Second Quarter Report for period ending 30 June 2011

07 Sep 2011
All figures in accordance with IFRS and in United States Dollars, unless otherwise stated

Consolidated Minerals Limited, a leading manganese ore producer, announces its quarterly results for the period ended 30 June 2011.

Key highlights (comparing Q2 2011 to Q2 2010)

  • Consmin demonstrated strong manganese and chromite production for the quarter, which increased by 16.3% and 122.2% respectively, compared to the same quarter of 2010.
  • Due to resilient demand for our premium products during the quarter, our manganese and chromite sales volumes for the quarter increased by 83.0% and 156.3%, respectively, compared to the same quarter of 2010.
  • Continued our excellent safety performance in Australia and Ghana from Q1 2011, with no Lost Time Incidents (‘LTI’) reported in either country in Q2 2011. At Woodie Woodie, Consmin mined greater volumes in April and May 2011 than in the same period in the prior year; however operational difficulties, such as a wall slip at the Demon pit and a flooded loaded shot at Homestead pit, reduced mining volumes in June 2011.
  • Maintained focus and momentum on productivity improvement initiatives at Woodie Woodie, such as completion of the transfer from contractor to owner-operator drilling, which occurred during this quarter.
  • Positive exploration in Ghana in the quarter, with one drill intersection at Hill A resulting in 30m of mineralisation at 30% manganese carbonate.
  • A significant new Woodie Woodie discovery at the Extension Cord project, including an intercept of 36m at 48% manganese.
  • Manganese ore revenues increased by 48.5% to $157.6 million, despite a decrease of 2.6% in the average United States dollar price achieved from $5.06/dmtu FOB in Q2 2010 to $4.93/dmtu FOB in Q2 2011.
  • The Australian dollar strengthened 21.6% between Q2 2010 and Q2 2011 against the US dollar, which had a significantly negative impact on our Australian cost base. This, combined with the lower market price, led to lower gross profit, as well as a non-cash inventory write-down in the Australian operations.
  • Consmin maintained a strong cash position and relatively conservative net debt position at quarter end.

Key Performance Indicators

Quarter ended Six months ended
Unaudited 30 June 2011 30 June 2010 % change 30 June 2011 30 June 2010 % change
Manganese ore produced (dry kt) 787.6 677.5 16.3% 1,581.1 1,357.7 16.5%
Manganese ore sales (dry kt) 883.7 482.9 83.0% 1,683.1 1,121.9 50.0%
Average C1 manganese unit cash cost ($/dmtu)1 3.78 2.93 29.0% 3.65 2.96 23.3%
Average manganese FOB Sales price ($/dmtu) 4.93 5.06 (2.6%) 5.12 5.92 (13.5%)
Chromite ore produced (kt) 76.2 34.3 122.2% 131.6 67.9 93.8%
Chromite sales (kt) 50.5 19.7 156.3% 97.1 44.9 116.3%
Average C1 chromite unit cash cost ($/t)1 250 121 106.6% 263 117 124.8%
Average chromite FOB sales price ($/t) 239 254 (5.9%) 270 231 16.9%
Revenue ($ million) 176.9 163.3 8.3% 348.3 346.0 0.7%
Adjusted EBITDA ($ million)2 31.4 85.3 (63.2%) 90.5 163.0 (44.5%)
Quarter ended Year ended
Unaudited 30 June 2011 31 December 2010 % change
Cash and cash equivalents ($ million) 203.7 97.7 108.5%
Gross debt ($ million) 454.9 66.7 582.0%
Net debt/(cash) ($ million) 251.2 (31.0) (910.3%)

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 unit cash cost are allocation of offsite, non-corporate, 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 less 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. We consider this measure an important indicator of our representative, recurring operations. 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.

Commenting on the results, Glenn Baldwin (CEO of Consmin) said:

“We are pleased to publish our results for Quarter 2 2011, which show increased production and sales levels across both our manganese and chromite operations. The strong increase in our manganese sales re-affirms the value of Consmin’s products to the alloy and manganese metal producers. Our strong sales led to solid revenue for the quarter, exceeding our prior period result, which is a good achievement in the current challenging market in which the benchmark manganese price has remained soft. The appreciation of the Australian dollar against the US dollar has had a very negative impact on our price received in AUD and impact on our Australian cost base; however we are looking to offset the impact going forward with the cost reduction projects we have in progress. During this quarter, Consmin also successfully issued a US$405 million bond, which enables the Company to focus on the extensive exploration potential of our Australian and Ghanaian assets.”

Download the full Second Quarter Report for period ending 30 June 2011 (PDF – 881KB)

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
Glenn Baldwin, CEO
Jackie Callaway, CFO

Conference Call

There will be a conference call for analysts and bondholders on 7 September 2011 at 12 noon London time.

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

The quarterly results conference call, conference ID 95674863, 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.