Nkomati commissions ‘Interim Plant’ ahead of schedule and within budget
3 September 2007
Johannesburg, South Africa and Moscow, Russia Federation
3 September 2007
African Rainbow Minerals Limited (ARM) and Norilsk Nickel, 50:50 JV owners of the Nkomati Nickel Mine in the Mpumalanga Province in South Africa, are pleased to announce that the R384 million (US$62 million) “Interim Plant” Project, released in February 2006, successfully started commissioning two months ahead of schedule, within budget and with zero lost time injuries. Full production from the project is now anticipated earlier in the fourth quarter than originally scheduled.
The current Massive Sulphide Body (MSB) mine is approaching the end of its life. The Interim Plan will mine the disseminated Main Mineralised Zone (MMZ) orebody at an annualised rate of 6,000 tonnes of contained nickel in concentrate for an expected life of mine of 10 years.
The objective of the Interim Plan is to bridge the gap between the depletion of the MSB and the proposed Phase 2 Expansion Project, planned for 2010. The Phase 2 Expansion Project envisages an expansion to produce and average 20,500 tonnes of nickel in concentrate per year over the life of the mine from a large scale open pit and an underground mine. The bankable feasibility study has been completed and is currently being reviewed by the joint venture partners with a decision anticipated during the third quarter.
Peter Breese, Chief Executive of Norilsk Nickel International commented: “The Nkomati Interim Plan project team have done tremendously well to deliver this project ahead of schedule and within budget, given the current cost pressures faced by the mining industry. The Interim Plan is a logical step to sustain nickel production at Nkomati whilst the larger expansion is under consideration. I would also like to commend the team for achieving this success with no lost time injuries rates, which is a superb result.”
ARM’s Chief Executive Officer, André Wilkens said: “The Nkomati Interim Plan Project is yet another example of a project in the ARM stable which we are proud to announce has been delivered on time and within budget. We are confident that the Interim Plan will successfully bridge the gap between the first and second phases in preparation for the large growth project. Furthermore, Nkomati will benefit from improved chrome sales.”
For more information please contact:
Norilsk Nickel www.nornik.ru/en
Head of investor relations
Tel: +7 495 786 8320
African Rainbow Minerals, www.arm.co.za
Executive Director: Investor relations and new business development
Tel: +27 11 779 1476
Corporate Development Manager
Tel: +27 11 779 1587
For media outside Russia:
Alex Buck, BuckBias Ltd
Tel: +44 7932 740 452
Note to Editors
The Interim Plan consists of a new 100,000 tonnes per month concentrator plant, tailings dam and related infrastructure. The joint venture partners have each contributed 50% of the cost. Mining of the MMZ reef will be from two areas; 47,000 tonnes per month from the current underground infrastructure and 53,000 tonnes per month from surface mining, at a combined run of mine grade of 0.58% nickel. In addition to the nickel production, the concentrate produced will contain significant byproducts (copper, cobalt and PGMs) and will continue to be toll refined at various facilities around the world.
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This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and 21E of the Securities Exchange Act of 1934, as amended, that are intended to be covered by the safe harbour created by such sections. All statements other than those of historical facts included in this presentation are forward-looking statements including, without limitation, (i) estimates of future earnings, and the sensitivity of earnings to commodity prices; (ii) estimates of future commodity production and sales, (iii) estimates of future cash costs; (iv) estimates of future cash flows, and the sensitivity of cash flows to commodity prices; (v) statements regarding future debt repayments; (vi) estimates of future capital expenditures; (vii) estimates of reserves, and statements regarding future exploration results and the replacement of reserves. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, commodity price volatility, currency fluctuations, increased production costs and variances in ore grade or recovery rates from those assumed in mining plans, as well as political and operational risks in the countries in which we operate and governmental regulation and judicial outcomes. The Company does not undertake any obligation to release publicly any revisions to any “forward-looking statement” to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.
Norilsk Nickel – Forward-Looking Statements
Certain statements contained herein are forward-looking statements that reflect current views with respect to future events. The forward-looking statements are based on the opinions and estimates of both African Rainbow Minerals management and Norilsk Nickel management, or on opinions and estimates provided to and accepted by management. These opinions and estimates include, but are not limited to, commodity prices, changes in government legislation and regulations, geological estimates, competitive factors, costs of production and capital costs, foreign exchange rates, and litigation. Forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied. Readers are therefore cautioned not to place reliance on any forward-looking statement.