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Sierra Rutile highlights its key finances & operations in 2013

Sierra Rutile highlights its key finances & operations in 2013

Please find below key 2013 financial and operational highlights:

Significant Operational Highlights:

27% increase in rutile production to 120,349 tonnes. Strong results delivered from company-wide focus on operating cost reduction and improved operating efficiency as illustrated by a 23% reduction in rutile production cash costs1.

A full production year with zero lost time injuries, out of a workforce of over 1,500 staff, indicative of the energy and commitment invested in this area.

Completion of preparation and development work in order to execute the Gangama Dry Mining project at a reduced capital cost of US$81 million, a decrease of over 21% from original estimates.

70,000 tonnes rutile supply agreement signed with a leading pigment producer.

Memorandum of Understanding signed with SmolPawa Sierra Leone Ltd. to become a cornerstone purchaser for its Moyamba hydro project which will support future power cost savings.

Agriculture project advanced to include planting of over 150 hectares of oil palm trees, 37 hectares of rubber trees, 3 hectares of cacao trees and 13 hectares of pineapples. The objective is to plant 5,900 additional hectares over the next three years, with the potential to create a total of 1,600 jobs for people in the surrounding communities.

Through our recently initiated Localisation Plan we are investing in continuing to develop a skilled workforce of Sierra Leonean nationals.  This both fulfils our commitment to the Local Content Policy and Mines and Minerals Act 2009, and strategically manages the Company for succession needs, talent management and skills shortages.

Financial Highlights:

The revenue generated was US$123.4 million.

EBITDA2 of US$35.0 million.

Significant reduction in operating costs despite reduced impact from by-product sales:

23% reduction in rutile cash production costs1 to US$588/tonne (2012: US$768/tonne).

22% reduction in operating cash costs3 to US$683/tonne (2012: US$881/tonne).

27% reduction in all-in cash costs4 to US$763/tonne (2012: US$1,047/tonne).

Profit for the year of US$9.9 million, making Sierra Rutile the best performer, by margin, in its peer group5.

Cash and cash equivalent of US$22.6 million and total current assets of US$89.9 million as at 31 December 2013.

Commenting on the results, Sierra Rutile CEO John Sisay said:

“Despite challenging market conditions in 2013, the Company has continued to illustrate its ability to generate value for stakeholders through production growth, cost efficiency and strategic positioning as the market begins to strengthen. Going forward, we will continue to execute our strategy of developing low-capex projects and achieving continuous efficiency improvements. In line with this strategy, I am pleased to report that the Gangama Dry Mining project is now fully-prepared for implementation pending the right market conditions.

“Our focus on operational excellence, value optimisation and cost discipline is driven by our commitment to make a real difference to the people of Sierra Leone. Within the communities in our area of operations, this has resulted in a steady and visible improvement in social services, infrastructure and sustainability. Our local communities are one of our most important stakeholders and it is critical that a better Sierra Rutile results in better lives for those in these communities. Their support is, and continues to be, imperative to our success and I thank them for it.

“I would also like to thank our employees for their dedicated efforts and the way they have embraced.  Thank you also to our other key stakeholders, namely our investors, the Government and people of Sierra Leone, whose on-going support has positioned us well to continue to realise Sierra Rutile’s full potential.”   


1Rutile cash cost of production less by-product revenue divided by tonnes of rutile produced.
2Earnings before interest, tax, depreciation and amortisation, excluding exceptional items and non-cash stock option expense.
3 Total operating cash cost less by-product revenue divided by tonnes of rutile produced.
4 Total operating cash cost plus stay-in-business capital cost less by-product revenue divided by tonnes of rutile produced.
5 Peer group refers to listed titanium feedstock producers Iluka Resources Limited and Kenmare Resources plc and profit margin refers to profit after tax divided by revenue.

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