Petmin has reported headline earnings per share up 29% for the six months ended 31 December 2013, despite operational and labour challenges and price pressures in a difficult market. Normalised earnings were up 40%. Net cash flow from operating activities was up 129% at R279 million.
Production of saleable anthracite at Somkhele mine in KwaZulu-Natal was up 86% from the comparable six months in 2012 despite a prolonged strike, the impact of which was minimised by Petmin’s stockpile strategy.
Production volumes at Somkhele are expected to improve by at least 20% in the six months to 30 June 2014. Following extensive exploration, an independent SRK S AMREC and SAMVAL-compliant reserves and resources statement valued Somkhele at R1.64 billion at 1 December 2013.
During the six months under review, Petmin increased its stake in the North Atlantic Iron Corporation (NAIC) to 30%. NAIC is a North American iron sands to pig iron industrial venture with a Preliminary Economic Assessment (PEA) due to be published by end-March 2014. Petmin invested a further R40 million in NAIC, taking the carrying value of Petmin’s investment in NAIC to date to R189 million at 31 December 2013.
“We remain strongly cash generative despite difficult conditions,” said chief executive Jan du Preez. “Petmin’s Somkhele anthracite asset has increased production at a materially reduced cost, despite 37 days of industrial action that cost Petmin approximately R10 million after tax.”
“The expansion of our stake in NAIC to 30% indicates our confidence in this North American industrial venture, which is concluding its Preliminary Economic Assessment and moving rapidly up the value curve.”
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