ---------
Metals-in-
concentrate(8) Marikana Platinum oz 129 460 143 246
------------------
Palladium oz 60 206 66 190
Gold oz 3 220 3 505
Rhodium oz 18 456 20 737
Ruthenium oz 30 786 33 971
Iridium oz 6 437 6 827
Total PGMs oz 248 566 274 476
Nickel(9) MT 666 683
Copper(9) MT 419 425
----------- -------------------------------------
Pandora Platinum oz 8 581 10 139
Palladium oz 4 037 4 716
Gold oz 61 31
Rhodium oz 1 436 1 662
Ruthenium oz 2 373 2 757
Iridium oz 492 561
Total PGMs oz 16 980 19 867
Nickel(9) MT 19 36
Copper(9) MT 8 10
----------- ------------------------------------- --------- ---------
Concentrate
purchases Platinum oz 1 105
Palladium oz 435
Gold oz 5
Rhodium oz 153
Ruthenium oz 259
Iridium oz 61
Total PGMs oz 0 2 018
Nickel(9) MT 1
Copper(9) MT 0
----------- ------------------------------------- --------- ---------
Lonmin Platinum Platinum oz 138 041 154 491
Palladium oz 64 243 71 342
Gold oz 3 281 3 541
Rhodium oz 19 892 22 552
Ruthenium oz 33 158 36 986
Iridium oz 6 930 7 449
Total PGMs oz 265 546 296 361
Nickel(9) MT 684 720
Copper(9) MT 427 435
----------- ------------------------------------- --------- ---------
3 months 3 months
to 31 Mar to 31 Mar
2017 2016
------------------- ------------------------- -------------- ----- --------- ---------
Lonmin refined
Refined production metal production Platinum oz 164 136 175 833
-------------------------
Palladium oz 71 409 77 316
Gold oz 4 488 4 669
Rhodium oz 20 947 23 467
Ruthenium oz 36 833 42 973
Iridium oz 7 484 9 505
Total PGMs oz 305 297 333 762
-------------- --------------------------------------------------- --------- ---------
Toll refined
metal production Platinum oz 2 1 611
-------------------------
Palladium oz 6 303
Gold oz 1 11
Rhodium oz 9 75
Ruthenium oz 2 343
Iridium oz 13
Total PGMs oz 33 2 343
-------------- --------------------------------------------------- --------- ---------
Total refined
PGMs Platinum oz 164 138 177 444
-------------------------
Palladium oz 71 416 77 618
Gold oz 4 489 4 680
Rhodium oz 20 956 23 542
Ruthenium oz 36 835 43 316
Iridium oz 7 498 9 505
Total PGMs oz 305 331 336 105
-------------- --------------------------------------------------- --------- ---------
Base metals Nickel(10) MT 761 753
Copper(10) MT 492 463
-------------- --------------------------------------------------- --------- ---------
Refined metal
Sales sales Platinum oz 172 042 211 462
-------------------------
Palladium oz 72 455 100 412
Gold oz 4 456 5 930
Rhodium oz 24 867 25 966
Ruthenium oz 38 659 52 937
Iridium oz 7 417 12 086
Total PGMs oz 319 896 408 793
-------------- --------------------------------------------------- --------- ---------
Nickel(10) MT 801 709
Copper(10) MT 672
Chrome(10) MT 266 159 314 261
-------------- --------------------------------------------------- --------- ---------
Average prices Platinum $/oz 972 918
Palladium $/oz 759 529
Gold $/oz 1 242 1 394
Rhodium $/oz 875 654
$ basket excl. by-product revenue(11) $/oz 801 686
$ basket incl. by-product revenue(12) $/oz 850 713
R basket excl. by-product revenue(11) R/oz 10 587 10 635
R basket incl. by-product revenue(12) R/oz 11 250 11 035
----------------------------------------- ------------------------- --------- ---------
Nickel(10) $/MT 8 241 6 425
Copper(10) $/MT 4 321
----------------------------------------- ------------------------ --------- ---------
Notes:
1. Reporting of shafts are in line with our operating strategy for Generation 1 and Generation 2 shafts.
2. Pandora underground tonnes mined represents 100% of the total tonnes mined on the Pandora joint venture of which 42.5% for October and November 2014 and 50% thereafter is attributable to Lonmin.
3. Ounces mined have been calculated at achieved concentrator recoveries and with Lonmin standard downstream processing recoveries to present produced saleable ounces.
4. Tonnes milled excludes slag milling.
5. Lonmin purchases 100% of the ore produced by the Pandora joint venture for onward processing which is included in downstream operating statistics.
6. Head grade is the grammes per tonne (5PGE + Au) value contained in the tonnes milled and fed into the concentrator from the mines (excludes slag milled).
7. Recovery rate in the concentrators is the total content produced divided by the total content milled (excluding slag).
8. Metals-in-concentrate have been calculated at Lonmin standard downstream processing recoveries to present produced saleable ounces.
9. Corresponds to contained base metals in concentrate.
10. Nickel is produced and sold as nickel sulphate crystals or solution and the volumes shown correspond to contained metal. Copper is produced as refined product but typically at LME grade C. Chrome is produced in the form of chromite concentrate and volumes shown are in the form of chromite.
11. Basket price of PGMs is based on the revenue generated in Rand and Dollar from the actual PGMs (5PGE + Au) sold in the period based on the appropriate Rand / Dollar exchange rate applicable for each sales transaction.
12. As per note 11 but including revenue from base metals.
13. Exchange rates are calculated using the market average daily closing rate over the course of the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCAIMJTMBABBBR
(END) Dow Jones Newswires
May 15, 2017 02:01 ET (06:01 GMT)
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