African Minerals - Record Production and Sales Announced

Mineral exploration company, African Minerals, achieved record production and sales during the first quarter of the year. The company announced last week its Tonkolili iron-ore project recorded 5.3 million tons of iron ore in the first quarter of 2014, up 2.2 million from the previous year. First quarter sales for the mining company amounted to 4.6 million tons, up 19 percent from the 3.8 million tons in 2013.

According to chief executive Bernie Pryor, "The Tonkolili project ramp up programme continues to make good progress. The first quarter of 2014 marks our best performance yet, surpassing the record set by Q4 and setting our new operational benchmark. Cash costs continue to improve, falling to $37 per tonne as our production volumes increase, with a commensurate building of cash flow.”

"Preparations are under way for the annual seasonal impacts of the coming wet season, and we look forward to testing our interventions, which should give us the flexibility to successfully manage the coming months, and importantly also reduce our reliance on the production of A32, allowing us to achieve higher received pricing. We are maintaining our guidance of exporting 16-18Mt this calendar year with C1 cash costs of between $34 and $36 per tonne, exiting the year at a sustainable run rate of 20Mtpa, and with cash costs falling to $30/t at that production rate.

Pryor said the company was on par for exporting between 16-million tons and 18-million tons during the calendar year. African Minerals is planning to close the year at a sustainable run rate of 20-million tons a year, with cash costs expected to fall to $30/t at that production rate.

"We are well advanced in our next stage of growth targeting low capital cost optimisation and expansion to our infrastructure capacity. We aim to exit 2014 with a 25Mtpa export capability, and to start the construction of our first friable haematite concentrator facility at the end of this year, with up to 10Mtpa of final product concentrate processing capability being brought online in 2016. This, together with the increased DSO resource recently announced, allows us to extend the life of our concurrent DSO operations and further defer capital for additional concentrator units."

The Tonkolili Iron-ore project is located in the Tonkolili district of Sierra Leone. African Minerals has a 99-year lease, granted by the Sierra Leone Government, to build and manage key rail, port and infrastructure projects.