Platmin Limited – Metal sales at record high in second quarter

Sales of 4E PGM ounces (“oz”) were as follows:

• For the June 2011 month – 9,258oz or about 110 000oz annualized;
• for the quarter ended June 30, 2011 – 21,888oz, an increase of over 100% compared with 10,870oz in the prior corresponding period; and
• for the half-year ended June 30, 2011 – 39,791oz, an increase of 58% compared with 25,259oz in the prior corresponding period.

Volumes treated in the concentrator continue to improve. Between January and June 2011, the monthly tonnes milled increased from 207kt to 277kt and improvements to recoveries are evident when consistent ore volumes with similar physical and chemical properties are processed.

On June 23, illegal disruptions by a small group of employees of the Company’s mining contractor (MCC – a wholly-owned subsidiary of Eqstra Holdings Limited) resulted in serious damage to certain items of MCC’s equipment and interrupted mining operations. However, PPM’s concentrator continued to operate, processing stockpiles of oxidized material.

Mining operations have resumed in full for the three operating shifts per day. However, as a direct consequence of the equipment damage and the reorganisation described below, the projected production ramp-up to 12,000oz per month by the end of 2011, could be delayed by three to six months.

The final documentation for the revised environmental management plan has been submitted to the Department of Mineral Resources and a reply is expected during Q3 FY2011.

Financial performance

Sales revenue was:

• for the quarter-ended June 30, 2011 – US$34.5 million, an increase of approximately 130% compared with US$15.0 million recorded in the prior corresponding period; and
• for the half-year ended June 30, 2011 – US$60.5 million, an increase of approximately 80% compared with the prior corresponding period.

The increases in sales revenues were due to higher metal sales and an increase in PGM basket prices in US dollar terms over the period. However, the benefit of the improved US dollar PGM basket price was somewhat offset by the strength of the Rand, resulting in marginal decreases of the Rand PGM basket prices received compared with the prior corresponding periods.

The Company recorded net losses for the quarter and half-year ended June 30, 2011 of US$23.2 million and US$58.0 million respectively, equivalent to losses per share of US$0.02 and US$0.05.

The Company is evaluating the merit of its current listings on the TSX, AIM and JSE and the potential merits of alternatives.

Outlook

Tom Dale, CEO of Platmin noted that although work had resumed in the Tuschenkomst pit, a focus on sound industrial relations and long-term industrial peace was required. “MCC, the mining contractor, and the NUM have committed to this and external agencies, skilled in relationship building, are being brought in,” he said.

“MCC has indicated that it is currently unable to haul the volumes of rock budgeted at the PPM site due to extensive damage to the fleet. As a result, PPM intends bringing in an additional mining contractor.

“In order that PPM, MCC and the new contractor might focus on core competencies, separation of drilling, blasting and load and haul activities is being discussed. Load and haul would be further separated into waste and reefing operations.  PPM plans to take direct control of drilling and blasting in order to optimize mineral resource management and improve pit conditions.

Mr Dale continued, “The planned changes could take up to six months to implement and will create clear areas of accountability among the various parties. Prior to the industrial action, we were on our way to achieving breakeven and full production. We are confident that, once the revised operating structures are functioning, we will get back on track.”