[miningmx.com] – LONMIN has used the bulk of its $817m rights issue raised earlier this month to repay its $700m bank debt, the company said in an announcement.
It had also cancelled a $300m term loan under these facilities, denominated in US dollars which left the company with access to $400m in revolving credit facilities which it would draw upon “when required”.
The amended $400m revolving credit facilities became effective on December 19, the company said.
Lonmin said in October it would rein-in its capital expenditure for the next two years by 23% as it sought to map its way forward following the events at Marikana during August.
The company has now truly abandoned its previously stated objective of achieving output of 950,000 ounces of PGMs by 2016, saying its new target for that year would be 800,000 oz.
Lonmin’s previously envisaged target of 950,000 oz by 2016, from 750,000 oz in 2012, would’ve been achieved by consistently spending $450m in capex each year until that time. It was pushed to reduce its capex forecast for 2013 and 2014 by 40% – to $250m per year – in July, largely motivated by the ongoing weak market prospects for PGMs.
The company’s revised strategy now forecasts investment of around $175m in 2013 and $210m in 2014, targeting sales of 680,000 oz in 2013 and 750,000 oz during the two years after that.
For 2013 and the following year, most of Lonmin’s capex would be directed at maintaining the group’s ore reserve flexibility which equated to 18 months of mining on September 30.
“The company’s planned capital expenditure over the next two financial years is expected at least to maintain this level of reserve availability,’ Lonmin said.
