Lonmin plummets on results delay
Lonmin’s share price plunged 28.32% to R14 at the Friday close after it said it would delay its results for the year ended September over concern that the book value of its assets had fallen under levels agreed with banks.
Lonmin’s share price plunged 28.32% to R14 at the close on Friday after it said it was delaying publishing its results for the year ended-September over concern the book value of its assets had fallen below levels agreed with lenders.
The platinum miner said in a production and business update that it was scheduled to release its annual results on November 13 but its auditors required additional time to assess impairments to group assets.
“The operational review aimed at addressing the group’s ability to continue as a going concern due to material uncertainty over the existing debt facilities in the weak economic and pricing environment ... has required ... management’s undivided attention and, as a result, the announcement of the audited full-year results has been delayed,” Wendy Tlou, Lonmin group head of communications and branding, said.
The group did not specify in its operational update which assets were affected and said a new date for the release of the results would be announced.
It said it had improved production, reduced capital expenditure to the minimum required for safe and efficient operations and maintained operational and strategic flexibility.
Lonmin warned that it looked as if unit costs were set to rise to between R12,000 and R12,500 per platinum group metal (PGM) ounce in financial 2018. Unit costs for the fourth quarter were R11,524 per PGM ounce. This was an increase of 4.3% on the fourth quarter of 2016 and an increase of 8.9% for the 12 months to September 2017 to R11,701 per PGM ounce. But this was still within the group’s revised unit cost guidance of between R11,300 and R11,800 per PGM ounce. Lonmin did not say how it would rationalise the cost differences.
“Average rand full basket price for the fourth quarter [was] down 8.7% on the fourth quarter of 2016, at R11,567 per PGM ounce on the back of a stronger rand,” it said.