Report for the First Quarter ending 31 March 2014

23 May 2014
All figures in accordance with IFRS and in United States Dollars, unless otherwise stated

Consmin, a leading manganese ore producer with mining operations in Australia and Ghana, announces its quarterly results for the period ended 31 March 2014.

Key highlights

  • Manganese ore production for Q1 2014 was 4% higher than in Q1 2013. Australian manganese ore production remained the same and Ghana manganese ore production increased 7% compared to Q1 2013.
  • Manganese C1 cash costs improved from $2.62/dmtu in Q1 2013 to $2.29/dmtu in Q1 2014 continuing the downward trend seen over the last three years. The reduction in C1 cash costs is due to the phasing of the mine plan, cost reductions in haulage and shiploading, and foreign exchange benefits from the relative weakening of the Australian dollar.
  • Manganese sales tonnes decreased 16% in Q1 2014 due to adverse weather conditions in Australia delaying haulage, and as a consequence, shipments. In Ghana there were shipping capacity restrictions as a result of the transition to the transhipment arrangements that successfully took place during the quarter. The Company expects these volume shortfalls to be fully caught up during the remainder of the year.
  • Average manganese FOB sales price achieved decreased 4.8% from $4.84 in Q1 2013 to $4.61 in Q1 2014.
  • Average manganese ore price for Q1 2014 (CRU, 44%Mn CIF China) was $5.08/dmtu, down 3% from $5.25/dmtu in Q4 2013. The Company’s average price for its Australian 46%Mn lump product, CIF China, was $5.67/dmtu in Q1 2014, up 1% from $5.60/dmtu in Q4 2013.
  • Adjusted EBITDA for Q1 2014 was $48 million, a decrease of $5 million compared to Q1 2013.
  • The Group recorded a profit for the period of $24 million, on par with profit in Q1 2013.
  • During the quarter the Company generated positive operating cashflow of $31 million. Cash and cash equivalents increased during the quarter by $9 million to $229 million with net debt falling in the quarter from $23 million at 31 December 2013 to $3 million on 31 March 2014.
  • During the quarter the Company spent $10 million on the repurchase of its bonds. On 1 May 2014 the Company redeemed $112.5 million of the outstanding $225.0 million notes outstanding. On 12 May 2014, the Company issued $400 million in principal amount of 8.0% senior secured notes due 2020. A part of the net proceeds of the issue will be used to repurchase the remaining $112.5 million of 8.875% senior secured notes due 2016 (refer to note 14).
  • In July 2013 the Company ceased mining at its Coobina chromite mine and final sales of chromite ore concluded in Q1 2014. Coobina has been reclassified as a discontinued operation in the statement of comprehensive income for Q1 2014 and Q1 2013.

Key Performance Indicators

Quarter ended
Unaudited 31 March 2014 31 March 2013 % change
Manganese ore produced (dry kt) 859.7 830.3 3.5%
Manganese ore sales (dry kt) 669.9 800.5 (16.3%)
Average C1 manganese unit cash cost ($/dmtu)1 2.29 2.62 (12.6%)
Average manganese FOB Sales price ($/dmtu) 4.61 4.84 (4.8%)
Revenue ($ million)5 108.9 140.7 (22.6%)
Adjusted EBITDA ($ million)2,5 47.9 52.4 (8.4%)
‘Cash’ EBITDA ($ million)4,5 31.1 50.3 (38.2%)
Profit for the period from continuing operations5 24.3 24.4 (0.4%)


Unaudited At 31 March 2014 At 31 December 2013 % change
Cash and cash equivalents ($ million) 236.0 219.9 7.3%
Gross debt ($ million) (238.6) (242.5) (1.6%)
Gross debt excluding high yield bonds ($ million) (14.1) (14.3) (1.4%)
Net debt/(cash) ($ million) (2.6) (22.6) (88.5%)
  1. 1Average C1 manganese or chromite unit cash cost represents the cash cost incurred at each processing stage from mining through to shiploading, over the total manganese dmtus or chromite tonnes produced. Included within the C1 manganese and chromite unit cash costs are an allocation of offsite, non-corporate and support services. Depreciation, government royalty payments, deferred stripping adjustments and stockpile movements are not included in the calculation.
  2. 2“Adjusted EBITDA” is defined as operating profit before depreciation and amortisation, impairment write-back/expense, net foreign exchange gain/loss, non-cash inventory write-downs and exceptional items3 . This is the key profitability measure used across the business and reflects performance in a consistent manner and in line with how the business is managed and measured on a day to day basis. Adjusted EBITDA is not a uniformly or legally defined measure and is not recognised under IFRS or any other generally accepted accounting principles. Other companies in the mining industry may calculate this measure differently and consequently, our presentation of Adjusted EBITDA items may not be readily comparable to other companies’ figures.
  3. 3Exceptional items are material or non-recurring items excluded from management’s assessment of profits because by their nature they could distort the Group’s underlying quality of earnings. These are excluded to reflect performance in a consistent manner and in line with how the business is managed and measured on a day to day basis.
  4. 4‘Cash’ EBITDA is defined as Adjusted EBITDA after removing the impact of the non-cash items of deferred stripping and net movement in inventories.
  5. 5Balances related to 2013 have been restated to exclude discontinued operations (refer to note 6).

Commenting on the results, David Slater (CFO of Consmin) said:

During the first quarter Consmin delivered solid operational and financial performance with EBITDA of $48 million and a profit after tax of $24 million.

Manganese sales tonnes decreased 16% in Q1 2014 due to the combination of adverse weather conditions in Australia and the transition to the transhipper arrangements in Ghana that were successfully completed in February 2014.

Volumes of manganese ore produced were 3.5% higher as a result of strong operational performance in Australia and Ghana with manganese C1 cash costs continuing to reduce to $2.29 per dmtu as a result of phasing of the mine plan, further cost reductions in haulage and shiploading and foreign exchange benefits from the relative weakening of the Australian dollar.”

Download the full First Quarter Report for period ending 31 March 2014 (PDF – 888KB)

About Consolidated Minerals Limited

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.

Company Information

For further information, please visit our website or contact:


+44 (0) 1534 513 300

Mark Camaj, General Manager, Marketing
Jurgen Eijgendaal, Managing Director, Ghana
Paul Muller, Managing Director, Australia
David Slater, CFO

Conference Call

There will be a conference call for analysts and bondholders on 23 May 2014 at 1pm BST (British Summer Time).

To access the quarterly results conference call, you must first register in advance on:

Market, Economic and Industry

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.

Forward looking statements

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.