Consolidated Minerals Limited ('Consmin' or the 'Company')

Report for the Second Quarter Ending 30 June 2016

ST HELIER, Jersey, August 26, 2016 /PRNewswire/ --

Consmin, a leading manganese ore producer with mining operations in Australia and Ghana, announces its annual results for the period ending 30 June 2016.

Commenting on the results, David Slater (CFO of Consmin) said:  

"During the second quarter of 2016 Consmin's production decreased by 27% compared to the corresponding period in 2015. This reduction was due to the decision taken to suspend operations at the Australian Woodie Woodie mine with effect from 2^nd February 2016 and commence the transition into care and maintenance. As a result production from Australia was 72% lower in the quarter with production only relating to limited processing of remaining ROM stockpiles. Production from our Nsuta mine in Ghana in the quarter, however, increased 15% compared to the corresponding period in 2015 underpinned by improved demand for the Company's Ghanaian ore. 

The manganese C1 cash cost for the quarter was $1.30/dmtu, an improvement of 35% from $1.99/dmtu for Q2 2015. The C1 cash cost for Q2 2016 does not include any costs or production from the Australian operations due to them being placed on care and maintenance. 

The company's manganese ore shipments totalled 628k dry tonnes during Q2 2016, a decrease of 10% compared to Q2 2015. Shipments of Australian manganese ore were limited to existing stockpiles in place at the time of the suspension of operations with sales efforts focussing on maximising revenue due to the improved pricing seen in Q2 2016 in comparison to that in Q1 2016. Sales tonnes from Ghana were 4% lower than in Q2 2015 due to the planned final shipment of June 2016 slipping into the first few days of July 2016. Including this vessel, sales of Ghanaian ore surpassed 2 million tonnes on an annualised basis during the quarter, which is in line with the Ghana record sales levels achieved in 2013. 

The quarterly average 44% benchmark CIF price for manganese lump in Q2 2016 was $3.03/dmtu, up 46% from $2.07/dmtu in Q1 2016. This significant price rise was attributable to a very substantial drawdown of China's port stocks in Q1 2016, following the production curtailments from major ore suppliers, including the start of care and maintenance at our Woodie Woodie mine. As the result of an improvement in steel production and prices in China, ore suppliers were able to leverage reduced availability of manganese ore to push up prices aggressively, leading to high grade ore prices achieving levels over $4.00/dmtu in April and May. It should be noted that these price rises were not driven by market fundamentals but rather acute supply tightness and such prices began to unwind towards the end of Q2 with prices for high grade ores falling to below $3.00/dmtu for July shipments.