Ben Magara. Picture: BLOOMBERG/ WALDO SWIEGERS
Ben Magara. Picture: BLOOMBERG/ WALDO SWIEGERS

Lonmin had staved off a potentially crippling breach of a vital covenant with lenders by sustained improvement in its operational performance in the third quarter of its financial year, leaving it in a more secure position, despite continuing head winds from low metal prices, CEO Ben Magara said.

The improved operational performance at Lonmin’s major mines, the completion of the purchase of the remaining stake in the Pandora joint venture, as well as higher cash levels in the company had made discussions with the group’s lenders about the tangible net worth covenant more constructive, Magara said on Monday.

The covenant came close to being breached about three months ago.

“The most critical thing for that covenant is the underlying performance,” he said.

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