Message Ven 18 Sep 2009 18:16

Metorex moves towards becoming a pure copper play

Shares rise as debt-hit Metorex moves towards becoming a pure copper play - By: Martin Creamer - 9th September 2009
JOHANNESBURG (miningweekly.com) – The shares of South African miner Metorex rose on the JSE on Wednesday as the diversified mining company trended towards becoming a pure copper play.
Metorex CEO Terence Goodlace told Mining Weekly Online that the quicker the company could get its Ruashi copper project in the Democratic Republic of Congo towards a higher level of production the sooner the company would be able to restore its damaged reputation and strengthen its debt-weakened balance sheet.
"We have a plant that can do 180 t on the hydrometallurgical circuit. Ultimately, once the crushing circuit has been fully commissioned - and that should be towards the end of the year - it will then be up to us to see if we can feed this plant 1,44-million tons a year," Goodlace said.
That would translate into a copper output of between 40 000 t/y and 45 000 t/y of copper and 3 500 t/y of cobalt, from pre-recovery head grades of 3,2% copper and 0,39% cobalt.
On Metorex trending away from being a diversified miner of antimony, fluorspar and gold towards becoming a copper mining company with cobalt credits, Goodlace said that Metorex's becoming a pure copper play was a reasonable expectation.
"My sense is that we're on a path towards restoring our reputation, the technical inputs into the operations are getting better and there is a proactive intent to restore the balance sheet through producing at low cost, selling asset and introducing strategic investors into the company.
"We are talking to strategic investors, and we are engaged in certain corporate activities," Goodlace confided.
Metorex shares rose more than 5% by noon to a high of R3,92 a share, later closing at R3,70 a share.
As pure copper play, Metorex would still be saddled with a 24 000-t primary copper hedge.
More than half of Ruashi copper has been sold forward at $3 900/t until September 2010, after which fully paid put options would assure a minimum price of $3 900/t and allow full price exposure to the upside until June 2012. Copper was trading well above the $6 000/t this week, lifted by a weaker dollar.
The Chibuluma copper mine in Zambia also has a limited hedge book that guarantees copper prices of between $4 415/t and $5 308 /t for one-half of the production until June 2010.
DEBT REPAYMENT
Metorex used the R370-million proceeds from the sale of Pan African Resources and the R107-million from the sale of 15% of Vergenoeg to a black economic-empowerment partner to repay short-term loans, and still owes R696-million that must be paid in the next 12 months, the first R32-million Chibuluma instalment falling due this month.
Goodlace said that Chibuluma would itself be in a position to service that debt, and he expected the corporate Standard Bank bridging loan to be "substantially settled" by November.
He also expected the company to be in a position to contribute to the first Ruashi payment of $25-million in December 2009.
Mines that continued to draw down cash, other than the predetermined debt repayment, were Consolidated Murchison and Kinsenda.
Goodlace said of Consolidated Murchison that there was "still life in the old lady" and if the company did some "decent" mining there and focused on the correct mining aspects of mining, there was potential for a "measure of turnaround".
But, critical for Metorex, was the old mine's need for "substantial reinvestment", an appropriate antimony price and an offtake agreement.
"The antimony price keeps going up in dollar terms, but rand strength is quite problematic at the moment at both Cons Murch and at Vergenoeg," Goodlace said.
Vergenoeg's dollar contracts for acid fluorspar meant lower rand receipts of R2 300/t, down from R3 200/t , mainly as a result of rand strength.
All Metorex mines, other than Vergenoeg, delivered improved production in the period, the Ruashi mine exceeding the June quarterly copper production target of 4 500 t by producing 5 245 t.
Cobalt production also exceeded the 450 t forecast, with 571 t of cobalt being produced.
Ruashi's resource and reserve drilling programme has been completed, with reserve numbers confirming a significant deposit.
The 80%-reduced group headline earnings per share of 24c a share excluded impairment charges of R2,3-billion, which plunged earnings for the year to a loss of 239c a share.
Group illiquidity has eased through increased production, higher commodity prices and the sale of assets and shares.

from < http://www.miningweekly.com/article/sha ... 2009-09-09 >

---------------------------

De cet article il est intéressant de retenir (The Chibuluma copper mine in Zambia also has a limited hedge book that guarantees copper prices of between $4 415/t and $5 308 /t for one-half of the production until June 2010) l'existence de hedges, d'une valeur comprise entre 4.415$/t et 5.308$/t, sur la moitié de la production jusqu'à Juin 2010.
Ce que l'on conçoit bien, s'énonce clairement, Et les mots pour le dire arrivent aisément. BOILEAU