- Lonmin [LON:LMI] was the sector's biggest faller - down by more than 22.1% in late trading - after it maintained its sales guidance for 2017 but said it was disappointed by first quarter production at its Generation 2 shafts and confirmed it was reviewing its capital expenditure.

The Marikana mining operations including Pandora produced 2.3 million tonnes during the quarter, down 7.8% or 0.2 million tonnes on a year ago partly due to the planned decline from the closing of its high cost shafts.

Tonnes mined from its Generation 2 shafts totalled 1.8 million tonnes, a decrease of 5.2%, or 0.1 million tonnes on the comparative period due to the under-performance of K3, its biggest shaft.

K3 produced 590,000 tonnes, a decrease of 13.8% on the prior period.

Lonmin said: "We have been disappointed by the quarter 1 production at our Generation 2 shafts.

"With the initiative of deploying additional stoping and vamping crews, as well as the expected platinum ounces from the smelter clean-up project, our sales guidance for the 2017 full year is maintained at between 650,000 and 680,000 Platinum ounces.

"At this stage we still expect unit costs to remain in the range of R10,800 to R11,300 per PGM ounce for the full year subject to seeing sustained improvement in production during the year.

"We will be reviewing our capital expenditure and will provide an update on guidance in due course."

* * *

Highland Gold Mining's [LON:HGM] output totalled 261,159 oz of gold and gold equivalent in 2016 compared with 262,495 oz in the previous year but in the in the upper half of the guidance range for the year of 255-265k oz.

Production in the fourth quarter totalled 69,237 oz compared with 70,377 oz a year ago.

The group expects total production of gold and gold equivalents in 2017 to remain stable at 255,000-265,000 oz.

* * *

GoldStone Resources [LON:GRL] reports encouraging results from a three-hole drilling programme at the Homase project in Ghana.

The drilling confirmed continuity of the mineralised zone to vertical depths of between 120 metres and 180 metres beneath the base of the historic open pit and the deeper intersection from the third hole suggested a potential for identifying parallel orebodies within the major structural corridor.

The company said its immediate focus was to identify additional resources within the upper zones of the Homase mineralised corridor to facilitate near-term planning for exploitation

Chairman Neil Gardyne said: "This three-hole drilling programme on the Homase licence has produced encouraging results by starting the process of targeting 'information gaps' within the existing resource.

"These results provide important insights to the controls on the mineralisation as well as confirming continuity of the mineralised zone.

"Importantly, they will allow us to plan further drilling with a view to adding to the existing resource, whilst at the same time improving confidence levels in the categorisation of the existing 0.62 million ounce JORC Code compliant resource.

"Although there is little doubt that the ore shoots continue to greater depths, our focus will be on identifying resources at depths that can exploited in the foreseeable future."

* * *

Operational improvements across Anglo American's [LON:AAL] portfolio delivered a 4% production increase on a copper equivalent basis in the fourth quarter of 2016.

The group said De Beers saw continued production increases, reflecting improved trading conditions relative to Q4 2015, while the successful restructuring at Kumba's Sishen mine resulted in an 11% production increase.

- Rough diamond production increased by 10% to 7.8 million carats compared with Q4 2015 when production was reduced in response to trading conditions. The increase also reflected the ramp-up of Gahcho Kue in Canada.

- Platinum production (expressed as metal in concentrate) increased by 2% to 610,100 ounces with strong production from Mogalakwena and Unki mines as well as BRPM and Kroondal.

Refined platinum production decreased by 15% to 631,600 ounces following the Waterval Smelter run-out and subsequent rebuild which impacted refined production by 59,000 ounces in the quarter.

- Copper production decreased by 19% to 146,600 tonnes, primarily at Los Bronces due to expected lower grades, adverse weather earlier in the year, and illegal industrial action by contractor unions.

- Nickel production increased by 4% to 10,900 tonnes following the successful ramp-up of Barro Alto to nameplate capacity in Q3 2016.

- Iron ore production from Kumba increased by 9% to 11.9 million tonnes driven by improved mining productivity and higher plant yields at Sishen, and higher throughput at Kolomela.

- Iron ore production from Minas-Rio increased by 49% to 4.9 million tonnes (wet basis) as the operation continues to ramp-up.

- Export metallurgical coal production decreased by 2%, primarily due to the sale of Foxleigh which completed in August 2016.

Excluding Foxleigh, production increased by 5% to 5.4 million tonnes due to the ramp-up at Grosvenor and productivity improvements at Moranbah and Dawson, partly offset by geological issues and a subsequent longwall move at Grasstree in Q4 2016.

- Production of export thermal coal was impacted by the sale of Callide, which completed on 31 October 2016. Excluding Callide, production increased by 7% to 7.9 million tonnes due to productivity driven improvements across all operations in South Africa and Cerrejon.

Chief executive Mark Cutifani said "Operational improvements across the portfolio delivered a 4% production increase on a copper equivalent basis in Q4 2016.

"De Beers saw continued production increases, reflecting improved trading conditions relative to Q4 2015, while the successful restructuring at Kumba's Sishen mine resulted in an 11% production increase.

"Similarly, Barro Alto's nickel production increased by 9% after reaching nameplate capacity in Q3 2016.

"At Platinum, we continue to maintain discipline by mining to demand. Together with positive contributions from ongoing ramp-ups at Minas-Rio, Grosvenor and Gahcho Ku�, we will be reporting a 2% increase in copper equivalent production volumes for 2016 as a whole."

* * *

The sector's biggest riser was Beowulf Mining [LON:BEM] - up by more than 16.6% in late trading.

At 3:59pm:

[LON:AAL] Anglo American PLC share price was -9.75p at 1351.75p

[LON:BEM] Beowulf Mining PLC share price was +2p at 14p

[LON:BKY] Berkeley Energia Ltd share price was 0p at 66p

[LON:CEY] Centamin PLC share price was -4.5p at 142.8p

[LON:CZA] Coal of Africa Ltd share price was -0.01p at 3.5p

[LON:FDI] Firestone Diamonds PLC share price was +2.5p at 49.5p

[LON:FRES] Fresnillo PLC share price was -49.5p at 1370.5p

[LON:GEMD] Gem Diamonds Ltd share price was +1.13p at 121.13p

[LON:GRL] GoldStone Resources Ltd share price was -0.1p at 1.88p

[LON:HGM] Highland Gold Mining Ltd share price was -12.87p at 163.13p

[LON:HOC] Hochschild Mining PLC share price was -8.9p at 229.8p

[LON:KMR] Kenmare Resources PLC share price was +4.5p at 324.5p

[LON:LMI] Lonmin PLC share price was -39.12p at 137.63p

[LON:VED] Vedanta Resources PLC share price was -38p at 1030p

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