Iron ore group African Minerals reported a better-than-expected loss in 2011 but scaled back its sales target for the current year after giving an uncertain production outlook.
The group reported a pre-tax loss of $40.41m in the year ended December 31st 2011, well under expectations of a $58.24m loss.
The company made its first shipment in November and said it is on track to become the second-largest iron ore producer in Africa. Since the year-end (March 2012), a transaction with SISG was completed in which it took a 25% stake in African Minerals' Tonkolili project in return for $1.5bn and various offtake arrangements.
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"It gives me great pleasure to present these results having successfully re-commenced iron ore shipments from Sierra Leone after a 30-year break, and having also completed our landmark transaction with SISG," said Executive Chairman Frank Timis. "In the coming year we look forward to bringing our Phase I Tonkolili project up to its optimum production level, to end the year delivering ore to market at a rate of 20Mtpa with attractive cash costs," he said.
The company, whose current mine operations are currently achieving 8Mtpa, said that while it is confidence of achieving the 20Mtpa capacity by the end of year, the mine, rail and port are still in the construction and commissioning phases and so "there remains uncertainty in the tonnage that will be able to be produced during the ramp up period." It said that it now expects to export 10Mt in 2012, down from a previous forecast of 12Mt.
The cash balance at the end of the year stood at $16m. This has since surged in 2012 due to the SISG investment and a convertible bonds issue.
Shares were down 4.04% in early trading on Wednesday.
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