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Operations Update
London, 6 December 2007 - International Ferro Metals Limited (LSE: IFL), the integrated ferrochrome producer, is pleased to announce that the replacement programme for its electrode pressure rings has been successfully completed one month ahead of schedule.
Mining has begun at a new open pit mine on the Buffelsfontein site to provide additional access to the chromite deposit thus increasing current tonnage to a level above that currently consumed by its two ferrochrome furnaces. The surplus production will be stockpiled ahead of the Company’s planned expansion of its smelting capacity.
The four percent appreciation of the US dollar against the Rand in the last month will assist in restoring average profit margins throughout the South African ferrochrome industry. Published ferrochrome prices are anticipated to increase to a record high for sales in the first quarter of 2008.
Replaced Electrode Pressure Rings
Successful replacement of all the pressure rings, which hold the contact points against the electrodes within each of the Company’s two furnaces, was completed over one month ahead of schedule. The full operating capacity of the integrated facility has been fully restored.
Production Disruption
The consequential loss of production from replacing the pressure rings and remedying the earlier failure of the ball mill gear box through both replacement time and associated power ramp-ups was approximately 30,000 tonnes; in line with our initial predictions.
All components of the integrated ferrochrome facility are operating at capacity and the plant has resumed production at the rate of 2, 67,400 tpa.
Over the last five weeks all South African ferrochrome producers have suffered electricity supply disruptions imposed by Eskom. While such disruptions are expected to be an ongoing issue as Eskom brings additional electricity generation online, IFL’s production suffered only minimal disruption and the Company is able to coincide maintenance activity during these reductions in electricity supply. Furthermore, under its guaranteed electricity supply agreement Eskom has part compensated the Company for the disruption.
New Open Pit Mine Increases Production
The Company has increased mine production above that required to feed the current facility. A new open pit mining operation has been established on the Buffelsfontein site. This new mining operation will not interfere with operations at the Lesedi decline and is forecast to increase the rate of chromite extraction at Buffelsfontein to 1, 10,000 tonnes per month. The current integrated facility consumes 80,000 tonnes of chromite per month. The surplus production will be stockpiled ahead of the Company’s planned expansion of its smelting capacity. This open pit mining is expected to operate for at least the next seven months at which time its production potential will be reassessed.
The reserve confirmation and mine plan for the adjacent Skychrome deposit are being developed by SRK and no problems have been encountered.
Ferrochrome Price
The ferrochrome industry anticipates an increase from 1st January 2008 in the published ferrochrome price which, since 1st July 2007, has been US$1 /lb. This expectation is supported by the Company’s negotiations with its customers for offers received to purchase a portion of the Company’s production at above US$1/lb of ferrochrome. This anticipated price increase should be enhanced by the four per cent appreciation of the US dollar against the South Africa Rand in the last month.
For more information please visit the Company’s website, www.ifml.com or contact:
International Ferro Metals Limited
Stephen Turner, Managing Director
Mob: +61 (0)418 440 844
Brunswick Group
Carole Cable / Alexandra Tweed
Tel: +44 (0)20 7404 5959
Numis Securities Limited
John Harrison
Tel: +44 (0)20 7260 1000
About International Ferro Metals:
IFL is a ferrochrome producer that has recently commenced shipments from its integrated chromite mine and ferrochrome processing operations in South Africa for use in the global stainless steel industry.
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