StockMarketWire.com - Lonmin said it expected sales at the lower end of guidance as production slumped in the first half of the year. The miner also said Mr G Sonamzi was fatally injured during second quarter, resulting in a total of two fatalities in the first six months.

'(G)iven the extent of production losses suffered during the first half as well as finalising the transaction with Sibanye-Stillwater, we expect sales for the full year to be at the lower end of our sales guidance range of between 640,000 and 670,000 Platinum ounces, assuming a stable electricity supply during winter and absent any unforeseen interruptions to our mining production,' the company said.

Total Platinum production for the second quarter of 2019 fell 12.3% to 125,803 ounces, while total first-half platinum production fell 10.3% to 276,020 ounces, on the back of reduced mining tonnes, lower grades and lower recoveries, the company said.

The dour outlook comes as the company swung to a positive operating profit for the first of the year, driven by higher precious metal prices and a weaker Rand-to-dollar exchange rate.

For six months of 2019, operating profit was $70m compared to a loss of $32m a year earlier.

The US Dollar basket price (including base metal revenue) rose 14.7% to $1,214 per ounce during the second quarter of 2019, while the corresponding Rand basket price of R17,068 per ounce was 34.8% higher than Q2 2018, driven mainly by the higher Palladium and Rhodium prices, the company said.

Platinum sales for the second quarter of 2019 of 146,459 ounces were 4.2% higher than Q2 2018, while first half platinum sales of 286,947 ounces were broadly flat year-on-year.

Refined platinum production for the second quarter of 2019 rose 16% to 142,260 ounces from a year earlier, while refined platinum production for the first six months of 2019 rose 1% to 286,911 ounces.

The company said the progress made does 'not provide a long-term solution to the capital structure challenges faced by Lonmin, as it is still inadequate to invest in the new projects necessary to avoid shaft closures and job losses and maintain our production profile.'

'The Company's available liquidity is also still vulnerable when considering its working capital requirements and continuing exposure to volatile currency and metal markets.'

'Accordingly, we remain convinced that consolidation through the announced Offer from Sibanye-Stillwater creates the best way forward for our shareholders and all our stakeholders.'




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