Lonmin surges as Q3 production jumps

Michele Maatouk Sharecast | 17 Jul, 2017 11:11 - Updated: 11:11 | | |

  • 91.00
  • -0.00%-0.00
  • Max: 91.00
  • Min: 85.25
  • Volume: 1,427,920
  • MM 200 : n/a
17:21 24/07/17
  • 15,559.10
  • -0.75%-117.57
  • Max: 15,734.09
  • Min: 15,424.76
  • Volume: 0
  • MM 200 : n/a
17:21 24/07/17
  • 5,685.47
  • 0.31%17.80
  • Max: 5,685.47
  • Min: 5,626.71
  • Volume: 0
  • MM 200 : n/a
17:21 24/07/17
  • 4,042.69
  • -0.91%-36.93
  • Max: 4,079.67
  • Min: 4,030.95
  • Volume: 0
  • MM 200 : n/a
17:30 24/07/17

Lonmin shares surged on Monday as it reported a 3.8% jump in production on the year in the quarter to 30 June.

Production rose to 2.7m tonnes, which is a 13.2% increase from the second quarter of 2017, while net cash improved to $86m from $75m at the end of the second quarter.

Tonnes mined from the company's Generation 2 shafts, which generate 84% of its output, were up 9% to 2.2m tonnes compared with the prior year period and 18.6% higher versus the second quarter. Sales of 180,348 platinum ounces increased by 10.8% on the prior year period and the platinum miner maintained its full-year sales guidance of 650,000 ounces to 680,000 ounces.

Lonmin added that as a result of "the much improved mining performance", unit costs fell by 4.7% quarter-on-quarter to R11,278 per platinum group metal ounce and increased 6.4% year-on-year, slightly above inflation.

Chief executive officer Ben Magara said: "We had a pleasing operational performance all round and continue with our decisive work and aim to be at least cash neutral even at current low PGM prices and a strong rand. I am pleased that with the right team in place, our mining turnaround has been sustained. I am grateful to our employees who have worked hard to produce the results we are seeing.

"We continue to find levers to pull, in this 'lower prices for longer' environment and to make the improvement of our performance a priority. I am particularly pleased that our net cash has improved. Despite the difficult global macro-economics and the complex and challenging socio political operating environment, we are still able to find common ground for Lonmin to deliver this sustained improved performance."

Shore Capital said production was better than expected but suggested that the improved cash position may have been at the expense of capex and longer-term production.

At 1110 BST, the shares were up 8.5% to 73.25p.

More news

24 Jul US close: Markets finish mixed, Alphabet beats earnings forecast

US stocks finished mixed on Monday as investors awaited corporate news from the likes of Alphabet ahead of what promises to be a busy week on the earnings front.

24 Jul FX round-up: Slow news day pushes dollar index higher, euro moves fail to excite

News of any major impact was a bit thin on the ground on Monday, leading to subdued moves on the FX market.

24 Jul Commodities: Oil gains as caps to production agreed by JMMC

After suffering heavy losses at the end of last week, oil received a push higher on Monday on the back of talks in Russia between OPEC and non-OPEC countries regarding global output and price stability.

24 Jul UK to invest £246m in research and development into energy storage

On Monday, redT energy reported a £246m investment from the Department of Business, Energy and Industrial Strategy (BEIS) to aid in energy storage in the UK.

24 Jul FTSE 250 movers: Miners Acacia and Petra dig midcaps deeper

The FTSE 250 fell on Monday, though not as much as its larger sibling, with two miners leading the retreat.

24 Jul London close: FTSE ends in the red as airlines hit by Ryanair Brexit warning

London stocks ended in the red on Monday, with airlines under the cosh as Ryanair warned over the potential fallout from Brexit.

24 Jul Europe close: Stocks end mostly lower as autos skid

European stocks ended mostly lower on Monday, with autos under the cosh as investors digested the latest data on the eurozone manufacturing and services sectors.

24 Jul Tuesday preview: Provident Financial in focus, though Victrex could surprise

Tuesday will see the number of companies reporting step up before the throttle is turned right up later in the week, with Croda International, Informa and Segro joined by sub-prime lender Provident Financial following its recent profit warning.

24 Jul Acacia Mining hit with USD190bn tax bill from Tanzanian government

Acacia Mining has been sent a tax bill from the Tanzanian authorities totalling around $190bn for unpaid tax and penalties from its Bulyanhulu and Buzwagi mines in the country, which the London-listed company disputes.

24 Jul Tesco to launch same day grocery delivery service across UK

Tesco announced on Monday that it will be launching its same day online grocery delivery service across the entire UK from next month.