Sierra Rutile Posts 2011 Financial Results (UK)

Sierra Rutile Limited has announced its results for the year ended 31 December 2011.

Key Highlights:

– A successful year of transition and progress.

– Revenue increased 25% to US$55.0 million in the year (2010: US$43.9 million).

– EBITDA1 of US$0.1 million (2010: US$(0.8) million).

– 2011 rutile production in line with guidance: 67,916 tonnes (2010: 68,198 tonnes).

– 2011 ilmenite production of 15,946 tonnes (2010: 18,206).

– 2011 zircon production above guidance: 8,496 tonnes of zircon concentrate (2010: 7,092 tonnes).

– Strategic review delivered in 4Q11 on time and on budget, with multiple expansion options identified, including two fast-track projects that are already underway.

In addition, in a separate announcement, Sierra Rutile has today also provided an update on its production expansion plans. Highlights are:

– Dry mining plant construction commenced. Project progressing on schedule and on budget, first production now expected this year;

– Significant year-to-date cash generation allows dry mining project to be owner-mined. Project economics significantly superior than using contractors;

– Mogbwemo tailings project expanded in scope to include additional dry mining processing, prolonging the project’s life. Plant tenders currently under review;

– New dredge feasibility study well underway with target completion date in early Q3 2012;

– Further optimization potential identified at dry processing plant and other infrastructure will be evaluated in conjunction with increased throughput requirements from expansion projects’ production; and

– Sierra Rutile remains on track to achieve its target of producing rutile at a run rate in excess of 200,000 tonnes during 2014, upon completion of all expansion projects.

Commenting on the results, Sierra Rutile Chief Executive John Sisay said:

“The changes and investments the Company made in 2011 are already paying off. The existing operations are performing well and the expansion projects that have been put in place are on track. As a result, Sierra Rutile is well positioned to capitalise on the strong market opportunity in 2012. As the expansion projects come online in 2013 and beyond, I am confident of the long-term growth prospects for the business.”

Commenting on the production expansion plans, he added:

“We remain very much on plan to achieve our medium term growth target of producing 200,000 tonnes of rutile a year. All our projects are well in process and on schedule, and we are particularly pleased that the strong cash generation of the business will enable us to self fund the dry mining project, thereby providing a stronger economic return in the future.”

[mappress]

Dredging Today Staff, May 10, 2012