Consmin, a leading manganese ore producer with mining operations in Australia and Ghana, announces its quarterly results for the period ended 31 March 2017.
|Unaudited||31 March 2017||31 March 2016||% change|
|Manganese ore produced (dry kt)||814.0||389.7||108.9%|
|Manganese ore sales (dry kt)||868.9||490.2||77.3%|
|Average C1 manganese unit cash cost ($/dmtu)1||1.25||1.74||(28.2%)|
|Average manganese FOB Sales price ($/dmtu)||2.45||1.44||70.1%|
|Revenue ($ million)||59.2||21.4||176.6%|
|Adjusted EBITDA ($ million)2||18.0||(8.9)||(302.2%)|
|‘Cash’ EBITDA ($ million)2||17.6||(11.2)||(257.1%)|
|Profit / (loss) for the period from continuing operations||4.8||(33.2)||(114.5%)|
|At 31 March 2017||At 31 December 2016||% change|
|Cash and cash equivalents ($ million)||43.3||40.0||8.2%|
|Gross debt ($ million)||(414.5)||(414.9)||0.1%|
|Gross debt excluding high yield bonds ($ million)||(6.0)||(7.1)||15.5%|
|Net debt ($ million)||(371.2)||(374.9)||1.0%|
“The acquisition of Consmin by TMI represents the start of an exciting new chapter in the history of the Company. TMI and Consmin are jointly building a strong multinational conglomerate with the ability to develop and grow its production and processing capabilities. Management expect to continue operating Consmin in the interests of all stakeholders and look forward to implementing TMI’s growth plans for the Company.
During the quarter Consmin’s operational performance improved with a 109% increase in Group production compared to the corresponding period in 2016.This was driven by a 117% increase in Ghanaian ore production following a ramp-up of output to meet the strong demand for this product. Australian ore production also increased by 74% compared with production in the first quarter of 2016 following the decision in November 2016 to process selective stockpiles of low grade ore which commenced in January 2017. Australian production in Q1 2016 was limited as a result of the Company’s decision to suspend operations at the Woodie Woodie mine with effect from 2nd February 2016 and commence the transition into care and maintenance.
The manganese C1 unit cash cost for the quarter was $1.25/dmtu, an improvement of 20% from $1.74/dmtu for Q1 2016.
The company’s manganese ore shipments totalled 869k dry tonnes during Q1 2017, an increase of 77% compared to Q1 2016. Sales of Ghanaian manganese ore rose 97% to 823k dry tonnes, a record for quarterly shipments from the Nsuta mine, compared to 418k dry tonnes in Q1 2016. During the quarter the Ghanaian customer base was reasonably well diversified, and included sales to our long-term customers TMI and Ukraine and also to buyers from the Chinese alloy and EMM/EMD sectors. Shipments of Australian manganese were only 46k dry tonnes in Q1 2017, a decrease of 37% compared to Q1 2016 with the Woodie Woodie mine remaining on care and maintenance with sales during the Q1 2017 being from the processing of lower grade stockpiles.
The benchmark quarterly average price for manganese ore (CRU, 44%Mn CIF China) in Q1 2017 was $5.78/dmtu, an increase of 180% year on year from $2.07/dmtu in Q1 2016, but down 26% from an average of $7.76/dmtu in the previous quarter (Q4 2016). By the end of March, however, manganese prices for high grade ores fell to circa $4.00/dmtu but rose again in April and May as traders in China decided to hold back port stockpile sales.
Although much improved from Q1 2016, the manganese ore market still remains fragile as China’s ore imports have averaged 2.0 million tonnes per month in the first quarter and port stocks have remained at over 3.0 million tonnes. Manganese ore supply has been abundant and should demand for ore begin to soften, ore prices are likely to come under renewed downward pressure, unless new shipments from global suppliers are cut significantly and port stocks are reduced. As a result of these uncertain factors, volatility in manganese ore pricing is expected to persist throughout the remainder of 2017, with much depending on the performance of China’s steel industry and supplier response to any negative changes in the Chinese steel market.
The Company ended 2016 with net cash and cash equivalents of $40 million and has maintained liquidity at similar levels during Q1 2017 with net cash and cash equivalents having increased to $43 million at 31 March 2017.”
Download the full Report for the 3 months to 31 March 2017 (PDF) – Consmin Quarterly Report – Q1 2017
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 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:
Mark Camaj, General Manager, Marketing
Jurgen Eijgendaal, Managing Director, Ghana
David Slater, Executive Director and CFO
There will be a conference call for analysts and bondholders, the details of which are released through 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 process its mineral reserves successfully and on a timely basis. 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.