Smelter shutdowns cut a big chunk of refined platinum out of Lonmin’s production in the three months to December 31, when the company’s overall platinum-group metals (PGM) output slumped by 31.1%.

The world’s third-largest plati-num producer managed, however, to record 9% higher sales to 146 890 oz and 11.7% higher over-all PGM production to 274 425 oz.

The London- and Johannes-burg-listed platinum major is maintaining its forecast of 730 000 oz for the year and reducing its capital expenditure from $250-million to $185-million, which has won analyst applause.

But Investec Securities mining analysts Hunter Hillcoat and Marc Elliott made it clear in a note that they were not enamoured with the company’s current business plan.

“It’ll require drastic surgery,” they said.

Q1 underground production was the highest since 2011 and saleable metal-in-concentrate of 200 170 oz is the highest since 2007.

Lonmin expects to be able to process the concentrate build-up by the end of September.

Concentrator recoveries in Q1 were lower at 87.1%.

The closure of the leaking Number One furnace for repair lowered refined Q1 output by 28.8% to 139 823 oz and total PGM production fell to 265 128 oz.

The Number Two furnace is also down because of electrode breaks.

“We’re making good progress with repairs,” the company, headed by CEO Ben Magara, said in a media release.

While the dollar basket price was 7.1% lower at $1 033/oz in Q1, the rand basket price of R11 488/oz was 1.7% higher on currency weakness.

Lonmin has been fatality free for the fourth successive quarter and its lost-time-injury frequency rate for the 12 months to December 31 improved by 2.7% to 3.58 incidents a million person hours, compared with 3.69 in 2013.

The Marikana underground mining operations produced 2.7-million tons during the first quarter, an increase of 7.9%, or 0.2-million tons, on the prior year period.

Production at Karee was 1 124 000 t, with the biggest K3 shaft increasing production by 8.2%.

Production at Westerns was 1 045 000 t, an increase of 3%, and the second largest Rowland shaft, increased production by 1.4%.

The Newman shaft delivered a 9% increase and the Hossy shaft a 4.9% increase.

Production at Easterns rose 22.3% and production at Saffy shaft rose 30.1%.

Production at Pandora rose 30.5% and produc-tion at Merensky opencast opera-tions was 28.2% lower than the prior year period as this operation is reaching the end of its life.

Total tons milled in Q1 increased by 9.5% to 3.1-million tons and the underground milled head grade increased slightly to 4.55 g/t.

Lonmin expects its net borrow- ings to be higher at the end of March as a direct result of the lower sales volume.

The company is confident of managing its work-ing capital requirements through cost conservation measures and capital discipline.