03 Apr 2014
African Minerals Limited is a mineral exploration, development and mining company, and is the developer and operator of the Tonkolili iron ore mine in Sierra Leone. The Company today announces its unaudited results for the year ended 31 December 2013.
In 2013, the Company completed Africa’s fastest major mine development which saw its world class mine commence the ramp up to 20Mtpa across its 200km rail and port infrastructure network. In 2013, African Minerals produced 13.1Mt of iron ore and exported 12.1Mt and became the largest contributor to Sierra Leone’s GDP.
Q1 2014 has started encouragingly, and the fully integrated mine / plant / rail / port / marine operation saw AML produce 5.3Mt of saleable product while exporting 4.6Mt in the quarter, and become the largest iron ore exporter in West Africa.
HIGHLIGHTS
Operations
Total production of 13.1Mt of saleable product in (FY 2012: 5.1Mt)
Total ore shipped of 12.1Mt (FY 2012: 4.3Mt)
Average FOB received price of $78t (dry)
Average freight rate of $21/t
Average C1 cash costs of $44/t
December 2013 exit run rate of 19.2Mtpa?
Financial
Revenue of $869.1m, including $32.5m non cash release of deferred income (FY 2012: proceeds from ore sales of $286.6m, capitalised)
EBITDA of $202.9m (FY 2012: $26.5m loss), with $13.6m Free Cash Flow
Operating loss $32.5m (after special items of $115.1m) (FY 2012: $222.5m loss)
A further $49m was drawn on the PXF facility in Q4 2013, taking the drawn balance to $250m. The PXF has now been syndicated to Standard Bank, Standard Chartered Bank, Citi, British Arab Commercial Bank, Ecowas Bank for Investment and Development and BMCE Bank International
Group net debt at year end $473.3m.
Consolidated Group debt at year end $835.7m ($822.8m nominal)
Group cash (at 31 December 2013) of $362.4m ($304.6m restricted)
Settlement of outstanding warranty payments and guarantees with Shandong Iron and Steel Group (“SISG”), as previously announced on 11 September 2013?
Outlook and Post Period
Q1 2014 production of 5.3Mt of saleable product, and exports of 4.6Mt achieved
Standard Bank outstanding corporate level debt facility of $37.5m repaid in Q1 2014
New Standard Chartered Bank corporate level debt facility of $55.0m signed with $37.5m drawn in Q1 2014
Ausenco appointed Tonkolili Phase II Front End Engineering Design (“FEED”) engineer
2014 forecast sales guidance 16-18Mt, with C1 cash costs for the full year expected to average $34-36/t. Further cost savings of around $40m targeted over 2014
Focus on the achievement of 20Mtpa sustainable production run rate during 2014, and driving C1 cash costs down towards $30/t at that production level
A number of initiatives developed to manage the 2014 wet season and to increase production and export capability in order to achieve a 25Mtpa run rate
Complete Tewoo transaction
Construction of first Phase II concentrate facility to commence in H2 2014 with the project ramping up initially to 25Mtpa. Capital requirements to be met by existing restricted project level cash and new project debt facilities
Bernie Pryor, Chief Executive Officer of African Minerals, said:
"2013 saw the completion of construction of Phase I at our Tonkolili iron ore mine in Sierra Leone. The integrated mine, plant, rail, port and marine operations achieved the 20Mtpa run rate on several occasions in the year with ongoing optimisation producing a record fourth quarter for both mining and shipments.
I am pleased to report that this strong performance has continued into the current year, with new records of 5.3Mt produced and 4.6Mt shipped in the first quarter of 2014. This level of demonstrated continued improvement, quarter on quarter, provides the basis for our 16-18Mt sales guidance for 2014 and average C1 cash cost range of $34-36/t.
The coming year will see a focus on meeting this guidance and driving C1 cash costs down towards the $30/t level once production stabilises at 20Mtpa. Tonkolili’s Phase II early engineering has been approved by the project Board. Construction is on track to commence in H2 with the objective of increasing annual production initially to the 25Mtpa rate, including production of a higher value concentrate product.”