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Metorex to focus on three projects

Metorex CEO
Terence Goodlace

Johannesburg, South Africa — MININGREVIEW.COM — 05 March 2009 – South African-based Metorex Group is to concentrate on three main projects to its achieve its strategy of being a leading mid-tier multi-commodity mining group, focused on high-grade, long-life ore bodies in sub Saharan Africa.

Announcing the company’s interim results here, CEO Terence Goodlace said the three imperatives were: completion of the Ruashi project in the Democratic Republic of Congo (DRC) to design capacity before the end of 2009; reduction of Group indebtedness; and improvement of the geographic and commodity balance of the Group’s portfolio.

The company statement confirmed that in order to address these issues, the following programme had been launched, and was making encouraging progress: disposal of non-core assets; raising of project-specific funds to develop the Group’s high-grade DRC copper assets, and reduce debt at project level; evaluation  and progression of corporate transactions with entities with synergistic cash-flow, growth and commodity/ geographic portfolios; improvement of the quality of operational and managerial human resources within the Group; and reduction of costs throughout the Group.

“The current economic environment is harsh and uncertain,” the statement added. “The company will need to achieve the above objectives in order to survive this period and emerge able to maximise the future opportunities available from its quality mining portfolio.”

The Metorex results statement revealed that for the half-year to 31 December 2008, the Group’s revenues had increased, following a 28% weakening of the ZAR/US Dollar exchange rate, and its profitability had suffered during the second quarter as commodity prices dropped. Operating costs had increased following a weaker ZAR/US Dollar exchange rate and inflationary unit cost increases. These unit cost increases had subsequently eased, following the meltdown in global activity. Overall earnings had benefited from profits of R210 million realised on closure of hedge contracts surplus to Ruashi’s revised production plans. Ruashi Phase II was in a ramp-up phase, and accordingly its revenues and expenses continued to be capitalised.

Goodlace commented: “Metorex has experienced difficult times over the last six months, driven by rapidly declining commodity prices, in conjunction with major investment programmes in an inflationary environment. This led to the successful capital raising of R922 million over December 2008 and further decisive action to address challenges and refocus the strategy of the company,” he added.

“The Group has a declining capital expenditure profile which will go a long way to improving the current cash position of the company,” Goodlace continued. “We are totally committed to meeting current and future strategic imperatives and I believe there is a solid foundation and the right leadership in place to steer the company through these uncertain times.”
Caption, Pic 1:Metorex CEO Terence Goodlace.