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Merafe expects lower earnings

24th July 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – JSE-listed Merafe Resources expected impairments to drag down its earnings for the six months ended June 2013.

The company expects basic earnings a share to fall to between 1.2c and 1.4c and headline earnings a share to between 3.5c and 4c for the interim period to June this year, compared with the 5.5c reported in the first half of the previous financial year.

The impairment loss was attributed to the Glencore–Merafe joint venture’s consideration of the sale of the Horizon mine as part of its ongoing asset portfolio review.

Merafe said in a statement that it had closed the interim period with a cash balance of R47-million and had long-term debt of R560-million owing to Absa Capital.

Meanwhile, the company lifted ferrochrome production by 23%, from 118 000 t in the six months ended June 2012, to 145 000 t during the first half of 2013, on the back of having increased its operating capacity from 64% to 79%, additional winter month production, operational improvements and the impact of the successful commissioning and ramp-up of the Tswelopele pelletising plant.

Ferrochrome production volumes were, once again, offset during the first half of 2013 by the Eskom power buyback agreement.

Merafe expects to publish its interim results on August 6.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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