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Johannesburg - Petmin [JSE:PET], a multi-commodity mining
and processing company and one of the leading producers of quality anthracite
and silica in South Africa, has reported stable net profit at R47m for the
half-year to end-December 2011, following a period of significant capital
investment in its flagship Somkhele mine and expansion of operations abroad.
Petmin generated revenues of R311m, down 3% from R321m in
2010. Headline earnings per share remained unchanged at R8.15 (2010: R8.19).
The group's operations remain strongly cash generative, with
net cash flow from operating activities of R200m in the six months to December
2011 (2010: R191m); three months - 5.75%.
Capital expenditure increased to R339m (2010: R138m) of
which R159m (2010: R72m) was spent on prestripping the open pits at Somkhele in
anticipation of doubling production to feed a second wash plant. R90m (R2010:
R7m) was invested in the second wash plant at Somkhele.
The new plant was commissioned in February 2012 and will
take Somkhele's capacity to more than 1.2 million saleable tonnes of
metallurgical anthracite per year. R15m (R2010: R4m) was invested in
exploration to ensure a life of mine at Somkhele in excess of 20 years
at full production.
In the six months to December 2011, Petmin invested R23m
(2010: R11m) in its jointly controlled projects abroad - the North Atlantic Iron
Corporation in Canada (NAIC) and Iron Bird Resources in Liberia - and an additional R23m (2010: nil) to fund the exploration programme at Red
Crescent Resources' Sivas copper project in Turkey.
An NAIC maiden resource statement, based on exploration of
just 3% of NAIC's 450km2 claim, was released on Monday.
This initial
resource will support a life of mine between 25 and 30 years for production of
500 000 tonnes of pig iron per year at the bottom end of the cost curve. The
scale of the resource indicates that it should be able to support multiple pig
iron plants.
"We have completed a period of significant investment
for growth," Petmin chief executive Jan du Preez said. "Our expansion
at Somkhele and promising developments in our Canadian iron sands to pig iron
project put Petmin in a strong position to increase future earnings and
significantly enhance shareholder value."
Petmin executive chairperson Ian Cockerill said: "Petmin continues to generate cash from efficient mining operations in South Africa, and is on track to deliver on its strategy to become a globally diversified mining company specialising in specific commodities that feed into the steel value chain, and capitalise on the ongoing urbanisation and investments into infrastructure."
