Report for the Second Quarter ending 30 June 2012

29 Aug 2012
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 30 June 2012.

Key highlights

  • Although Manganese sales tonnes were slightly down (7%) in Q2 2012, compared to Q2 2011, chromite sales over the same period increased by 191%. Sales volumes increased from Q1 2012 to Q2 2012 by 42%.
  • During the quarter, strong market fundamentals contributed to falling Chinese port stocks’ which resulted in the benchmark price increasing from the previous quarter by 8% with June shipments at US$5.15/dmtu for manganese lump CIF China 45.5% grade material. A further increase of 4% occurred in July with this price rolling over into August and September.
  • Revenue decreased by 7% from Q2 2011 as a result of lower manganese pricing partially offset by increased chromite volumes.
  • In line with the mine plans, Australian manganese ore production increased 2% and Ghana manganese ore production increased 19% in Q2 2012 compared to Q2 2011. Overall, total manganese ore produced in Q2 2012 was 10% higher compared to Q2 2011.
  • Manganese C1 cash costs in Q2 2012 were down 21% to $3.00/dmtu, compared to Q2 2011. After normalising for the previous strengthening of the Australian dollar C1 cash costs were down 16% to $3.12/dmtu. C1 cash costs have continued to reduce each quarter over the last five quarters from a peak of $3.78 in Q2 2011 to $3.00 in Q2 2012.
  • Consmin continues to focus on safety and is pleased to report a Lost Time Injury free quarter.

Key Performance Indicators

Quarter ended Six months ended
Unaudited 30 June 2012 30 June 2011 % change 30 June 2012 30 June 2011 % change
Manganese ore produced (dry kt) 865.8 787.6 9.9% 1,621.9 1,581.1 2.6%
Manganese ore sales (dry kt) 825.4 883.7 (6.6%) 1,405.9 1,683.1 (16.5%)
Average C1 manganese unit cash cost ($/dmtu)1 3.00 3.78 (20.6%) 3.12 3.65 (14.5%)
Average C1 manganese unit cash cost restated to 3.12 3.70 (15.7%) 3.12 3.65 (14.5%)
corresponding average 2011 FX rate ($/dmtu) 1
Average manganese FOB Sales price ($/dmtu) 4.35 4.93 (11.8%) 4.19 5.12 (18.2%)
Chromite ore produced (kt) 110.8 76.2 45.4% 222.4 131.6 69.0%
Chromite sales (kt) 134.5 46.2 191.1% 210.0 92.8 126.3%
Average C1 chromite unit cash cost ($/t)1 222 250 (11.2%) 207 263 (21.3%)
Average chromite FOB sales price ($/t) 231 261 (11.5%) 221 282 (21.6%)
Revenue ($ million) 164.2 176.9 (7.2%) 262.2 348.3 (24.7%)
Adjusted EBITDA ($ million)2 17.4 31.5 (44.8%) 22.1 90.6 (75.6%)
‘Cash’ EBITDA ($ million)3 38.6 35.1 10.0% 18.0 77.8 (76.9%)
Profit / (loss) for the period 6.6 (20.8) (131.7%) (5.0) 1.2 (516.7%)


Quarter ended Year ended
Unaudited 30 June 2012 31 December 2011 % change
Cash and cash equivalents ($ million) 117.5 155.2 (24.3%)
Gross debt ($ million) (359.9) (417.4) (13.8%)
Gross debt excluding high yield bonds ($ million) (6.8) (44.0) (84.5%)
Net debt/(cash) ($ million) (242.4) (262.2) (7.6%)

1 Average 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 Adjusted EBITDA is defined as operating profit before depreciation and amortisation, impairment write-back/expense, net foreign exchange gain/loss and non-cash inventory write-downs. Adjusted EBITDA is not a uniformly or legally defined measure and is not recognised under IFRS or any other generally accepted accounting principles. The Directors use this measure as an indicator of our representative, recurring operations and to reflect how the business is managed and measured. Other companies in the mining industry may calculate this measure differently and consequently, our presentation of Adjusted EBITDA may not be readily comparable to other companies’ figures.

3 ‘Cash’ EBITDA is defined as Adjusted EBITDA after removing the impact of the non-cash items of deferred stripping and net movement in inventories.

Commenting on the results, Jackie Callaway (CFO of Consmin) said:

“Manganese C1 cash costs continued to reduce as a result of the successful implementation of cost reduction initiatives. The transition to owner operator has now been completed with a successful transition to business as usual operations.

Consmin has again produced a strong operational performance in the quarter with a 10% increase in the volumes of manganese ore produced and a 45% increase in the volume of chromite ore produced compared to the same quarter of the previous year.

Total sales volumes of manganese and chromite ore in the quarter increased by 3% compared to the same quarter of the previous year. Manganese sales volumes were slightly lower in the quarter and chromite sales volumes almost trebled. Revenues fell compared to the same quarter in the prior year, driven by the lower sales prices for manganese and chromite ore, offset by the increase in chromite volumes sold. During the quarter, improved Chinese steel sentiment combined with reduced Chinese port stocks’ resulted in an increase in the benchmark price in the quarter by 8%. A further increase in price of 4% occurred for July shipments with this price being maintained for August and September.”

Download the full Second Quarter Report for period ending 30 June 2012 (PDF – 770KB)

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
Jackie Callaway, CFO
Peter Allen, Managing Director, Marketing
Paul Muller, Managing Director, Australia
Jurgen Eijgendaal, Managing Director, Ghana

Conference Call

There will be a conference call for analysts and bondholders on 29 August 2012 at 10am BST (British Summer Time).

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

The quarterly results conference call, conference ID 20815036, can then be accessed by dialling:
UK: +44 (0) 1452 580 655

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.