Petmin bolsters earnings
Johannesburg - Petmin, the JSE-listed multi-commodity mining company, says its headline earnings per share are up 70 percent in the six months to December as Somkhele delivers despite difficult conditions.
The miner, which has operations in South Africa and development projects in North America and SA, also notes it has made further investments in the North Atlantic Iron Corporation (NAIC) as project economics remain robust.
Petmin is focused on commodities that support the steel value chain and are required for urbanisation and infrastructure growth. It claims to be South Africa’s leading producer of metallurgical anthracite, and is developing an industrial project in North America to produce merchant pig iron.
It says its Somkhele anthracite mine in KwaZulu-Natal reported a 6 percent reduction in tons produced of saleable anthracite to 637 million tons, with a 6 percent drop to 621 million tons sold.
“The reduced production was due to geological conditions in the mining areas which affected the quality and sizing of run-of-mine material. Production and sales during the period remain above the benchmark 1.2 million tons metallurgical anthracite capacity of Somkhele.”
In the first six months of the year, its headline earnings per share gained to 14.32 cents, up from 8.40c in the six months to December 2014.
However, Petmin’s R115 million full impairment of its investment in the Veremo iron ore to pig iron project in Mpumalanga led to a basic loss per share of 7.15 cents compared with a profit of 8.40 cents in the previous corresponding period.
The decision to impair the Veremo investment was due to the continued lack of acceptable progress in discussions with the majority shareholders of Veremo on how best to take the project forward, the continued downward pressure on iron ore prices, and the fact the mining right awarded in January 2014 has still not been executed, it says.
It ended the period with cash on hand of R297 million.
In a statement issued on Monday, it said revenue gained 4 percent to R721 million, and its gross profit was up 40 percent to R137 million.
The group’s additional investment in NAIC takes its shareholding to 38 percent.
Currently, the final design and costing is under way for the NAIC plant and a bankable feasibility study (BFS) is due mid-2016, while environmental permitting is under way.