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Johannesburg - Platinum (Pt) sales at 108‚342 ounces in the December 2012 - the first quarter of Lonmin’s 2013 financial year - were 16.7% higher than the prior year period‚ while total platinum group metals (PGM) sales decreased by 3.7% to 182‚576 ounces‚ the world’s third largest platinum producer reported Thursday.

Total tonnes mined in the first quarter of the 2013 financial year from Lonmin’s Marikana underground operations were 2.7 million tonnes‚ down 26‚000 tonnes or 1.0% from the prior year period.

This is a relatively flat performance when compared with the first quarter 2012‚ as this performance masks two trends.

Lonmin said firstly the prior year period results were unusually impacted by the high incidence of Section 54 safety reviews and stoppages which dominated the SA mining sector as a whole and resulted in lower than normal production in that period.

The total impact of Section 54 shutdowns in the first quarter 2012 was 177‚000 tonnes‚ compared with 19‚000 tonnes in the first quarter 2013.

Secondly the first quarter 2013 production reflected the re-commencement and gradual ramping up of production during the quarter.

Lonmin said the quarter's performance was commendable with tonnes mined well ahead of the ramp up plan and overall mining division’s output up 78.2% from the prior quarter.

This solid performance was due to the emphasis Lonmin placed on safely accelerating their ramp up following the resumption of operational activities coupled with the extensive training they conducted before blasting commenced on October 1 2012.

In addition‚ management interventions have assisted in ensuring high levels of employee work attendance during the quarter up to the December break.

Looking specifically at how their four mining divisions contributed to the quarter's total production‚ tonnes mined at Karee were largely flat increasing by only 0.1% from the prior year period‚ with tonnes mined at K3‚ their biggest shaft‚ relatively flat when compared to the prior year period.

The prior year period also included 18‚000 tonnes from K4‚ which was placed on care and maintenance in September 2012.

Western’s production decreased by 5.5% driven by the planned depletion of ore reserves at Newman shaft and ore reserve and infrastructure challenges at Rowland. Production at Middelkraal was up 66‚000 tonnes representing a 14% increase from the prior year period as both Hossy and Saffy continued to increase production. Production at Easterns fell by 53‚000 tonnes or 19.4% as E1 and E3 approached their end of life.

Pandora underground production increased by 13.5% to 61‚000 tonnes and is ramping up to replace the tonnes lost by the winding down of E1 and E3.

Lonmin’s opencast Merensky operations delivered a total of 155‚000 tonnes‚ an increase of 31.3% from the prior year period as planned.

Total tonnes milled for the quarter declined by 4.6% to 2.8 million tonnes when compared to the first quarter 2012.

This was due to the concentrators re-starting as planned‚ ten days after the mining ramp up commenced on October 1 2012. This was to rebuild stocks as required for efficient plant running and the planned closure of the Number One shaft UG2 concentrator for upgrade. The UG2 concentrator is due to come back online in the fourth quarter of FY 2013.

Platinum in concentrate from Lonmin’s Marikana operations was 174‚253 saleable ounces‚ a 2.2% decrease from the prior year period and an increase of 71‚431 ounces when compared to Q4 2012. In total the concentrators produced 185‚497 saleable ounces of Platinum in the quarter‚ a 0.7% decrease from the prior year period.

Total refined production for the quarter was 135‚455 ounces of saleable Platinum an increase of 18.9% on the prior year period.

The discrepancy between metal in concentrate and refined production is a consequence of the planned restocking of the pipeline following the six week strike and the re-establishment of stable metal flows through the value chain. Lonmin said they have successfully filled the pipeline and their stocks are in a healthy position.

The US dollar basket price at $1‚176 per ounce improved by 3.5% on the prior year period whilst the increase in the Rand basket price was more pronounced up 10.3% to R10‚152 per ounce.

The implementation of Lonmin’s renewal plan has progressed well - the over performance on many of the metrics was encouraging‚ and in the absence of any unexpected material labour unrest‚ it is expected to continue as suggested by the healthy stock levels reflected in our production report‚ it said.

The assessment of Lonmin’s operating model and management structure is progressing as planned while its initiative to deliver R100 million in procurement savings for FY 13 by implementing structures‚ processes and systems to fully benefit from a Total Cost of Ownership approach is also progressing well.

Lonmin said that its union membership profile has evolved over the last few months while the recognition agreements with its union stakeholders have also expired. In light of this‚ Lonmin has commenced the process of reviewing the recognition arrangements with a view to establishing all inclusive recognition that provides appropriate representation to all the unions and associations representing its employees.

In parallel‚ Lonmin was actively participating in industry discussions on the establishment of a forum for centralised engagement and looks forward to this becoming a reality.

The rights issue announced on November 9 2012 to raise approximately $817 million was successfully completed on December 11 2012.

Since then‚ Lonmin has repaid in full its $700 million USD bank debt facilities‚ cancelling the $300 million term loan facility leaving the $400 million revolving credit facility available to be drawn when required.

The amendments to this facility as well as Lonmin's ZAR bank debt facilities of R1.98 billion outlined at the time of the Rights Issue both became effective in December 2012.

The successful conclusion of this balance sheet refinancing has significantly strengthened Lonmin's financial position and gives it greater financial flexibility‚ with sufficient available liquidity and more appropriate financial covenants.

On December 28 2012‚ Lonmin announced the resignation of Ian Farmer as Chief Executive of the Company.

The Board has appointed an executive search agency to pursue the selection and engagement of his successor and this search is currently underway.

It said the second quarter was proceeding well with the momentum of the first quarter having already been re-established.

Lonmin’s guidance for the full year is maintained at 680‚000 Platinum ounces of saleable metals in concentrate and sales of 660‚000 ounces of Platinum. - I-Net Bridge