FLOR Fluormin

TIDMFLOR

RNS Number : 8855J

Fluormin PLC

13 August 2012

Fluormin plc

("Fluormin" or the "Company")

QUARTERLY UPDATE

LONDON, UK -- (Marketwire - 13 August 2012)

Fluormin Plc (AIM: FLOR) announces its quarterly update pertaining to its fourth fiscal quarter.

Highlights

Operational highlights for Witkop Fluorspar Mine ("Witkop") for the three months ended 30 June 2012 ("Q4"):

   -       22,651 tonnes of CaF(2) produced (Q3: 19,954 tonnes) 
   -       79.0% CaF(2) recovery (Q3: 71.1%) 
   -       7.6% CaF(2) ROM head grade (Q3 9.0%) 
   -       26,436 tonnes of CaF(2) shipped (Q3: 12,079 tonnes) 
   -       US$468 average price of tonnes shipped (Q3: US$472) 
   -       12,721 tonnes in product inventory as at 30 June 2012 (Q3: 16,376 tonnes) 

- 21,700 tonnes CaF(2) under sales contracts but not yet shipped as at 30 June 2012 (Q3: 46,500 tonnes)

* Note: average prices of shipped tonnage are typically negotiated and settled between three to nine months in advance of shipment and reflect weighted average prices (FOB Durban).

Operational

Q4 has continued to be challenging for the Company. Despite the challenges a significant effort to improve Witkop's operational performance has seen effective progress.

The mining infill drill programme has delivered greater flexibility of ore feed with grade variability falling materially. Furthermore run-of-mine ("ROM") dilution grade has continued to decrease through improved mining methods.

Management effort is currently focused on improving plant availability and CaF(2) recoveries. Operational management changes together with the implementation of expanded planned maintenance procedures have seen a steady decline in unplanned plant interruptions during the quarter. Interruptions to power and water supply were reduced to acceptable low levels. The Company believes that this improved steady state throughput together with reduced grade variability should see overall recoveries continue to improve.

In early July 2012, successful plant modifications to rod mill 1 resulted in a 10% increase to total plant throughput capacity. Similar debottlenecking of rod mill 2 is planned in August with total plant throughput anticipated to increase by a further 10%. The electronic ore sorting project has been placed on hold. Whilst the electronic ore sorting saw a successful increase in CaF(2) grades, the Company has elected to implement higher priority projects with greater capital efficiency (e.g. the aforementioned rod mill bypass).

During the quarter, the Company has implemented substantial cost reductions. In this regard and as reported in the Q3 update, agreements with mining contractors were mostly terminated as at 31 March 2012 with operations now primarily utilising a smaller owner-operated fleet.

Challenges to the fluorspar market have continued, affecting liquidity and resulting in acid grade fluorspar prices lower than at the time of the Company's listing on the AIM Market.

A near mine regional exploration programme has been initiated. The focus of this programme is to identify near term higher grade feed for the plant. In support of this programme Witkop has expanded its geological team.

Valley Deposit

As part of ongoing exploration work the Company has now drilled thirty-two (32) confirmatory holes at the Valley resource located nearby to the current processing plant. The Company is currently evaluating these results with the preliminary analysis indicating that the deposit warrants further testing and evaluation.

Financial

The Company remains well funded with cash and receivables at 30 June 2012 of US$20.7m (31 March 2012: US$20.9 million). The balance includes restricted cash of US$2.2m and US$6.5m cash consideration due from the sale of Fluormin's 20% interest in Kenya Fluorspar Company Limited, which is due to be received on or before 30 November 2012.

Corporate

On 31 May 2012, Mr. Nicholas Davidoff resigned from the Board and was replaced in the role of Non-Executive Chairman by existing board member Mr. James Passin. Mr. Albert Gourley also resigned as co-CEO, but remains on the Board as a non-executive. Mr. Mark Bolton continues in the role of CEO.

The Board wishes to thank Messrs. Davidoff and Gourley for their services in these respective roles.

During the Quarter the Company engaged advisers to assist it with a review of the Witkop Mine. As part of the review process the Company has continued to consider options to reduce costs whilst continuing to consult with key local stakeholders. The process remains ongoing and subsequent announcements shall be made following the review.

About Fluormin Plc

Fluormin is a producer of acid grade fluorspar, an industrial mineral widely used in the chemical and aluminum industries for the making of products such as HFCs (Hydrofluorocarbons used as refrigerant gases like Freon (TM)) and aluminum fluoride.

Contact Information

 
 
Fluormin plc 
 
Mark Bolton, Chief Executive Officer  +44 (0) 20 7034 7150, 
                                       mbolton@fluormin.com 
 
 Westhouse Securities 
 
Martin Davison                        +44 (0) 20 7601 6100, 
                                       martin.davison@westhousesecurities.com 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

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