Pallinghurst upbeat about 2017 despite falling manganese prices

PALLINGHURST Resources remains optimistic about this year’s prospects despite manganese prices falling since December 31.

The company said yesterday that the manganese price was at $2.90 (R37.32) per dry metric ton unit (DMTU) on March 24, which was $4.48 per DMTU lower than the price of $7.38 per DMTU on December 31, last year.

However, the recent drop in manganese price has not had any effect on the company’s results reported by the company.

Chief executive Arne Frandsen said: “Pallinghurst performed well in 2016, recording an impressive $45 million profit for the year.

“Reflecting this strong performance, our shares have also fared well on the JSE, increasing significantly over the past 12 months.

“With our three business platforms all well positioned for further growth and value-unlock, I remain optimistic for 2017 and beyond.”

The rise in commodity prices last year led to the stock responding positively.

It rose by 35.8 percent in the last year alone to climb to about R4.40 a share, up from R3.24 a share in March last year.

The surge in manganese price in the reporting period allowed the company to report a profit of $44.5m for the year to December, reversing the $149.12m loss reported a year earlier.

Earnings per share improved to US6 cents a share from US20c, loss a share in 2015.

Pallinghurst has shares in a platinum mine, Sedibelo Mines, the Tshipi Borwa manganese mines and a stake in Gemfields, which mines and markets gemstones. Chairperson Brian Gilbertson said the company’s objective had been on creating strong businesses which will be attractive regardless of the market environment. “We have made significant strides to achieve that aim,” he said.

He said 2017 represented the 10th anniversary for Pallinghurst.

“This anniversary requires that we pause to evaluate how to unlock the inherent value of our assets. We are exploring all options available and will shortly present a proposal to shareholders,” he said.

Towards the end of January Jupiter Mines, in which Pallinghurst holds an 18.45 percent stake, announced the details of an off-market equal access share buy-back to return up to $55m to its shareholders.

Pallinghurst accepted the buy-back by Jupiter, resulting in the sale of 25 262 526 shares in Jupiter for US40c per share.

The transaction was completed earlier this month, with the company receiving $10.1m.

The company said this transaction would be accounted for in the company’s interim financial statements for the six months to June.