1st Quarter Results
November 05 2003 - 10:15AM
UK Regulatory
RNS Number:7163R
Metorex Ld
05 November 2003
Metorex Limited
Registration number 1934/005478/06
Incorporated in the Republic of South Africa
Listed on the JSE Securities Exchange South Africa and London Stock Exchange
Share code MTX
ISIN code ZAE000022745 Issuer code MEMTX
www.metorexgroup.com ("the Group")
Unaudited consolidated results for the quarter ended 30 September 2003
Barberton exceeds expectations
Chibuluma South underground development commences
Middelburg Townlands project progressing
Group generates cash of R22,4 million during the quarter
O'Okiep operations under review
Consolidated income statement
Quarter ended Quarter ended
30 September 2003 30 June 2003
(Unaudited) (Unaudited)
R000 R000
Mineral sales
Copper 53 719 68 992
Zinc 18 493 18 706
Coal 45 330 47 091
Fluorspar 33 012 28 273
Gold 103 519 31 992
Antimony 24 888 28 791
Other 2 283 1 851
Gross revenue 281 244 225 696
Realisation costs 35 452 35 103
On-mine revenue 245 792 190 593
Cost of production 246 321 196 540
cash costs 221 678 163 163
stock movement 7 669 22 542
depreciation 16 974 10 835
Mining loss (529) (5 947)
Other income 6 122 2 818
Income/(loss) before
finance costs 5 593 (3 129)
Net finance costs 8 228 4 055
Loss before taxation (2 635) (7 184)
Taxation 1 161 (851)
Loss after taxation (3 796) (6 333)
Income attributable to
outside shareholders 3 683 737
Loss attributable to
ordinary shareholders (7 479) (7 070)
Weighted average shares
in issue (000's) 175 019 144 889
Earnings per share (cents) (4,27) (4,88)
Headline earnings per
share (cents) (4,16) (4,25)
Headline earnings is
calculated as follows:
Loss attributable to
ordinary shareholders (7 479) (7 070)
Profit on sale of assets (712) -
Goodwill amortisation 915 915
Headline earnings (7 276) (6 155)
Abridged consolidated cash flow statement
Quarter ended Quarter ended
30 September 2003 30 June 2003
(Unaudited) (Unaudited)
R000 R000
Cash inflow from operating
Activities 13 633 14 215
Cash generated by operations 22 438 21 264
Dividends paid (5 251) (450)
Taxation refunded/(paid) 4 674 (2 544)
Net finance costs (8 228) (4 055)
Cash outflow from investing
Activities (10 282) (24 452)
Cash outflow from financing
Activities (7 420) (9 893)
Net decrease in cash (4 069) (20 130)
Opening cash (2 056) 18 074
Closing cash (6 125) (2 056)
Abridged consolidated balance sheet
30 September 2003 30 June 2003
(Unaudited) (Audited)
R000 R000
Assets
Non-current assets 757 211 782 165
Current assets 177 799 196 034
Total assets 935 010 978 199
Equity and liabilities
Capital and reserves 402 675 428 816
Minority interest 20 382 16 699
Non-current liabilities 301 309 308 768
Current liabilities 210 644 223 916
Total equity and liabilities 935 010 978 199
Share information
Quarter ended Quarter ended
30 September 2003 30 June 2003
Shares in issue (000's) 175 019 175 019
Shares traded (000's) 5 430 14 806
Share price (cents) - high 280 245
Share price (cents) - low 215 205
Closing price (cents) 240 220
Commodity sales statistics
Quarter ended Quarter ended
30 September 2003 30 June 2003
Copper (t) 4 229 5 556
Zinc (t) 3 073 3 172
Coal (t) 352 955 350 741
Fluorspar (dmt) 40 349 33 349
Gold - Barberton Mines (kg) 875 138
Gold - other (kg) 175 214
Antimony (mtu) 148 754 148 100
Commodity prices achieved (averaged)
Quarter ended Quarter ended
30 September 2003 30 June 2003
Copper ($/t) 1 707 1 602
Zinc ($/t) 809 761
Coal (R/t) 128 134
Fluorspar (all grades) ($/t) 110 109
Gold - Barberton Mines (R/kg) 101 356 101 896
($/oz) 424 409
Gold - other (R/kg) 84 438 83 970
($/oz) 353 337
Antimony ($/mtu) 22 25
Exchange rate (average) (R/$) 7,44 7,75
Segmental report - Quarter ended 30 September 2003
Revenue Mining
profit/(loss)
% R000
Gold - Barberton Mines 32 18 062
Antimony / Gold 14 (5 341)
Copper 19 (15 253)
Fluorspar 12 584
Coal 16 304
Zinc 7 (191)
Other - 1 306
100 (529)
COMMENTARY
The sustained strength of the Rand resulted in a challenging quarter for the
base metal operations, which was compounded by problems with the copper grades
at both O'Okiep Copper Company and Chibuluma West. The Barberton Mines
acquisition during the last month of the previous quarter has outperformed
expectations and has largely negated the losses from the base metal operations.
A management action programme has been implemented with focus on increased
production and reduced operating costs in all of the Group operations. This
programme is yielding benefits with the quarter-on-quarter escalation of
operating expenses, excluding the impact of the Barberton Mines acquisition,
amounting to just 3% after the implementation of salary and wage increases.
OPERATING PERFORMANCE
The performance from Barberton Mines for the quarter exceeded expectations with
sales of 875 kg at an average price of R101356/kg.
Cash costs are presently at R74 332/kg produced and further cost reductions are
in prospect for the forthcoming quarter.
Production problems at both Chibuluma West and O'Okiep resulted in lower metal
realisation. While action to improve performance has been implemented, it is not
anticipated that these problems will be wholly overcome. In these circumstances
the recent improvement in base metal prices will, if maintained, be most
helpful.
The coal operations continued to contribute to the Group's earnings.
Fluorspar operations at Vergenoeg had a successful quarter notwithstanding the
impact of the strong Rand. Vergenoeg is beginning to benefit from improvements
in the product quality, resulting in increased pricing and volume demand.
Gold production at Consolidated Murchison was lower than anticipated due to
lower grades, however antimony production achieved internal target levels.
FINANCIAL POSITION AND CASH FLOW
The Group incurred a mining loss of R529 000 during the quarter compared with a
loss of R5,95 million the previous quarter. The contribution from Barberton
Mines was the main contributor to this improvement. The increase in revenue from
R226 million to R281 million and the increase in cash costs from R163 million to
R222 million are primarily attributable to the inclusion of Barberton Mines. The
loss attributable to ordinary shareholders of R7,5 million is comparable with
that of the previous quarter.
Cash generated by operations increased marginally from R21,3 million to R22,4
million for the quarter. Dividends, taxation refunds and financing costs
absorbed R8,8 million of this cashflow and capital expenditure and debt
repayments absorbed a further R17,6 million resulting in a net decrease in cash
for the quarter of R4,1 million.
FUTURE PROSPECTS
The recent strength in commodity prices combined with the gold hedges in
Barberton Mines should contribute to increased revenues in the forthcoming
quarter. The effect of sustained strength in the Rand/Dollar exchange rate has
had, and will continue to have a significant affect on the Group's earnings.
During this period management is focused on cost reductions and volume
increases.
CURRENT DEVELOPMENTS
Barberton Mines
The Group has commenced collating mine exploration data prior to embarking on a
regional exploration programme to expand existing mine reserves and delineate
potential future ore bodies.
Chibuluma South
The financing and conditions precedent for the development of the Chibuluma
South mine have been finalised and development of the decline shaft has
commenced. This project is expected to commence production from the sulphide
orebody within twelve months. As a high-quality orebody with an established life
of fifteen years, this project is expected to make a significant contribution to
the future of the Group.
Middelburg Townlands
The Company has applied for a mining authorisation from the Department of
Minerals and Energy. Site establishment has commenced, a processing plant has
been purchased for re-siting at Middelburg and a plant consultant appointed.
This project should commence production during the last quarter of the financial
year and is expected to produce a proportion of its production in the form of a
premium-priced lower phosphorus coal product for use in the ferrochrome and
ferroalloy industries.
Future prospects
Discussions are being held with various parties with regard to the involvement
in projects in the platinum and nickel industries. The Group is in addition
embarking upon a more aggressive exploration programme in the regions
surrounding the existing mines to potentially discover extensions to the
existing ore reserves or new orebodies. The Group is targeting longer life,
quality ore bodies for future development.
CAPITAL EXPENDITURE
Group capital expenditure for the quarter totalled R10,3 million (previous
quarter: R3,9 million), mainly on underground development and equipment at
Barberton Mines, expenditure on Middelburg Townlands, Chibuluma South project
expenditure and equipment at Vergenoeg.
SAFETY
The Group is saddened to report that its safety record has recently been marred
by the tragic loss of three employees at Consolidated Murchison Mine through an
underground accident involving a fall of ground. The directors and staff express
their sincere condolences to the families of the deceased.
The Group reiterates its commitment to operating its mining activities with due
regard to the safety and health of its employees.
By order of the Board
ASMALONE CDSNEEDHAM
Chairman Financial Director
5 November 2003
Contact details for Metorex Limited and Corporate Advisers
Metorex Limited
Postal: PO Box 2814 Saxonwold 2132
Republic of South Africa
Telephone: (+27 11) 880-3155
Facsimile: (+27 11) 880-3322
website: www.metorexgroup.com e-mail info@metorexgroup.com
Registrars: Ultra Registrars (Pty) Limited
PO Box 4844 Johannesburg 2000
South Africa Telephone: (+27 11) 834-2266
Capita Group plc The Registry 34 Beckenham Road Beckenham Kent BR 34TU England
Telephone: 0944 208 639-2486 Fax 0944 208 639-2279
Company Secretaries: Moore Stephens MWM
PO Box 1574 Houghton, 2041 Telephone (+27 11) 728-7240
Auditors: Deloitte & Touche
Private Bag X6 Gallo Manor, 2052 RSA
Telephone: (+27 011) 806-5000
This information is provided by RNS
The company news service from the London Stock Exchange
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