JOHANNESBURG (miningweekly.com) – The share price of platinum miner Lonmin surged more than 10% on Monday as the company reported good production and financial results for the 2013 financial year.

The platinum miner produced 751 000 oz of platinum in concentrate in the year ended September 30 – a 10.5% increase year-on-year – while platinum sales of 696 000 oz exceeded the company’s guidance of 660 000 oz.

Revenues amounted to $1.52-billion, compared with $1.61-billion in the year before.

Lonmin further reported a pretax profit of $140-million, compared with a pretax loss of $698-million in the previous financial year, while earnings a share for the year under review amounted to 31.2c, compared with a loss a share of 107.7c.

The company’s share price rose to a high of R59.09 a share, up more than 10% on Friday’s close of R53.60 a share. However, the company’s shares were trading at R56.55 a share at 17:40 – up 5.5% on Friday’s close.

Liberum Capital mining analyst Ben Davis noted that the platinum miner had produced a good set of results, driven by a strong operational performance unimpeded by any significant strike actions.

However, he warned that the threat of major strike action over wage negotiations remained a “clear and present danger”.

“Our expectation remains for GlencoreXstrata to dividend out its holding in Lonmin to its own shareholders in the short to medium term, creating a significant overhang on the share price,” he added.

Meanwhile, Lonmin CEO Ben Magara told journalists and analysts in a conference call on Monday that the company had set a great foundation on which to build its operational credibility.

He noted that this improvement would also require a fundamental change in the company’s employee engagement and stakeholder relationships, following last year’s events, which saw Lonmin’s Marikana mine erupt into violent labour unrest that resulted in the deaths of 46 people.

“We have worked hard to mend relationships with employees and communities but this is work in progress and I want to see a step change here. My first few months as CEO were spent meeting and engaging with [most] of our employees and other key stakeholders.

“One of my priorities is to accelerate the important work of improving the wellbeing and living conditions of our employees and communities through our focus on specific programmes in health, education, financial literacy, housing and social infrastructure,” he said.

He added that the Lonmin board had set housing as one of company’s priorities as housing and social infrastructure were areas where the company should be more ambitious and where it should accelerate delivery.

Magara stated that the company had the opportunity, through the Mining Charter, to increase the equity participation to include its employees and communities so that they could benefit.

He added that 2013 saw more significant and welcome interventions from government in many areas and a more collaborative approach from industry and stated that progress was being made in bringing about renewed peace, stability and a predictable mining environment, which was critical for business to thrive.

Meanwhile, for the 2014 financial year, Lonmin maintained its sales guidance at in excess of 750 000 oz and its capital expenditure at $210-million.