TIDMLOND
RNS Number : 2271Y
London Mining Plc
22 January 2014
London Mining Plc
Quoted on London AIM (LOND LN)
("London Mining" or the "Company")
22 January 2014
PRODUCTION REPORT FOR THE FOURTH QUARTER ENDED 31 DECEMBER
2013
5.4Mt capacity installed and commissioning
Marampa, Sierra Leone
-- Full year production of 3.4Mwmt, a 108% increase year on
year, in line with revised guidance
-- Full year sales of 3.7Mwmt ahead of our revised range of 3.5
to 3.6Mwmt, a 186% increase year on year
-- Q4 2013 iron ore concentrate production of 770kwmt, down 19%
on Q3 2013 due to prolonged wet season delayed commissioning of
plant upgrades and negative stockpile adjustment
-- Record sales of 1.2Mt in Q4 2013, up 31% on Q3 2013
-- Installed plant capacity increased 40% to 5.4Mwmt/a with
plant upgrades now commissioning
Graeme Hossie, Chief Executive of London Mining said "Despite
the challenges to production and new plant installation experienced
in Q4, as flagged in December, we doubled production and trebled
sales volumes in 2013. We increased installed production capacity
by 40% to 5.4Mwmt/a by the end of 2013 and are commissioning the
plant upgrades which will deliver strong volume growth in
2014."
Marampa, Sierra Leone (100% owned)
Q4 2013 summary
FY % change FY Q4 2013 % change Q3 2013 Q4
2013 2012 2012
------------------------------------------- ----- -------- ----- ------- -------- -------- -----
Concentrate produced
(000 wmt) 3,387 108 1,631 770 -19 948 546
Sales
(000 wmt) 3,655 186 1,279 1,162 41 890 387
Average concentrate grade sold
(Fe%) 63.5 -1.4 64.9 63.1 -0.3 63.4 64.3
Average concentrate moisture content sold
(%) 8.1 1.4 6.7 8.8 0.1 8.7 6.8
Average FOB price * including hedges
(USD/dmt) 93 -11 104 84 -10 93 104
Average freight
(USD/wmt) 32 -18 39 34 17 29 39
----------------------------------------------- ----- -------- ----- ------- -------- -------- -----
*Free on board ("FOB") prices are net of freight and grade
premium but exclude marketing related fees
Production
Production in Q4 2013 was 770kt, down 19% on the previous
quarter, but up 41% on the Q4 2012. As previously disclosed, Q4
2013 was affected by a combination of three events.
The effects of the wet season at Marampa continued into Q4 2013
with lower mining rates causing full depletion of the run of mine
("ROM") stockpile. This significantly impacted our ability to feed
the processing plant with the appropriate ore blend on a consistent
basis. ROM stocks have since been replenished. We will continue to
improve our management of the issues arising from the wet season
during 2014 and expect to enter the 2014 wet season with additional
ROM stocks.
Due to longer commissioning times experienced for mills and a
delay in final completion of the spirals circuit, the contribution
in Q4 2013 from the upgraded 5.4Mwmt/a plant was less than
previously expected. Capacity of 5.4Mwmt/a (5Mdmt/a) is now
installed and commissioning.
Full depletion of the concentrate stockpiles following logistics
upgrades allowed a comprehensive reconciliation of production
volumes with finished product stockpiles and exports which resulted
in a negative 0.1Mt stockpile adjustment to Q4 2013 production
volume. In order to more accurately quantify finished stock in the
future, we are upgrading our weight and moisture monitoring
capability at the final plant conveyors, installing a truck
weighbridge and have recalibrated stockpile survey assumptions.
Iron ore concentrate grades were slightly lower in the quarter
due to the production issues noted above. Grades are expected to
return to the 64 to 65% Fe level when commissioning is complete and
stable operations are achieved.
Expansion
Logistics capacity required for increased production volume is
in place with two of the new pusher and barges to arrive in Q1 2014
to replace the existing fleet of self-propelled barges. Long lead
items for the expansion to 6.5Mwmt/a have been ordered.
Sales, prices and hedging
A marked increase in export volumes was seen over the quarter
with record sales of 1.2Mwmt, up 31% on Q3 and up 186% on Q4 2012.
This increase in exports was due to the draw-down of the
concentrate stockpile and higher utilisation of the augmented
barging and transhipment operation following the end of the wet
season.
As a result of increased demand for bulk cargo vessels over the
year, freight rates for Panamax vessels increased over the quarter
from USD29 to 34/t. Although benchmark iron ore pricing remained
strong over Q4, the average hedged FOB price for the quarter fell
to USD84/dmt (USD93/dmt in Q3 2013) due to a larger proportion of
hedged volumes as well as lower Fe content. The unhedged FOB price
for Q4 was USD93/dmt down from USD101/t in Q3.
In 2013, 2.1Mdmt of sales were hedged at an average price of
USD124/dmt CFR. 1.5Mdmt of 2014 sales had been hedged at an average
price of USD119/dmt CF as at 31 December 2013.
Health and safety
Health and safety performance showed a marked improvement over
the year. Of primary importance there were no fatalities in 2013
and the lost time injury frequency rate of 0.21 compared with 0.96
in 2012. Safety is a critical component of our business and we
continue to focus on reducing risk and improving H&S
performance within our operations.
Q4 2013 Q3 2013 Q2 2013 Q1 2013
------------------------------- -------- -------- -------- --------
Fatalities 0 0 0 0
-------- -------- -------- --------
LTI 0 2 0 0
-------- -------- -------- --------
All Injuries 30 15 12 7
-------- -------- -------- --------
LTIFR (12mth rolling average) 0.21 0.42 0.46 0.94
-------- -------- -------- --------
Graeme Hossie, Chief Executive Officer, and Jim North, Chief
Operating Officer will be hosting an audio webcast and conference
call for analysts and investors today at 8:30am GMT (UK). Details
for the conference call are below:
Audio Webcast
The presentation will be available via a live and on-demand
audio webcast, a link to the audio webcast can be found on London
Mining's website here:
http://www.londonmining.com/investors/reports-and-presentations/.
The webcast will include audio from the conference call. You
will not be able to post questions through the webcast.
Conference call
Please use the following numbers and Conference ID to dial in to
the conference call:
International dial-in +44(0)20 3427 1913
UK Toll Free 0800 279 4992
USA Toll Free 1877 280 1254
Confirmation code 6556289
For more information please visit www.londonmining.com or
contact:
London Mining Plc
Graeme Hossie, Chief Executive Officer
Benjamin Lee, Chief Financial Officer
Thomas Credland, Head of Investor Relations +44 (0)20 7408 7500
Liberum Capital (Nominated Advisor/Broker)
Tom Fyson / Richard Crawley / Ryan de Franck +44 (0)20 3100 2000
J.P. Morgan Cazenove (Broker)
Ben Davies / Ignacio Borrell +44 (0)20 7742 4000
Brunswick Group LLP
Carole Cable / Rosheeka Field +44 (0)20 7404 5959
About London Mining
London Mining is an expanding producer of high specification
iron ore concentrate for the global steel industry and is focused
on identifying, developing and operating sustainable mines. London
Mining commenced sales from its 100% owned Marampa Mine in Sierra
Leone in 2012 and expects to reach production capacity of 6.5Mwmt/a
in 2014. Marampa has sufficient resources to support a staged
expansion to over 10.8Mwmt/a. London Mining has also completed
bankable feasibility studies outlining plans for a further 20Mwmt/a
of iron ore production by developing mines in Greenland and Saudi
Arabia. The Company listed on AIM in London on 6 November 2009. It
trades under the symbols LOND.L (Reuters) and LOND LN (Bloomberg).
More information about London Mining can be found at
www.londonmining.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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