14 November 2008
BISICHI MINING PLC
Interim Management Statement
Bisichi Mining PLC (‘Bisichi’), the UK Mining company with direct coal mining
operations in South Africa, is pleased to provide the following update about
* Commercial operation of the Open Cast Coal Reserves of Black Wattle
Colliery (‘Black Wattle’) commenced in June 2008.
* Since the commencement of the Open Cast operation, monthly production at
Black Wattle has consistently averaged more than 120,000 metric tonnes per
* Black Wattle has recently received bank financing for the expansion of its
* Black Wattle has locked in prices for its export product until the 3rd
Quarter of 2009.
* The weakening of international coal prices (which are priced in US dollars)
has, to an extent, been offset by the sharp devaluation of the South
African Rand. Despite coal prices coming off historical highs,
international prices for export coal presently remain strong due to high
demand and infrastructure constraints across the major coal basins.
* Demand for low phosphorous coal may be reduced in 2009 due to a weakening
in the fundamentals of the international ferrochrome market. If pricing
conditions for low phosphorous coal substantially deteriorate in 2009,
Black Wattle has the flexibility to supply this coal to its existing export
and domestic coal customers.
* In line with management expectations, trading profits and cash flow from
mining activities for the Second Half are expected to be strong.
* Income from Bisichi’s UK properties remains steady, with no significant
change from the First Half.
* Management expects property valuations to be reduced in line with that of
the UK property industry. Gearing against property is very low.
Mr Andrew Heller, Managing Director of Bisichi said: ‘The Second Half of 2008
is shaping up to be a very strong period for Bisichi. Production has been
averaging above 120,000 metric tons per month, yields have improved, and we
have managed to fix our export prices earlier when the pricing environment was
more favourable. We will take advantage of opportunities which arise during
this volatile time and we look forward to the coming year with confidence.’
For further information, please call:
Andrew Heller/Tom Kearney, Bisichi Mining PLC 020 7415 5030