TIDMAMI
RNS Number : 3183L
African Minerals Ltd
03 July 2014
03 July 2014
African Minerals Limited
("African Minerals", "AML", or "the Company")
Q2 2014 and H1 2014 Export Tonnage
African Minerals Limited is a mineral exploration, development
and mining company, and is the developer and operator of the
Tonkolili iron ore mine in Sierra Leone. The Company today provides
an update regarding its production for the first half of 2014 and
the second quarter.
Highlights
-- Q2 export tonnage of 4.52Mt in 26 vessels; (Q1: 4.55Mt in 26 vessels)
-- Revenue capture improving: Discounted All in 32 ("A32") and
Blend tonnage was 61% of products sold in Q2 (Q1: 71%), including
just 11% in June
-- Completion of loading of the Cape Riviera on 22 June
signalled the sailing of the 25,000,000(th) tonne of direct
shipping iron ore from the Tonkolili Project
-- Cape Riviera is also the first formal vessel chartered
in-house by the project on a cost and freight ("CFR") basis and
arranged by our own marine team, with an indicated saving of around
6% over free on board ("FOB") pricing.
-- Exports so far this year to end June of 9.1Mt, on target for full year guidance of 16-18Mt.
In Q2, the fully integrated Tonkolili mine / plant / rail / port
/ marine project shipped 4.52Mt of direct shipping iron ore in 26
cape size vessels, compared to 4.55Mt in the first quarter. The
tonnage was affected by a planned 6 day shutdown at the rail and
port primarily for upgrading of bridges along the railway to
increase track speeds, reduce cycle times and improve asset life.
Of this tonnage 2.7Mt was sold as A32 or lump blend, compared to
3.2Mt in Q1, improving revenue capture. In June, with 9 vessels
completed, all exports were lump and fines, with the exception of
only one vessel of lump blend.
On 22 June the Company completed loading of the Cape Rivera with
182,289t of standard iron ore fines. The completion of loading of
this vessel takes the total material exported from the operation to
over 25Mt since the commencement of loading for export on 2
November 2011.
Prior to the loading of this vessel, a total of 141 Cape Size
ocean going vessels and 5 smaller vessels had been despatched as
standard sales cargoes (excluding test cargoes), entirely on an FOB
basis, where AML receives payment net of the cost of freight for
shipping to the customer.
The Company has previously communicated its strategy of aiming
to better manage the cost of freight by moving some of its exports
to a CFR basis, where the Company assumes the cost of the vessel.
Cape Riviera is the first standard cargo that has been arranged by
the Company's own marine team on a CFR basis, and has shown a
marked reduction in the freight cost incurred. While the indicated
freight cost fix for Cape Riviera was $19.93/t, the net cost of the
rate negotiated for this vessel, adjusted for insurance, was
$18.80/t, a saving of $1.13/t or 6%.
Total tonnes shipped from the project year to date to the end of
June are 9.1Mt, and the project remains firmly on track for its
export guidance of 16-18Mt for the year.
Bernie Pryor, Chief Executive Officer of African Minerals,
said:
"This milestone achievement that the project has reached, of
already selling 25Mt in its operating life, is significant in that
this has been achieved just 30 months after commencement of
exports. Furthermore, exports commenced just 42 months from the
drilling of the discovery hole by the Executive Chairman, and just
15 months from the granting of the mining lease.
This month is also significant since it marks our first
self-arranged CFR cargo, and the 6% saving we have achieved,
potentially in a permanent change, shows the benefit of our stated
strategy of bringing more of our own control into the costly
element of shipping. Marine costs are indeed as much as our
land-side C1 costs, and represent an area which can yield
significant near term savings.
Our sustainable production levels have also reached well over
80% of design capacity within just 12 months of the end of
construction (with the commissioning of the second large wagon
dumper). Production and exports to date remain on track and we are
confident that our various technical improvements - key of which is
the commissioning of our de-sliming circuits as announced last week
- will allow us to continue to produce at our budgeted levels with
enhanced product quality all year round."
Contacts:
African Minerals Limited
+44 20 3435 7600
Mike Jones
Tavistock Communications
+44 20 7920 3150
John West / Jos Simson / Nuala Gallagher
Jefferies
+44 20 7029 8000
Nick Adams / Alex Collins
About African Minerals
African Minerals operates the Tonkolili Iron Ore Project (the
"Project") in Sierra Leone, with a JORC compliant resource of
12.8Bnt. The Project, which currently has a 60+ year mine-life, is
being developed in a number of staged expansions. In 2013, African
Minerals completed sales of 12.1Mt to its customers. The current
year sales guidance is for 16-18Mt of exports as the operations
focus on operating at the 20Mtpa run rate design capacity.
Phase II expansion contemplates the production of an expanded
tonnage including the establishment of a high grade concentrate
product with the project ramping up to 25Mtpa.
The Company has also developed significant port and rail
infrastructure to support the operation of the Project, via its
subsidiary African Rail and Port Services (SL) Limited ("ARPS"), in
which the Government of Sierra Leone ("GoSL") has a 10% free
carried interest.
The Project companies are currently owned 75% by AML, and 25% by
Shandong Iron and Steel Group ("SISG"), except for ARPS, which is
currently owned 75% by AML and 25% by SISG, with the GoSL having
the right to a 10% free carried interest from AML.
www.african-minerals.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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