[miningmx.com] — PETMIN on Monday posted a net profit of 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.
The group’s operations remained cash generative, with net cash flow from operating activities of R200m during the reporting period (2010: R191m). Headline earnings per share remained unchanged at R8.15 (2010: R8.19).
Capital expenditure increased to R339m (2010: R138m) of which R159m (2010: R72m) was spent on pre-stripping the open pits at Somkhele in anticipation of doubling production to feed a second wash plant. R90 million (R2010: R7 million) was invested in the second wash plant at Somkhele.
The new plant was commissioned in February 2012 and would take Somkhele’s capacity to more than 1.2 million saleable tonnes of metallurgical anthracite per year. R15m (R2010: R4m) was invested in exploration in order to ensure a life of mine at Somkhele in excess of 20 years at full production.
Petmin also invested R23m (2010: R11m) in its jointly controlled projects abroad, the North Atlantic Iron Corporation in Canada (NAIC) and Iron Bird Resources Inc (Iron Bird) in Liberia, and an additional R23m to fund the exploration programme at Red Crescent Resources Limited’s (RCR) Sivas copper project in Turkey.
A NAIC maiden resource statement, based on exploration of just 3% of NAIC’s 450km2 claim, was released on Monday.
This initial resource would 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, the company said.
“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.’
