Petmin to report lower H1 earnings
JOHANNESBURG (miningweekly.com) - Johannesburg- and London-listed junior miner Petmin on Friday said it expected its earnings per share (EPS) from continuing operations to fall by about 16% for the six months ending December.
EPS were estimated to be 5.20c, down on the 8.15c achieved during the previous corresponding period. Headline earnings a share (HEPS) were estimated to be about 5.20c, down from 8.15c in the six months ended December 2011.
The company stated in a trading update that it expected to post an aftertax profit of R30-million for the six months.
This was partly owing to the company’s R259-million sale of its SamQuarz silica mine, near Delmas, in Mpumalanga, to a subsidiary of Spain’s Grupo FerroAtlantica.
Earnings for the reporting period at Petmin’s wholly owned subsidiary Tendele Coal Mining were affected by a 15-day unprotected strike by contractor employees at the Somkhele anthracite mine, in KwaZulu-Natal, as well as excessive rainfall – which resulted in the loss of 27 working days. This meant that a total of 42 production days were lost at Somkhele.
Combined, the production interruptions resulted in a 27% loss in production to 293 765 saleable tons.
Despite the difficult operating conditions, the group’s operations generated about R160-million of cash during the six months, up from R200-million in the corresponding period the year before.
Petmin’s management was confident that the challenges at the Tendele mine have been largely overcome and was operating at its budgeted production levels.
In the financial year to end June 30, 2013, Petmin anticipated Tendele to sell about 876 000 t of anthracite produced from Somkhele, down from the previous estimate of 900 000 t.
The diversified miner, however, stated that the benefit of the commissioning of the third wash plant at the mine, in February would become evident in the sales of energy products.
During the period under review an extension to an existing mining right was obtained for the Somkhele mine’s Luhlanga area that held 11.9-million tons of measured resources.
The Luhlanga mining area was anticipated to reach production in April.
Petmin expected production from Somkhele to increase significantly in the six months ending June 30, as production levels improved and the anthracite market showed reasonable demand at prices better than during the previous six months.
The company further indicated that it would, in March, provide feedback on progress made at the North Atlantic Iron Corporation (NIAC) pig iron project, in Canada's Labrador province.
In August last year, Petmin announced that it had increased its stake in NIAC from 17% to 22.5%, based on the project's technical and economic viability.
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