Johannesburg – Petmin [JSE:PET] has reported a 9% rise in headline
earnings per share to 19.06 cents for the year ended June 2012.
Net cash flow from operations was up 23% to R443.8m‚ while
annual profit grew 12% to R112.7m.
Like-for-like earnings per share from continuing operations
were up 23% to 16.82 cents‚ while the dividend was up 25% to 5.0 cents per
Petmin described the operational performance as “healthy”‚
saying it is preparing for growth following significant investment and
R523m has been invested to double capacity and deliver on
its strategy despite difficult market conditions.
Among the operation highlights were a rise in Somkhele’s
annual production capacity from 530‚000 tonnes to 1.2 million saleable tonnes‚
while investment was approved for a third processing plant at Somkhele. The
extended life of Somkhele mine is now more than 20 years.
In addition‚ the New Order Mining Right was extended to
cover new mining areas at Somkhele and there was accelerated investment in
North Atlantic Iron Corporation (NAIC) pig iron project.
Petmin chief executive Jan du Preez said: "Benchmarked
against our peers in the resources sector‚ Petmin had a satisfactory year of
significant investment for future growth. We are reporting healthy financial
results after our operations performed well and generated cash in a difficult
"We are pleased to declare an increased dividend while
keeping funds in reserve for the development of new mining areas at Somkhele
and the development of our Canadian iron sands to pig iron project."
Petmin also reported a significant investment of R523m during
the year. Capital expenditure at Somkhele was R388m‚ of which R177m was spent
on pre-stripping the open pits to feed the second wash plant. The second plant
was commissioned for a total capital cost of R162m‚ of which R119m was spent in
the year to end June 2012.
Petmin's investment in development projects was R98m during
the year‚ with a further R36m at SamQuarz.
Its flagship Somkhele anthracite mine is reaping the
benefits of investment in a second wash plant‚ with production more than
doubling in May and June 2012 compared to the same period in 2011. Somkhele's
total annual production capacity is now in excess of 1.2 million saleable tonnes
of metallurgical anthracite.
"This is a strongly cash-generative operation which has
more than doubled its production capacity and significantly increased its
reserves. Somkhele now has the flexibility to increase production in response
to market demand‚" du Preez said.
Petmin's 'Business of Tomorrow' exploration activity showed
satisfactory results and management is encouraged by progress at NAIC and is
accelerating its investment in this project as it advances towards a
Following satisfactory exploration results‚ Petmin is
considering its options for the future of its interest in the Mt Ginka iron
project in Liberia.
Based on results received from initial exploration activity‚
Petmin has written down its investment in the Red Crescent Resources-controlled
Sivas copper project in Turkey as the results did not meet Petmin's criteria
for further investment.
Petmin's director of business development‚ Bradley Doig‚
said: "Early-stage exploration is an inherently risky business‚ but out of
three projects NAIC has a very positive maiden resource statement and is moving
rapidly towards pre-feasibility‚ and Mt Ginka has good prospects that's a very
good success rate for exploration and validates Petmin's rigorous investment
criteria and project selection."
Petmin has signed approved term sheets with its bankers‚
Standard Bank‚ securing‚ in addition to the existing R100m overdraft
facilities‚ new medium-term debt facilities of R225m and an R100m revolving
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