African Minerals Limited (AML) said Wednesday that its shipment figures for 2012 “is expected to be at the lower end of previous guidance of 5-6Mt.”
This is the third time this year that the Company is revising its shipment production figures downwards.
The company explained in its interim results announcement that “moisture issues experienced during the wet season limited the volume of our All-in-32 shipments.” As a result “Shipments were temporarily suspended due to elevated moisture levels at the end of August” but “shipping recommenced as of 7 October 2012.”
Reuters reports “High moisture content makes the transport of iron ore unsafe, as it could lead to liquefaction of the mineral, which in some instances, has resulted in ships becoming unstable, capsizing and sinking.”
The report added “This month, industry sources flagged the risk of transporting iron ore with high moisture content from Sierra Leone and said it was causing extensive loading delays and could raise shipping costs for miners operating in the country.” AML announced that it has “Arranged for $150m from existing project level funds to be released to fund working capital ?requirements; Obtained a waiver from its lenders for historic breaches of certain debt covenants;” and is “Seeking to convert the existing $100m Standby Facility to a $100-150m revolving credit ?facility.”
Even with the above, AML says it “will need to seek additional sources of funds … if the expected level of sales is not achieved during the ramp up.”
AML’s CEO, Keith Calder, commented “Whilst our financial headroom remains tight and depends on us achieving the expected level of sales, I am confident that other sources of funding will be available if required to enable us to achieve full production, together with an operating team capable of delivering the Company’s goals.”
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