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Category: Financial markets and Lonmin
Date: 22 October 2018 Share price at time of writing: R10.11 We take a look at the production update announced by Lonmin earlier today. Lonmin was made famous/infamous after the well reported Marikana shootings of striking miners by the South African Police Service. So after the dust has settled on this matter, has Lonmin been able to ramp up production at their operations?
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About Lonmin
So Lonmin'as Marika mine made world headlines for all the wrong reasons unfortunately with the "Marikana Massacre" taking place at one of their mines. But what exactly does Lonmin do? The following was obtained from Lonmin's website:
Lonmin is a primary producer of Platinum Group Metals (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 and investment. Saleable by-products produced from our PGM mining include Gold, Copper, Nickel, Chrome and Cobalt.
Our core operations, consisting of 11 shafts and inclines, are situated in the Bushveld Igneous Complex in South Africa, a country which hosts nearly 80% of global PGM resources. We have been granted a New Order Mining Licence by the South African government for our core operations, which runs to 2037 and is renewable to 2067. We have resources of 181 million troy ounces (3PGE + Au) and 32 million ounces (3PGE + Au) of reserves.
We conduct all our business in a way which is socially and environmentally responsible and sustainable.
Our values
Lonmin is a primary producer of Platinum Group Metals (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 and investment. Saleable by-products produced from our PGM mining include Gold, Copper, Nickel, Chrome and Cobalt.
Our core operations, consisting of 11 shafts and inclines, are situated in the Bushveld Igneous Complex in South Africa, a country which hosts nearly 80% of global PGM resources. We have been granted a New Order Mining Licence by the South African government for our core operations, which runs to 2037 and is renewable to 2067. We have resources of 181 million troy ounces (3PGE + Au) and 32 million ounces (3PGE + Au) of reserves.
We conduct all our business in a way which is socially and environmentally responsible and sustainable.
Our values
- Zero harm:
We are committed to zero harm to people and the environment. - Integrity, honesty and trust:
We are committed, ethical people who do what we say we will do. - Transparency:
We believe in open, honest communication and free-sharing of information. - Respect for each other:
We embrace our diversity, enriched by openness, sharing, trust, teamwork and involvement. - High performance:
We seek to stretch our individual and team capabilities to achieve innovative and superior outcomes. - Employee self-worth:
We enhance the quality of life for our employees and their families and promote their well-being and self esteem.
One of Lonmin's mine shafts
In the business and production update published today Lonmin stated the following.
Lonmin Plc (“Lonmin” or “the Company”), one of the world’s largest primary platinum producers, today announces its production results for the three and twelve months to 30 September 2018, including a business update, both on an unaudited basis. Lonmin also released a separate announcement today, on a refinancing of its existing debt facilities.
Overview
- Regrettably we had a fatality on 30 September 2018, ending a 15 month fatality free period at Lonmin’s operations. The twelve-month rolling LTIFR to 30 September 2018 improved by 12.39% to 3.96 per million man hours.
- Unaudited net cash improved to $114 million at 30 September 2018, up from $103 million at 30 September 2017.
- Tonnes mined by our Generation 2 shafts for the year increased 1.6% to 7.6 million tonnes, reflecting consistent performance at our core shafts. The average shaft utilisation capacity for our Generation 2 shafts was 83%, with Saffy shaft achieving an average shaft utilisation of 92% for the year.
- Tonnes mined by our Generation 2 shafts for the fourth quarter of 2.1 million tonnes were broadly flat on Q4 2017.
- Platinum sales of 681,580 ounces for the year exceeded our guidance of between 650,000 and 680,000 Platinum ounces. Platinum sales for the fourth quarter were 217,710 ounces, broadly flat on Q4 2017. Total PGM sales for the full year were 1,323,708 ounces.
- Our unaudited average Rand full basket price (including base metals) for the quarter up 25.5% on Q4 2017 at R14,512 per PGM ounce and up 19.7% for the year, at R13,447 per PGM ounce.
- Our unaudited unit costs for Q4 2018 were R11,617 per PGM ounce (6E basis), an increase of 0.8% on Q4 2017. Unaudited unit costs for the year were R12,271 per PGM ounce, an increase of 4.9% on prior year and within our unit cost guidance of between R12,000 and R12,500 per PGM ounce.
Ben Magara, Chief Executive Officer, said: “Despite tough market conditions, except the favourable Rand, we have delivered more than we promised in all areas of our business. These pleasing results demonstrate once again that despite these uncertain times, we can dig deep and use all levers within our control to maintain our net cash position. Both the good business performance and the new funding arrangement we announced today enhance Lonmin’s short term liquidity. However, the new facility is still insufficient to avoid the announced retrenchments and shaft closures. Accordingly, the Board of Lonmin remains focused on completing the Sibanye-Stillwater all share transaction, which we firmly believe provides a sustainable solution and is in the best interest of all our stakeholders.”
Note the SENS content was taken from Sharenet.co.za
Lonmin Plc (“Lonmin” or “the Company”), one of the world’s largest primary platinum producers, today announces its production results for the three and twelve months to 30 September 2018, including a business update, both on an unaudited basis. Lonmin also released a separate announcement today, on a refinancing of its existing debt facilities.
Overview
- Regrettably we had a fatality on 30 September 2018, ending a 15 month fatality free period at Lonmin’s operations. The twelve-month rolling LTIFR to 30 September 2018 improved by 12.39% to 3.96 per million man hours.
- Unaudited net cash improved to $114 million at 30 September 2018, up from $103 million at 30 September 2017.
- Tonnes mined by our Generation 2 shafts for the year increased 1.6% to 7.6 million tonnes, reflecting consistent performance at our core shafts. The average shaft utilisation capacity for our Generation 2 shafts was 83%, with Saffy shaft achieving an average shaft utilisation of 92% for the year.
- Tonnes mined by our Generation 2 shafts for the fourth quarter of 2.1 million tonnes were broadly flat on Q4 2017.
- Platinum sales of 681,580 ounces for the year exceeded our guidance of between 650,000 and 680,000 Platinum ounces. Platinum sales for the fourth quarter were 217,710 ounces, broadly flat on Q4 2017. Total PGM sales for the full year were 1,323,708 ounces.
- Our unaudited average Rand full basket price (including base metals) for the quarter up 25.5% on Q4 2017 at R14,512 per PGM ounce and up 19.7% for the year, at R13,447 per PGM ounce.
- Our unaudited unit costs for Q4 2018 were R11,617 per PGM ounce (6E basis), an increase of 0.8% on Q4 2017. Unaudited unit costs for the year were R12,271 per PGM ounce, an increase of 4.9% on prior year and within our unit cost guidance of between R12,000 and R12,500 per PGM ounce.
Ben Magara, Chief Executive Officer, said: “Despite tough market conditions, except the favourable Rand, we have delivered more than we promised in all areas of our business. These pleasing results demonstrate once again that despite these uncertain times, we can dig deep and use all levers within our control to maintain our net cash position. Both the good business performance and the new funding arrangement we announced today enhance Lonmin’s short term liquidity. However, the new facility is still insufficient to avoid the announced retrenchments and shaft closures. Accordingly, the Board of Lonmin remains focused on completing the Sibanye-Stillwater all share transaction, which we firmly believe provides a sustainable solution and is in the best interest of all our stakeholders.”
Note the SENS content was taken from Sharenet.co.za
So while the much discussed and reported on "Jobs summit" attempted to get businesses to create jobs and to avoid retrenchments, this has clearly not worked at Lonmin as they indicated today that retrenchments will take place. So much for the jobs summit stopping the rot in South Africa's employment industry. We cannot see the South African government making any real in roads into reducing South Africa's persistently high unemployment rate. For more on South Africa's unemployment rate see our "SA Unemployment" page.