Gold Silver Reports — Lonmin Plc climbed the most in more than three months as the world’s third-largest platinum miner kept costs down in the latest quarter, helping it generate cash even as the metal’s price declined.
The stock rose as much as 12 percent in London after the Johannesburg-based company said Monday that net cash increased 15 percent to $86 million as of June 30. The producer cited improving performance of its newer so-called Generation 2 shafts, which make up most of its output.
With the highest costs of the top three platinum producers, Lonmin is battling to stay cash positive amid an almost 50 percent plunge in platinum prices in the past six years. Concerns about slowing demand for the metal due to growth of electric cars and lower sales of diesel vehicles in Europe have pressured prices, while supply has been stable in top producer South Africa.
Platinum-group metals are mainly used to curb harmful car emissions, and also used in jewelry and other industrial products.
“We continue to find levers to pull, in this ‘lower-prices-for-longer’ environment and to make the improvement of our performance a priority,” Chief Executive Officer Ben Magara said in a statement Monday.
Lonmin was up 8.2 percent at 73 pence by 10:02 a.m. in London, curbing this year’s decline to 48 percent.
Costs were lower than expected, falling 4.7 percent from the previous quarter to 11,278 rand ($867) an ounce in the three months to June 30. Revenue totaled 11,506 rand per ounce of platinum-group metals. Neal Bhai Reports
