Wednesday, July 6, 2022

Minergy MARKET UPDATE

Minergy Limited is providing this voluntary update to the market as it has entered a closed period, which will end when the interim results for the period ended 31 December 2021 are released. This is expected to take place around the middle of March 2022. Minergy will then update the market through a cautionary announcement, followed by the release of the interim results and commentary. This update provides high-level feedback on the performance, market conditions and developments for the six-month period ending 31 December 2021 (“the six-month period”). The six-month period ending 31 December 2020 (“the comparative six-month period”) is used as a comparative for the performance indicators mentioned below.

OPERATIONAL UPDATE

Substantial progress was made toward reaching nameplate capacity during the six-month period. Achievements included producing the highest six-monthly volumes across all disciplines since the inception of the mine. With support from its mining contractor, Minergy is now capable of achieving nameplate capacity of 125,000 tonnes per month. Overburden volumes increased fourfold versus the comparative six-month period. A similar trend was evident in the amount of coal that was extracted, with growth of 100% being achieved. Record tonnage in excess of 110,000 tonnes of coal was mined in October 2021. Stage 4 of the Processing Plant (Rigid Screening and Stock Handling section) was also successfully commissioned. Plant construction is thus complete, and is now fully operational as designed. Resulting benefits include savings in processing costs, a stabilised supply, and further support for achieving nameplate capacity. Daily average feed rates increased significantly and are being consistently achieved. Processed volumes increased in line with mining data, with yields remaining stable, and a record throughput of 108,000 tonnes was achieved in October 2021. However, lower volumes were recorded during November and December 2021, impacted by the new COVID-19 variant and the related effect on workforce availability and border access, as well as by rain interruptions and lower regional sales as explained below. The higher rainfall did not result in flooding as was the case in the comparative six-month period, thanks to good drainage solutions being in place at the mine.

SALES AND MARKET CONDITIONS

Following increased production volumes, sales tonnes increased by more than 55%. Pleasingly, a better product mix was obtained from the fully commissioned plant, with improved sales of the more profitable pea product being recorded. Against the comparative six-month period, selling prices increased, attributable to a stable South African Rand, an improved sales mix was achieved, and prices increased.

RELATED STORIES

Read this week's paper