OMH delivers record half-year production
OM Holdings Limited (OMH) reported its second highest quarterly tonnage of manganese on record having produced 184,242 tonnes grading 38.7% Mn in the December quarter at its Bootu Creek mine. The company also announced a record half yearly production of 389,614 tonnes during 2H 2009, representing a 51% increase from 1H 2009 and a 20% increase from the previous half yearly record of 2H 2008.
OMH said it achieved a record shipping of 747,000 tonnes of product during the year, 41% above 2008 shipping performance, and it included 206,114 tonnes during the fourth quarter.
The company said unit cash operating costs for the December quarter were $4.29 per dry metric tonne unit, which were above expectations and impacted by lower production in the month of November.
However, OMH forecast C1 unit cash operating costs for the 2010 year to be sustainable below the $3.50/dmtu level.
The company said its 2010 annual production target is one million tonnes, comprising 750,000 tonnes of 38% grade and 250,000 tonnes of 35% grade products.
OMH said recent reports are forecasting that Chinese crude steel production may reach 620 million tonnes in 2010. As such, the company said demand for manganese ore would remain strong.
The company said its annual Marketing and Trade Conference held in China during January 2010 revealed a very positive demand outlook for 2010 and customer product demand in excess of OMH’s production capacity, signalling a strong 2010 outlook.
Meanwhile, OMH announced that its subsidiary OM (Manganese) Limited (“OMM”) has signed $600,000 Farmin Agreement with Archer Exploration Limited (AXE) o further explore the Jamieson Tank manganese prospect on South Australia’s Eyre Peninsula.
Under the terms of the agreement, OMH said OMM has the right to earn a 60% interest in all ferrous minerals (manganese and iron ore) at Jamieson Tank by funding exploration expenditure to the value of $600,000 over a four-year period.
This agreement is conditional upon the completion of due diligence by OMM within 90 days.
As at 1047 AEDT, OM Holdings shares were down 1c to $1.80.
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