Consmin, a leading manganese ore producer with mining operations in Australia and Ghana, announces its annual results for the year ended 31 December 2014.
|31 December 2014||31 December 2013||% change|
|Manganese ore produced (dry kt)||3,194.5||3,443.8||(7.2%)|
|Manganese ore sales (dry kt)||2,786.1||3,606.8||(22.8%)|
|Average C1 manganese unit cash cost ($/dmtu)¹||2.46||2.52||(2.4%)|
|Average manganese FOB Sales price ($/dmtu)||3.98||4.81||(17.3%)|
|Revenue ($ million)4||420.8||618.3||(31.9%)|
|Adjusted EBITDA ($ million)2,4||127.1||290.8||(56.3%)|
|‘Cash’ EBITDA ($ million)2,4||80.3||261.3||(69.3%)|
|(Loss) / profit for the period from continuing operations4||(7.3)||149.6||(104.9%)|
|At 31 December 2014||At 31 December 2013||% change|
|Cash and cash equivalents ($ million)||82.1||219.9||(62.7%)|
|Gross debt ($ million)||(428.6)||(242.5)||76.7%|
|Gross debt excluding high yield bonds ($ million)||(44.0)||(14.3)||207.7%|
|Net debt ($ million)||(346.5)||(22.6)||1,433.2%|
“During the year, Consmin delivered steady operational performance. Financial performance for the year, however, was substantially lower as a result of the combination of a difficult pricing environment, the termination of the TMI contract and its subsequent impact on the sales of Ghanaian ore.
Following the termination of the TMI agreement in August 2014, as a result of TMI’s breaches and non-performance, the Company made a drawdown demand on the $50 million standby letter of credit and commenced arbitration proceedings in London in order to recover its losses. TMI obtained a temporary injunction in China, alleging fraud in order to prevent payment under the standby letter of credit. The Company continues to contest this injunction in the Chinese Courts with the intention of lifting it. The Company continues to pursue the arbitration proceedings in London.
Manganese C1 cash costs for year were $2.46/dmtu, a decrease of 2% from $2.52/dmtu for 2013 and 25% lower than the $3.28/dmtu seen for 2012. The reduction in the 2014 C1 cash costs was a positive achievement, considering the change in the Ghanaian production profile following the termination of the TMI contract, which led to an increase in mine site costs per unit. C1 cash costs in 2014 benefited from foreign exchange due to the impact of the relative weakening of the Australian dollar.
In May 2014, the Company successfully completed the issuance of $400 million in principal amount of 8.0% senior secured notes due 2020, thereby extending the maturity profile of the Group. The net proceeds of the issue were used in part to repurchase the remaining senior secured notes due 2016 with a further $250 million used to partially repay the shareholder loans.
Consmin is cautious in its expectation for 2015 due to weakening Chinese market sentiment in the manufacturing and steel sectors putting downward pressure on manganese alloys demand. Consmin held its prices stable in January 2015; however, the market prices decreased in February, and have remained under pressure since. The price declines in manganese ore are due in part to the combination of the depreciation of currencies in Australia and South Africa against the US dollar, lower fuel and freight costs, which have lowered operating and transporting costs for miners.”
Consmin is a leading manganese ore producer within 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 operating/trading subsidiaries; Pilbara Manganese 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
Mark Camaj, General Manager, Marketing
Jurgen Eijgendaal, Managing Director, Ghana
Paul Muller, Managing Director, Australia
David Slater, Executive Director and CFO
There will be a conference call for analysts and bondholders, the details of which will be released on the Company website www.consmin.com.
Market, economic and industry data used throughout this report has been derived from various industry and other independent sources. Industry publications, surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed and such industry forecasts may not have been updated. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward looking statements contained in this report.
This report includes “forward-looking statements” that express or imply expectations of future events or results. Forward-looking statements are statements that are not historical facts. These statements include, without limitation, financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future production, operations, costs, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words ‘plans,’ ‘expects,’ ‘anticipates,’ ‘believes,’ ‘intends,’ ‘estimates’ and other similar expressions.
All forward-looking statements involve a number of risks, uncertainties and other factors. Although Consmin’s management believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of Consmin, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements contained in this report. Factors that could cause or contribute to differences between the actual results, performance and achievements of Consmin include, but are not limited to, political, economic and business conditions, industry trends, competition, commodity prices, changes in regulation, currency fluctuations (including the Australian dollar and US dollar exchange rates), Consmin’s ability to recover its reserves or develop new reserves, including its ability to convert its resources into reserves and its mineral potential into resources or reserves, and to timely and successfully process its mineral reserves which may or may not occur. Consmin is also exposed to the risk of trespass, theft and vandalism, changes in its business strategy, as well as risks and hazards associated with the business of mineral exploration, development, mining and production. Accordingly, investors should not place reliance on forward looking statements contained in this report.
The forward-looking statements in this report reflect information available at the time of preparing this report. Subject to the requirements of the applicable law, Consmin explicitly disclaims any obligation or undertaking publicly to release the result of any revisions to any forward- looking statements in this report that may occur due to any change in Consmin’s expectations or to reflect events or circumstances after the date of this report. No statements made in this report regarding expectations of future profits are profit forecasts or estimates, and no statements made in this report should be interpreted to mean that Consmin’s profits for any future period will necessarily match or exceed the historical published profits of Consmin or any other level.