Consmin, a leading manganese ore producer with mining operations in Australia and Ghana, announces its quarterly results for the period ended 30 September 2014.
|Quarter ended||Nine months ended|
|% change||30 Sept
|Manganese ore produced (dry kt)||871.3||891.5||(2.3%)||2,601.8||2,584.7||0.7%|
|Manganese ore sales (dry kt)||583.8||991.4||(41.1%)||2,121.2||2,628.1||(19.3%)|
|Average C1 manganese unit cash cost ($/dmtu)1||2.52||2.45||2.9%||2.43||2.50||(2.8%)|
|Average manganese FOB Sales price ($/dmtu)||3.83||4.84||(20.9%)||4.04||4.91||(17.7%)|
|Revenue ($ million)2||92.7||174.3||(46.8%)||318.0||464.6||(31.6%)|
|Adjusted EBITDA ($ million)2,5||20.7||92.4||(77.6%)||107.7||216.9||(50.3%)|
|‘Cash’ EBITDA ($ million)4,5||1.5||86.9||(98.3%)||61.1||197.6||(69.1%)|
|(Loss)/ profit for the period from continuing operations5||(14.6)||124.1||(111.8%)||4.7||181.6||(97.4%)|
|Unaudited||At 30 Sept 2014||At 31 Dec 2013||% change|
|Cash and cash equivalents ($ million)||85.6||219.9||(61.1%)|
|Gross debt ($ million)||(423.1)||(242.5)||74.5%|
|Gross debt excluding high yield bonds ($ million)||(39.2)||(14.3)||174.1%|
|Net debt/(cash) ($ million)||(337.5)||(22.6)||1393.4%|
“During the third quarter, Consmin delivered steady operational performance. Financial performance for the quarter was substantially lower as a result of the combination of difficult pricing environment, the termination of the TMI contract and its subsequent impact on the sales of Ghana ore.
Manganese C1 cash costs for third quarter were $2.52/dmtu, a slight increase compared to Q3 2013. However, Manganese C1 cash costs year to date in 2014 improved from $2.50/dmtu in 2013 to $2.43/dmtu in 2014 continuing the positive trend seen over the last three years.
In late August, the Company announced the termination of the agreement with TMI as a result of TMI’s breaches and non-performance. The agreement provided the Company with the right to draw down on the $50 million standby letter of credit and the right to bring arbitration proceedings for damages arising from TMI’s conduct. Following the Company’s valid drawdown demand on the standby letter of credit, TMI obtained a temporary injunction, alleging fraud in connection with the LC to prevent payment. The Company regards this allegation as entirely wrong and is actively contesting the decision in the Chinese Courts with the intention of lifting the injunction as soon as practicable. Arbitration proceedings have also commenced against TMI in London in accordance with the terms of the agreement in order to recover losses arising from the situation. We continue to pursue the arbitration proceedings in London and vigorously protest against the standby LC injunction in the Chinese courts.”
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: 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
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 on 14 November 2014 at 1pm GMT (Greenwich Mean Time).
To access the results conference call, you must first register in advance on:
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.