Petmin on the rise
Junior mining company Petmin, which has a n operationa l anthracite mine in Somkhele in KwaZulu-Natal, and a development project in the North Atlantic Iron Corporation (NAIC) in Canada, recently reported interim results for the period ending December 2013.
What’s clear is that management is really ‘sweating the assets’. Bradley Doig, business development executive at Petmin, says Somkhele is running at full power at the moment. “This has allowed us to cut costs, specifically the mining cost.” This was borne out by the f inancials – the ex-mine gate cost dropped from R770/ton in the previous corresponding period, to R697/ton over the last six months. There was also an 86% increase in metallurgical anthracite production.
Doig says Somkhele produces about 1.2m tons per annum of anthracite, 50% of which goes to the domestic market and 50% to the export market. “We Cents 260
Apr 2013 truck our anthracite to the dry bulk terminal at Richard’s Bay and export it from there. The domestic ferrochrome producers who consume our anthracite, and who also export via Richards Bay, get their trucks to return with product from our mines,” says Doig. This greatly reduces the cost of delivered goods for the mine.
Somkhele is also producing strong cash f lows. Cash f lows from operating activities amounted to R279m versus operating profit of R79m, during the period. But as is so often the case with resource companies, most of the money being generated by operations is being spent p on purchases p of p plant and equipqp ment. This meant that Petmin was