Lonmin share price drops sharply after disappointing first quarter
The mining conglomerate’s share price falls nearly 23%, with few signs that things are likely to be better in 2017
World number three platinum miner Lonmin’s share price took a battering on the JSE on Thursday, down 22.56% to R23.31 at the close, after it warned of losses at its operations in the first quarter of its financial year. It blamed continued low metal prices, which were also forcing it to review plans for capital expenditure. Lonmin CEO Ben Magara said recently that the past eight years of a stagnant platinum price would irreparably damage platinum mining in SA, the world’s single largest source of primary platinum. Analysts said Lonmin burned through $124m in the quarter, leaving it with $49m in net cash to see out the year. Total liquidity with undrawn facilities rose to $414m. Lonmin maintained its full-year platinum production target of between 650,000oz and 680,000oz despite the disappointing first quarter. “Lonmin is highly geared to platinum group metal prices and at current levels would not be cash neutral. We continue to manage our cash flows and balance sheet through initiat...
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