Boost in earnings, but Metorex declares no dividend

Mining group Metorex saw a massive boost in headline earnings for the year ended June—from just under R5-million a year ago to almost R27,7-million. This translated into headline earnings per share of 13,6 cents versus 2,8 cents a share previously.

This was achieved on the back of a growth in gross revenue from R878,5-million to just over a billion rand.

With the group’s present development and growth programmes and associated cash requirements, it was considered inappropriate to declare a dividend for the year. Last year the group declared a dividend of three cents a share.

The group experienced a particularly successful year which saw the funds required for the capital development of the Ruashi and Etoile copper/cobalt projects in the Democratic Republic of Congo being raised and the group’s operations being reorganised with the closure of Maranda, O’Okiep and Chibuluma West and sales of Metmin and the Perkoa zinc deposit in Burkina Faso.

After delays brought about by poor ground conditions, the decline shaft at Chibuluma South was also commissioned, enabling ease of access for machines, men and materials and increased production levels.

The largest contributor to the group’s mineral sales was from the Wakefield coal division with a 65% increase in sales volumes and 85% increase in sales revenue.

This was the first full year of coal production from the Middelburg Townlands Colliery. The coal division was also the largest contributor to the group’s mining profit.

Looking ahead, Metorex said the rand/dollar exchange rate was likely to track in its present range in the short to medium term but the dollar weakness was likely to maintain the present strength in the dollar-denominated commodity prices.

“Productivity improvements are continuously being sought. Subsequent to the year-end, the Wakefield Coal group has increased its BEE shareholding from 9,5% to 26% through the issue of new shares for a cash consideration of R44-million. Approximately half of these funds will be applied to the reduction of debt in that company, with the remainder being applied to increasing plant capacity at the Middelburg Townlands Colliery by approximately 40%,” it added.

Chibuluma South Mine was building up its production levels, it said, and had reached a level of 20 000 milled tonnes per month in August 2005 and was expected to achieve production design capacity of 40 000 tonnes per month by April 2006.

“Improved grades and robust antimony prices should result in Consolidated Murchison contributing to the group’s earnings and Barberton is budgeted to perform in line with the previous year.

“The Ruashi concentrator and Sable treatment plant are planned for completion in the forthcoming financial year and should be operational during the final quarter.

“Vergenoeg fluorspar will continue with its production expansion and quality improvement programmes.

“The costs of closure of the various operations commenced during the current year and are expected to reduce significantly during the forthcoming year.” - I-Net Bridge

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