Consmin, a leading manganese ore producer with mining operations in Australia and Ghana, announces its results for the year ended 31 December 2011.
|Manganese ore produced (dry mt)||3.17||2.77||14.4%|
|Manganese ore sales (dry mt)||3.48||2.37||46.8%|
|Average C1 manganese unit cash cost ($/dmtu)1||3.60||3.22||11.8%|
|Average C1 manganese unit cash cost restated to average 2010 FX rate ($/dmtu)2||3.27||3.22||1.6%|
|Average manganese FOB sales price ($/dmtu)||4.98||5.72||(12.9%)|
|Chromite ore produced (mt)||0.32||0.18||78.7%|
|Chromite sales (mt)||0.29||0.15||87.3%|
|Average C1 chromite unit cash cost ($/t)1||233||258||(9.7%)|
|Average chromite FOB sales price ($/t)||247||255||(3.1%)|
|Revenue ($ million)||706.6||639.5||10.5%|
|Adjusted EBITDA ($ million)3||126.7||273.2||(53.6%)|
|‘Cash’ EBITDA ($ million)4||167.5||155.2||7.9%|
|(Loss) /profit for the year||(491.3)||129.6||(479.1%)|
|Cash and cash equivalents ($ million)||155.2||97.7||58.9%|
|Gross debt ($ million)||(417.4)||(66.7)||525.8%|
|Gross debt excluding high yield bonds||(44.0)||(66.7)||(34.0%)|
|Net (debt)/cash ($ million)||(262.2)||31.0||(945.8%)|
“I am pleased to report our results for the full year 2011. Notwithstanding low prices for manganese and chrome, we delivered on our plans to differentiate ourselves from competitors and supply high quality products to the market whilst maintaining our position as a leading manganese focussed mining company.
I am particularly pleased with the overall safety performance of Consmin in 2011 with substantial improvements in the health, safety and training of our management, technical and operational employees. These improvements have resulted in noticeable, on-the-ground productivity and efficiency improvements that will be bedded-down further in 2012 and ultimately culminate in the cultural shift that is required for global owner-mining operations in the manganese business.
Production significantly increased during the year despite operational challenges including the continuing mining boom in Western Australia leading to high staff turn-over rates. Key productivity projects designed to reduce the footprint of mining on the environment were substantially progressed including finalising the trial of lighter trays for larger payloads on mining trucks.
We focussed on managing the controllable costs, with a number of efficiency programmes being implemented during the year such as owner-operator production drilling. The bulk of the $0.38/dmtu C1 cash cost increase to $3.60/dmtu was a result of the Australian currency translation costs into US dollars.
The deterioration in the benchmark price in the second half of 2011 combined with a strong Australian dollar (which resulted in comparable Australian dollar equivalent benchmark manganese prices to that of the 2009 global financial crisis), were the main reasons for significant manganese impairment and the Company’s loss before tax of $491 million. These external pricing elements drove a substantially lower Group adjusted EBITDA of $127 million.
A highlight of 2011 was our ability to restructure our balance sheet through a $405 million bond issuance. The two primary uses of funds were repaying shareholder loans and to secure future funding for key capital projects and brownfields exploration programmes. In addition, our 2011 performance has resulted in increased free-cash flow compared to 2010.
Exploration programmes have continued to produce positive results and we have increased our reserves at our manganese operations, while also publishing the inaugural resources and reserves statement for the Coobina chromite mine. This additional knowledge has greatly improved our mine forecasting ability and will assist in delivering on further mine planning efficiencies and cost savings.
Our trading operations were established in Jersey during the year and the team has successfully delivered demand-growth for our ores. We have specifically tailored our products to the needs of our customers to maximise value. In addition, we have established ourselves as a consistent supplier to the EMM market. This trading focus has resulted in Consmin becoming a dominant supplier of manganese ores to China and we were able to regularly achieve prices which were in excess of the benchmark manganese price.
Looking at the year ahead, we have a clear focus on, once again, controlling our costs and improving the efficiency of our operations. The continued development of our people and the transition to owner-operation at our Woodie Woodie mine are key deliverables to achieve this plan.”
Consmin is a leading manganese ore producer with mining operations in Australia and Ghana. The principal activities of the Company and its subsidiaries (the “Group”) are the exploration, mining, processing and sale of manganese products. The Group’s operations are primarily conducted through four major subsidiaries; Consolidated Minerals Pty Limited (Australia), Ghana Manganese Company Limited (Ghana), Manganese Trading Limited (Jersey) and Pilbara Trading Limited (Jersey).
Consolidated Minerals Limited is headquartered in Jersey and the address of its office is Commercial House, 3 Commercial Street, St Helier, Jersey, Channel Islands, JE2 3RU.
For further information, please visit our website www.consmin.com or contact:
+44 (0) 1534 513 300
Glenn Baldwin, CEO
Jackie Callaway, CFO
There will be a conference call for analysts and bondholders on 26 April 2011 at 4pm BST (British Summer time).
To access the annual results conference call, you must first register in advance on:
The annual results conference call, conference ID 69859625, can then be accessed by dialling:
UK: +44 (0) 1452 580 655