Reporting Season Arrives for Mining Companies

By Charlotte Mathews
JOHANNESBURG (Business Day) — The biggest events on global mining calendars this week will be the release of year-end results by resources giant BHP Billiton tomorrow and by platinum miner Impala Platinum on Friday.

Several smaller local companies are also due to report results.
Diversified miner Metorex, whose prospects are heavily dependent on the copper price, reports for the year to June tomorrow, while investment holding company Mvelaphanda Resources and gold miner DRDGOLD report on Thursday.
The most recent analysts’ consensus forecast for BHP Billiton is earnings of $1.59-$2.12 a share, an increase of 53%-104% compared with last year.
Analysts expect the results will be driven mainly by high prices for oil, iron ore and base metals, especially copper.
But an area that is likely to lag is energy coal, where issues about contracts and production are affecting almost all coal producers despite higher coal prices. In South Africa, BHP Billiton [NYSE:BHP; LSE:BLT] owns Ingwe Coal, which is one year into a three-year recovery plan.
Implats [JSE:IMP] recently issued a trading update indicating its headline earnings would rise 35%-40% compared with last year. Its previous guidance of a 20%-30% increase disappointed the market.
It said the higher figure resulted from the weaker rand at the end of the financial year. However, it was still not as high as analysts had been forecasting earlier this year, as the consensus forecast was for an increase of about 58%.
Metorex [OTC:MRXLF] said late last month it would report an increase of 216%-275% in headline earnings a share for the year to June, despite an increase in the number of issued shares.
The company did not give reasons for the surge in profits but it was evident at interim stage that the group was benefiting from high prices for gold, copper, fluorspar and antimony.
Production from Metorex’s Chibuluma South copper operation was ramped up in the first half and was expected to reach design capacity of 15,000 tons of copper a year in the second half.
Metorex said last week it had completed construction of its Ruashi phase one processing plant in the Democratic Republic of Congo and it would be in full production next month.
Mvelaphanda Resources will reflect the profits already reported by Gold Fields, Trans-Hex and Northam, in which it holds stakes.
However, investors will also look for any announcements of new deals after the group’s black empowerment shareholding increased to 30% last month through a restructuring of Mvelaphanda Holdings’ stake.
DRDGOLD [NASDAQ:DROOY] warned shareholders last month its headline loss a share for the year would be 15%-25% greater than last year’s because of after-tax losses from its Australasian operations.

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