LONDON (ShareCast) - Lonmin (LSE: LMI.L - news) , the world's third largest platinum producer, posted quarterly production ahead of targets despite strikes that hit the South African mining sector last year.
The FTSE 250 company has spent the past few months working on resuming output at the Marikana mine following strikes in August and September that left 46 people dead, including 34 who were shot by police.
Lonmin had to turn to investors in November (Xetra: A0Z24E - news) to raise $817m to avoid breaching lending terms. The company is also without a Chief Executive after Ian Farmer announced his resignation in December due to an ongoing illness.
However, the group said performance has exceeded planned ramp up with a slight drop in platinum production for last three months of 2012.
The business produced 174,253 troy ounces of platinum in concentrate in the quarter, down 2.1% from a year earlier.
"This demonstrates the successful execution of the operational plans we put in place for the safe re-start and ramping up of production following the labour unrest that preceded the period," the group said.
Quarterly platinum sales rose 16.7 % to 108,576 ounces while total platinum group metals (PGM) sales decreased by 3.7% to 182,576 ounces.
Safety-related work stoppages caused the company to lose 19,000 ounces in the first quarter, down from 177,000 ounces lost for the same period the year earlier.
Lonmin repaid its $700m bank debt facilities, cancelling a $300m term loan facility and leaving a $400m revolving credit facility available to be drawn when required.
Due to a successful resumption of production so far, Lonmin is maintaining its forecast for full-year output of 680,000 ounces and sales of 660,000 ounces.
It is also maintaining capital expenditure guidance for the year of around $175m, absent of any material safety or industrial relations stoppages.
"Our operations delivered a strong performance in the quarter ahead to exceed our planned ramp up targets," Lonmin stated.
"Encouragingly, the second quarter is proceeding well with the momentum of the first quarter having already been re-established. We remain focused on embedding the safety protocols that have underpinned the successful start up reflected in our solid production results."
Shares were up 9.43% to 344.70p at 10:04 Thursday.