JOHANNESBURG (miningweekly.com) – Platinum mining company Lonmin on Monday reported employee cuts, shrinking capital expenditure (capex), lower unit costs and the highest refined platinum production in eight years.

But that did not stop the share price of the London- and Johannesburg-listed platinum-mining company from initially falling by as much as 3.8% to 451c a share before closing the day 0.37% up at 541c a share.

Lonmin intends cutting capex to $136-million in 2016, $110-million in 2017 and then lifting it to $188-million in 2018.

Headed by CEO Ben Magara, the company is guiding lower sales of 700 000 oz of platinum in 2016, falling to 650 000 oz in both 2017 and 2018, and targeting flat unit costs of R10 400 a platinum group ounce (PMG) for three years to 2018

In announcing the production results for the three and twelve months to September 30, Lonmin reported an exit of 2 978 workers, 1 978 of them employees and 1 000 contractors, and a workforce down from 38 292 last year to 35 669 as at September 30 – 26 968 of them permanent employees and 8 701 contractors.

On the safety front, three fatalities marred the safety record, which also resulted in the lost-time-injury frequency deteriorate considerably from 3.34 during the strike of 2014 to 5.41.

Pandora Joint Venture E3 shaft winch driver Bonisile Mapango and Sandvik Mining contractor and Hossy shaft general foreman Mark Potgieter were fatally injured in separate incidences in July and Rowland shaft locomotive driver Zilindile Ndumela was fatally injured on October 26.

A unit cost of R9 841 a PGM ounce for the quarter was an improvement on the R10 339 a PGM ounce for the 12 months, amid the Saffy shaft ramping up to steady-state full production.

Guidance-beating refined platinum production of 759 695 oz was the highest since 2007; total platinum metal-in-concentrate for the year was 740 315 saleable ounces.

A potential 48 000 oz additional ounces failed to be produced owing to Section 54 safety stoppages, which left mine production mined production at only 704 776 oz.

An improved concentrator recovery rate of 86.7% was supported by 1% higher instantaneous PGM recovery of 87.2%.

The Marikana underground mining operations, including Pandora, produced 2.9-million tonnes during the fourth quarter, an increase of 0.3 million tonnes, or 9.4%, on the fourth quarter of the prior financial year.

Fourth-quarter production from the second-generation K3, Rowland, Saffy, 4B/1B and Hossy  shafts was 2.4-million tonnes, an increase of 10.4%, and fourth-quarter production from the first-generation Newman, W1, E1, E2, E3 and Pandora shafts at 0.5 million tonnes was 3.3% higher.

In line with its end-of-life plans, production from Newman shaft decreased by 7.3% year-on-year, with Newman shaft being placed on care and maintenance.

Production from the depleting Merensky opencast operations of 59 000 t was 40.9% lower.

The dollar price of platinum fell 30% in the fourth quarter, when the rand basket price of R10 336 an ounce was 15.3% lower.

Lonmin's operations are situated in South Africa’s Bushveld Igneous Complex, which hosts 70%-plus of known global resources of PGMs, which are used mainly in emission-reducing catalytic converters and jewellery.

The company mines, refines and markets PGMs in a vertically integrated operational structure.