SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.
|
|
|
|
|
WMC RESOURCES LTD
|
|
|
|
|
By:
|
|
/s/ R.E. Mallett
|
|
Name:
|
|
R.E. Mallett
|
|
|
|
|
Title:
|
|
Assistant Company Secretary
|
|
|
|
|
Date:
|
|
19 Aug 2004
|
To: The Manager
Announcements
ASX Company Announcements Office
Public Announcement 2004-18
Please find attached media release from the South Australian Premiers office relating
to WMC Resources decision to invest a further $50 million over two years in a major study to determine whether there should be a multi-billion expansion of the Olympic Dam mine in South Australias mid-north.
A copy of this public announcement will be published on WMCs web site at
www.wmc.com
later this morning.
Ross
Mallett
Assistant Company Secretary
26 May 2004
For further information please contact:
Media contact:
Troy Hey
Group Manager - Public Affairs
Mbl: 0419 502 852
Investor/Analyst contact:
Adrian Fernando
Manager - Investor Relations
Mbl: 0438 068 049
|
|
|
|
|
|
|
|
|
|
|
WMC Resources Ltd
|
|
|
|
|
|
ACN 004 184 598
|
|
|
|
|
|
|
|
|
|
GPO Box 860K
|
|
|
|
|
|
Melbourne Vic. 3001
|
|
|
|
|
|
Australia
|
|
|
|
|
|
|
|
|
|
Level 16 IBM Centre
|
|
|
|
|
|
60 City Road
|
|
|
|
|
|
Southbank Vic. 3006
|
|
|
|
|
|
Australia
|
|
|
|
|
|
|
|
|
|
Tel +61 (0)3 9685 6000
|
|
|
|
|
|
Fax +61 (0)3 9685 6115
|
|
|
|
|
|
News Release
|
|
Premier Mike Rann
Minister for Economic Development
Minister for Social Inclusion
Minister for the Arts
Minister for
Volunteers
|
Wednesday 26 May 2004
$50 MILLION STUDY TO GAUGE
FUTURE OF OLYMPIC DAM
WMC Resources Ltd today announced it will invest
a further $50 million over two years in a major study to determine whether there should be a multi-billion expansion of the Olympic Dam mine in South Australias mid-north.
Premier Mike Rann says the SA Government is giving its full support to the study which will help WMC determine whether it should double the
capacity of the mine at a cost of between $2 billion and $4 billion by the end of the decade.
The potential for the Olympic Dam mine is huge.
An expansion of this size could lead to the creation of hundreds of jobs and further growth in the population of the Roxby Downs township, which is already 4,000.
This would also help the State achieve many of the targets laid out in the State Strategic Plan including increasing minerals
production to $3 billion and increasing minerals processing by a further $1 billion by 2020 as well as increasing SAs population to 2 million by 2050.
It should also help us in our target of trebling the value of SAs export income to $25 billion by 2013.
At present, the Olympic Dam is the worlds eighth largest copper deposit and
largest known uranium deposit. Last year, it generated $670 million in export income for Australia.
This has the potential to double if the expansion goes ahead, Mr Rann said.
WMC has already invested $4 billion in developing Olympic Dam, including $600 million in the past three years and another $80 million during this year in mine
development.
Major activities for the next phase of the Study include:
|
|
|
an additional 72 km of drilling to improve understanding of the undeveloped southern deposit
|
|
|
|
the assessment of mining and processing methods for the southern deposit and development of a whole-of- deposit mine plan;
|
|
|
|
environmental studies, including the scoping of a new Environmental Impact Statement;
|
|
|
|
a detailed investigation of options for future water and energy supply to the operation
|
|
|
|
preparation of a logistics plan for the operation, including the possibility of linking Olympic Dam to the rail network; and
|
|
|
|
identification of future land requirements, support for the Roxby Downs township and associated infrastructure
|
WMC Resources CEO, Andrew Michelmore says Olympic Dam is already Australias largest
underground mine and mineral processing operation.
Olympic Dam currently
has an annual production capacity of 235 000 tonnes of copper, 4 500 tonnes of uranium and 100 000 ounces of gold.
Studies so far have shown that by extending underground mining, Olympic Dam could produce up to 350 000 tonnes of copper per year.
Open pit mining, when added to continuing underground operations, could increase copper
production to in excess of 500 000 tonnes per annum.
By 2006, WMC will
be in a position to identify a single preferred life of mine development plan for the total resource. That option would become the subject of a final feasibility study, Mr Michelmore said
The development study work will be in addition to ongoing assessment of Olympic Dams
future energy needs, including the option of connecting Olympic Dam to a natural gas network.
In its Study, WMC will work closely with the SA Economic Development Board and the State Government Task Force for further development of Olympic Dam, appointed by the Premier in 2002.
For further information contact Jill Bottrall on 8463 3362 or 0419 99 01 60.
To: The Manager
Announcements
ASX Company Announcements Office
Public Announcement 2004-20
In accordance with Listing Rule 2.7 please find enclosed Appendix 3B, application for
quotation of additional securities.
Ross
Mallett
Assistant Company Secretary
7 July 2004
|
|
|
|
|
|
|
|
|
|
|
WMC Resources Ltd
|
|
|
|
|
|
ABN 76 004 184 598
|
|
|
|
|
|
|
|
|
|
GPO Box 860K
|
|
|
|
|
|
Melbourne Vic. 3001
|
|
|
|
|
|
Australia
|
|
|
|
|
|
|
|
|
|
Level 16 IBM Centre
|
|
|
|
|
|
60 City Road
|
|
|
|
|
|
Southbank Vic. 3006
|
|
|
|
|
|
Australia
|
|
|
|
|
|
|
|
|
|
Tel +61 (0)3 9685 6000
|
|
|
|
|
|
Fax +61 (0)3 9686 3569
|
Appendix 3B
New issue announcement
Rule 2.7, 3.10.3, 3.10.4,
3.10.5
Appendix 3B
New issue announcement,
application for quotation of additional securities
and agreement
Information or
documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASXs property and may be made public.
Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.
Name of entity
WMC Resources Ltd
ABN
74 004 184 598
We (the entity) give ASX the following information.
Part 1 - All issues
You must complete the relevant sections (attach sheets if there is not enough space).
|
|
|
|
|
|
|
1
|
|
+
Class of
+
securities issued or to be issued
|
|
Fully paid ordinary shares.
|
|
|
|
|
|
2
|
|
Number of
+
securities issued or to be issued (if known) or
maximum number which may be issued
|
|
346,500
|
|
|
|
|
|
3
|
|
Principal terms of the
+
securities (eg, if options, exercise
price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)
|
|
The securities in (2) above comprise of 346,500 shares arising from options which were exercised during the period.
Option exercise prices and expiry dates are detailed in Attachment
A.
|
+ See chapter 19 for defined terms.
|
1/1/2003
|
Appendix 3B Page 1
|
Appendix 3B
New
issue announcement
|
|
|
|
|
|
|
|
|
4
|
|
Do the +securities rank equally in all respects from the date of allotment with an existing
+
class of quoted
+
securities?
If the additional securities do not rank equally,
please state:
the date from which they do
the extent to which they participate for the next dividend, (in the case of a trust,
distribution) or interest payment
the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
|
|
Securities rank equally from date of allotment.
|
|
|
|
|
|
5
|
|
Issue price or consideration
|
|
Refer to Attachment A.
|
|
|
|
|
|
6
|
|
Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)
|
|
Refer to Item 3 above.
|
|
|
|
|
|
7
|
|
Dates of entering
+
securities into uncertificated holdings or
despatch of certificates
|
|
Following allotment of shares
|
|
|
|
|
|
Number
|
|
+
Class
|
|
|
|
|
|
|
8
|
|
Number and
+
class of all
+
securities quoted on ASX (
including
the securities in clause 2 if applicable)
|
|
1,157,655,181
|
|
Fully paid ordinary shares.
|
+ See chapter 19 for defined terms.
|
|
|
|
|
Appendix 3B Page 2
|
|
1/1/2003
|
Appendix 3B
New issue announcement
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
+
Class
|
|
9
|
|
Number and
+
class of all
+
securities not quoted on ASX (
including
the securities in clause 2 if applicable)
|
|
Refer to Attachment A.
|
|
|
|
|
|
|
|
|
10
|
|
Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)
|
|
N/A.
|
|
|
|
|
|
Part 2 - Bonus issue or pro rata issue
|
|
|
|
|
|
11
|
|
Is security holder approval required?
|
|
_________________________________________________________________________________
|
|
|
|
|
|
12
|
|
Is the issue renounceable or non-renounceable?
|
|
_________________________________________________________________________________
|
|
|
|
|
|
13
|
|
Ratio in which the
+
securities will be offered
|
|
_________________________________________________________________________________
|
|
|
|
|
|
14
|
|
+
Class of
+
securities to which the offer relates
|
|
_________________________________________________________________________________
|
|
|
|
|
|
15
|
|
+
Record date to determine entitlements
|
|
_________________________________________________________________________________
|
|
|
|
|
|
16
|
|
Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?
|
|
_________________________________________________________________________________
|
|
|
|
|
|
17
|
|
Policy for deciding entitlements in relation to fractions
|
|
_________________________________________________________________________________
|
|
|
|
|
|
18
|
|
Names of countries in which the entity has
+
security holders who will not be sent new issue documents
Note: Security holders must be told how their entitlements are to be dealt with.
Cross reference: rule 7.7.
|
|
_________________________________________________________________________________
|
|
|
|
|
|
19
|
|
Closing date for receipt of acceptances or renunciations
|
|
_________________________________________________________________________________
|
+ See chapter 19 for defined terms.
|
|
|
|
|
1/1/2003
|
|
Appendix 3B Page 3
|
Appendix 3B
New
issue announcement
|
|
|
|
|
|
|
|
|
|
|
20
|
|
Names of any underwriters
|
|
_________________________________________________________________________________
|
|
|
|
|
|
21
|
|
Amount of any underwriting fee or commission
|
|
_________________________________________________________________________________
|
|
|
|
|
|
22
|
|
Names of any brokers to the issue
|
|
_________________________________________________________________________________
|
|
|
|
|
|
23
|
|
Fee or commission payable to the broker to the issue
|
|
_________________________________________________________________________________
|
|
|
|
|
|
24
|
|
Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of +security holders
|
|
_________________________________________________________________________________
|
|
|
|
|
|
25
|
|
If the issue is contingent on +security holders approval, the date of the meeting
|
|
_________________________________________________________________________________
|
|
|
|
|
|
26
|
|
Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled
|
|
_________________________________________________________________________________
|
|
|
|
|
|
27
|
|
If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders
|
|
_________________________________________________________________________________
|
|
|
|
|
|
28
|
|
Date rights trading will begin (if applicable)
|
|
_________________________________________________________________________________
|
|
|
|
|
|
29
|
|
Date rights trading will end (if applicable)
|
|
_________________________________________________________________________________
|
|
|
|
|
|
30
|
|
How do
+
security holders sell their entitlements
in
full
through a broker?
|
|
_________________________________________________________________________________
|
|
|
|
|
|
31
|
|
How do
+
security holders sell
part
of their
entitlements through a broker and accept for the balance?
|
|
_________________________________________________________________________________
|
+ See chapter 19 for defined terms.
|
|
|
|
|
Appendix 3B Page 4
|
|
1/1/2003
|
Appendix 3B
New issue announcement
|
|
|
|
|
|
|
32
|
|
How do
+
security holders dispose of
their entitlements (except by sale through a broker)?
|
|
______________________________________________________________________________________________
|
|
|
|
|
|
33
|
|
+
Despatch date
|
|
______________________________________________________________________________________________
|
Part 3 - Quotation of securities
You need only complete this section if you are applying for quotation
of securities
|
|
|
|
|
|
|
34
|
|
Type of securities
(tick one)
|
|
|
|
|
|
(a)
|
|
x
|
|
Securities described in Part 1
|
|
|
|
|
|
(b)
|
|
¨
|
|
All other securities
Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction
ends, securities issued on expiry or conversion of convertible securities
|
Entities that have ticked box 34(a)
Additional securities forming a new class of securities
|
|
|
Tick to indicate you are providing the information or documents
|
|
|
|
|
|
|
|
35
|
|
¨
|
|
If the
+
securities are
+
equity securities, the names of the 20 largest holders of the additional
+
securities, and the number and percentage of additional
+
securities held by those holders
|
|
|
|
|
|
36
|
|
¨
|
|
If the
+
securities are
+
equity securities, a distribution schedule of the additional
+
securities setting out the number of holders in the categories
1 - 1,000
1,001 - 5,000
5,001 -
10,000
10,001 - 100,000
100,001 and over
|
|
|
|
|
|
37
|
|
¨
|
|
A copy of any trust deed for the additional
+
securities
|
+ See chapter 19 for defined terms.
|
|
|
|
|
1/1/2003
|
|
Appendix 3B Page 5
|
Appendix 3B
New
issue announcement
Entities that have ticked box 34(b)
|
|
|
|
|
|
|
|
|
38
|
|
Number of securities for which
+
quotation is
sought
|
|
____________________________________________________________________________________
|
|
|
|
|
|
39
|
|
Class of
+
securities for which quotation is
sought
|
|
____________________________________________________________________________________
|
|
|
|
|
|
40
|
|
Do the
+
securities rank equally in all respects from the date of allotment with an existing
+
class of quoted
+
securities?
If the additional securities do not rank equally, please state:
the date from which they do
the
extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment
the extent to which they do not rank equally, other than in relation to the next
dividend, distribution or interest payment
|
|
____________________________________________________________________________________
|
|
|
|
|
|
41
|
|
Reason for request for quotation now
Example: In the case of restricted securities, end of restriction period
(if issued upon conversion of another security, clearly identify that other security)
|
|
____________________________________________________________________________________
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
+
Class
|
|
|
|
|
|
|
42
|
|
Number and
+
class of all
+
securities quoted on ASX (
including
the securities in clause 38)
|
|
|
|
|
+ See chapter 19 for defined terms.
|
|
|
|
|
Appendix 3B Page 6
|
|
1/1/2003
|
Appendix 3B
New issue announcement
Quotation agreement
|
1
|
+
Quotation of our
additional
+
securities is in ASXs absolute discretion. ASX may quote the
+
securities on any conditions it decides.
|
|
2
|
We warrant the following to ASX.
|
|
|
|
The issue of the
+
securities to be quoted complies with the law and is not for an illegal purpose.
|
|
|
|
There is no reason why those
+
securities should
not be granted
+
quotation.
|
|
|
|
An offer of the
+
securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.
|
Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give
this warranty
|
|
|
Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any
+
securities to be quoted and that no-one has any right to return any
+
securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the
+
securities be quoted.
|
|
|
|
We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the
+
securities to be quoted, it has been provided at the time that we request that the
+
securities be quoted.
|
|
|
|
If we are a trust, we warrant that no person has the right to return the
+
securities to be quoted under section 1019B of the Corporations Act at the time that we request that the
+
securities be quoted.
|
+ See chapter 19 for defined terms.
|
|
|
|
|
1/1/2003
|
|
Appendix 3B Page 7
|
Appendix 3B
New
issue announcement
|
3
|
We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this
agreement.
|
|
4
|
We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before
+
quotation of the
+
securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.
|
|
|
|
|
|
|
|
Sign here:
|
|
Ross E. Mallett
|
|
Date: 7 July 2004
|
|
|
|
(Assistant Company Secretary)
|
|
|
|
|
|
|
|
Print name:
|
|
Ross E. Mallett
|
|
|
== == == == ==
+ See chapter 19 for defined terms.
|
|
|
|
|
Appendix 3B Page 8
|
|
1/1/2003
|
30 June 2004
Attachment A
Details of Securities Issued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
Issue Price
|
|
Issue Date
|
|
Expiry Date
|
|
Description
|
|
Share Capital
|
|
|
|
36,700
|
|
$
|
3.90
|
|
20.12.1999
|
|
20.12.04
|
|
Employee Options Exercised
|
|
|
143,130
|
|
|
|
41,000
|
|
$
|
3.48
|
|
18.12.2000
|
|
18.12.05
|
|
|
|
|
142,680
|
|
|
|
76,300
|
|
$
|
4.33
|
|
30.11.2001
|
|
30.11.06
|
|
|
|
|
330,379
|
|
|
|
192,500
|
|
$
|
4.34
|
|
23.12.2002
|
|
23.12.07
|
|
|
|
|
835,450
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shares Issued
|
|
346,500
|
|
|
|
|
|
|
|
|
|
|
|
1,451,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Exercise of Employee Options)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares to be Quoted
|
|
346,500
|
|
|
|
|
|
|
|
|
Total Share Capital to be Quoted
|
|
$
|
1,451,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Details of Securities Not Quoted on
the ASX
|
|
|
|
|
|
|
|
|
|
|
|
|
Unquoted Securities
as at 31/03/04
|
|
Description
|
|
Options
exercised
|
|
Options
lapsed
|
|
Options
issued
|
|
Unquoted Securities
As at 30/06/04
|
|
1,258,475
|
|
(a) employee options expiring 20/12/2004 exerciseable at $3.90
|
|
36,700
|
|
0
|
|
|
|
1,221,775
|
|
1,571,200
|
|
(b) employee options expiring 18/12/2005 exerciseable at $3.48
|
|
41,000
|
|
0
|
|
|
|
1,530,200
|
|
3,911,700
|
|
(c) employee options expiring 30/11/2006 exerciseable at $4.33
|
|
76,300
|
|
0
|
|
|
|
3,835,400
|
|
7,119,962
|
|
(d) employee options expiring 23/12/2007 exercised at $4.34
|
|
192,500
|
|
0
|
|
|
|
6,927,462
|
|
|
|
|
|
|
|
|
|
|
|
|
13,861,337
|
|
TOTAL OPTIONS
|
|
346,500
|
|
0
|
|
|
|
13,514,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quoted Securities as at 31.03.04
|
|
1,157,308,681
|
|
plus Securities subject to this application for quotation
|
|
346,500
|
|
|
|
|
|
TOTAL SECURITIES TO BE QUOTED ON ASX
|
|
1,157,655,181
|
|
|
|
|
|
|
|
|
|
|
Value
|
|
Fee
|
|
1,451,639 Issued Capital
|
|
|
|
|
In excess of: 500,000
|
|
$
|
2,350.00
|
|
Excess 951,639 @ 0.12250006%
|
|
$
|
1,165.76
|
|
|
|
|
|
|
Total Fee
|
|
$
|
3,515.76
|
|
|
|
|
|
To: The Manager
Announcements
ASX Company Announcements Office
Public Announcement 2004-21
Release of Quarterly Review
Please find attached for immediate release, Public Announcement 2004-21 covering WMC
Resources Ltds June 2004 Quarterly Review.
A copy of this public
announcement will be published on WMCs web site at
www.wmc.com
later this morning.
WMCs Chief Executive Officer, Mr Andrew Michelmore, will host an audio conference at 11.00am this morning which will be broadcast live from WMCs web site. A recording of this conference will be available
for playback on WMCs web site this afternoon.
Ross Mallett
Assistant Company Secretary
15 July 2004
|
|
|
|
|
|
|
|
|
|
|
WMC Resources Ltd
|
|
|
|
|
|
ACN 004 184 598
|
|
|
|
|
|
|
|
|
|
GPO Box 860K
|
|
|
|
|
|
Melbourne Vic. 3001
|
|
|
|
|
|
Australia
|
|
|
|
|
|
|
|
|
|
Level 16 IBM Centre
|
|
|
|
|
|
60 City Road
|
|
|
|
|
|
Southbank Vic. 3006
|
|
|
|
|
|
Australia
|
|
|
|
|
|
|
|
|
|
Tel +61 (0)3 9685 6000
|
|
|
|
|
|
Fax +61 (0)3 9685 6115
|
HEALTH, SAFETY & ENVIRONMENT
Safety and Environment
The lost time plus medically treated injury frequency rate (IFR) for the year to 30 June
2004 is slightly above rates achieved in 2003. While our total injury rate has not improved, the overall severity of injuries is significantly lower than experienced in previous years. Reflecting this, the lost time injury rate stands at 1.8 at the
end of June compared with the full year 2003 result of 3.2.
During the quarter
we commenced remediation works at the Yeelirrie uranium project site in Western Australia. The rehabilitation plan has been developed with the approval of the State Mining Engineer and Radiological Council of WA and is expected to be completed by
year end.
Health, safety and environment performance data are also available
at www.wmc.com/sustainability.
Note: Unless otherwise stated, comparisons
contained in this production report are quarter on previous quarter. Statements, particularly those regarding the possible or assumed future performance, production levels, prices, reserves, divestments, growth or other trend projections are or may
be forward looking statements. Actual results, actions and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors including known and unknown risks and uncertainties.
WMC RESOURCES SHARE PRICE
OVERVIEW
30 - June
Dear Shareholder,
Improved reliability and consistency at Olympic Dam and completion of major maintenance at our nickel operations position us well for a strong second half.
Record smelter throughput at Olympic Dam contributed to higher copper production for the
quarter and cathode production is expected to increase further in the second half of the year. Mine production was down slightly on the previous quarter. A work program to address this is being implemented.
Nickel production was on plan for the quarter and we are on track to meet our full year
targets.
Acid availability constrained fertilizer production during the
quarter and full year production is now expected to be 900,000 tonnes.
A
revised management structure, with an expanded focus on growth and business development opportunities, was introduced during the quarter. The next stage of the Olympic Dam Development study pre-feasibility work has begun and drilling commenced at
the Yakabindie nickel project.
Our focus remains on safe, consistent and
reliable performance. I am especially pleased with our nickel operations delivering to plan and the significant improvements in reliability at Olympic Dam in a continued period of strong commodity prices.
A G MICHELMORE
Chief Executive Officer
15 July 2004
QUARTERLY REVIEW
QUARTER ENDED 30 JUNE 2004
WMC RESOURCES LTD
(ABN 78 004 184 596)
PRODUCTION OVERVIEW
Copper & Uranium
A continued focus
on reliability at Olympic Dam contributed to record smelter throughput for the quarter and higher cathode production. The higher utilisation rates achieved at the smelter are expected to contribute to higher cathode production in the second half of
the year, with full year production expected to be in the 220-230kt range.
Mine production was down slightly on the previous quarter. A work program for the second half of 2004 has been designed to ramp-up mining rates. This will address the availability of production stopes, development rates, ventilation and
backfill requirements. Surface stocks will continue to be processed to support production.
The newly commissioned copper solvent extraction plant ramped up to full capacity during the quarter and will contribute to improved second half production.
The uranium solvent extraction plant is performing consistently well with uranium recoveries
for the half exceeding design capacity.
Nickel
Nickel production was on plan for the quarter and we are on track to meet our full year
targets.
During the quarter we took the opportunity to advance some components
of smelter maintenance previously planned for 2005. This provides us with the flexibility to maximise output in 2005 without affecting 2004 production.
The key maintenance task was replacement of the reaction shaft roof of the smelter furnace. An innovative prefabrication approach enabled the work to be completed in 13
days compared to the 28 days originally scheduled for 2005. The smelter was re-commissioned in late June, with production returning to normal in early July. Concentrate and ore stocks were built-up during the outage and the smelter is well
positioned for a strong second half of the year.
Concentrate production at
both Mount Keith and Leinster was lower than the prior quarter, in line with expectations. At Mount Keith, the first ore from Stage F was processed, and production was supplemented by the processing of lower grade stockpiled ores.
Continued strong metallurgical recoveries at Leinster partially offset a reduction in ore
grades. Utilisation of smaller equipment has enabled the mining of remnant ore from the Harmony open pit. Mining of this ore is expected to continue during the September quarter, with processing continuing through to year end.
Overburden removal has commenced at the new 11 Mile Well satellite open pit near Leinster.
The mine is expected to yield a total of 6,000 tonnes of nickel-in-concentrate in 2005.
The Perseverance 611 Level development project is continuing to plan with decline access to the 11 Level achieved during the quarter.
Concentrate production at Kambalda was 19 per cent higher, reflecting increased ore deliveries from nickel mines in the area. Output is expected to increase further in
coming quarters.
Production of nickel metal at the Kwinana refinery has
returned to full rates following completion of the three-yearly major maintenance shutdown. Debottlenecking work was also undertaken during the outage to enable the refinery to increase capacity to 70,000 tonnes per annum rates by year end.
Fertilizers
Fertilizer production was constrained by reduced sulphuric acid supplies following welding
repairs on the converter at the Mount Isa acid plant. Consequently, fertilizer production for the full year is now expected to be about 900,000 tonnes.
We are addressing the cause of the premature failure of the welds on the converter with the equipment supplier. Acid production has since returned to full capacity.
MANAGEMENT RESTRUCTURE
The senior management team has been restructured to enhance our capacity to assess growth
and business development opportunities while maintaining our focus on consistent and reliable production performance.
Under the new structure, Alan Dundas takes on the role of EGM Nickel and Seamus French has been appointed EGM Copper Uranium. A new Fertilizers and Industrial Minerals
group has been created to incorporate Queensland Fertilizer Operations, Hi Fert and Corridor Sands. We are well advanced in an external search for an EGM Fertilizers and Industrial Minerals. In the interim, Mike Nossal, EGM Business Strategy and
Development, has taken accountability for this business.
BUSINESS
DEVELOPMENT
Olympic Dam
Work has commenced on the next phase of the Olympic Dam Development Study. The study will
focus on leveraging the already significant investment at Olympic Dam and provide a life of mine plan to guide ongoing development. By 2006 WMC will be in a position to identify a single preferred development plan. That option will become the
subject of a final feasibility study and could potentially increase copper production levels to 350ktpa through underground expansion or to 500ktpa through an open pit.
Nickel
On 18 June we entered into a conditional agreement to sell our Lanfranchi nickel mine and associated tenements at Kambalda for A$26M. This sale concludes our strategy of
selling mature nickel mines at Kambalda and participating in the benefits that a third party can yield from the remaining resource.
Drilling for the pre-feasibility study at Yakabindie has commenced with eight drill holes completed during the quarter. Fresh core samples are currently undergoing
metallurgical evaluation.
Exploration
Near mine exploration advanced at Cliffs and Collurabbie during the quarter. Exploration and
assessment of opportunities continue globally for nickel sulphides (Africa, North America, China) and for copper-gold deposits (Africa, North and South America).
|
|
|
|
|
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
QUARTERLY REVIEW
QUARTER ENDED 30 JUNE 2004
WMC RESOURCES LTD
(ABN 78 004 184 596)
TAXATION
As a result of strong taxable income generation in 2003 and continued strong profitability in 2004, we anticipate that substantially all of our known tax losses will be brought to account in the current year. This
should result in an accounting tax credit of around 5 to 10 per cent during both halves of 2004 subject to profitability levels. We believe that we are unlikely to pay cash tax until 2006.
We are currently evaluating the benefits, if any, which may arise from entering the tax
consolidations regime and will advise this once determined.
2004 CALENDAR
Half year financial results will be released on 11 August 2004. We will
release our September Quarterly Review on 14 October 2004.
|
|
|
|
|
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
QUARTERLY REVIEW
QUARTER ENDED 30 JUNE 2004
WMC RESOURCES LTD
(ABN 78 004 184 596)
PRODUCTION SUMMARY
|
|
|
|
|
|
|
|
|
|
|
Quarter
ended
30 June 2004
|
|
Quarter
ended
31 Mar 2004
|
|
Quarter
ended
30 June 2003
|
|
Olympic Dam Operations
|
|
|
|
|
|
|
|
Copper (tonnes of refined copper)
|
|
54,785
|
|
47,974
|
|
49,644
|
|
Uranium Oxide concentrate (tonnes)
|
|
1,020
|
|
1,205
|
|
764
|
|
Gold (ounces)
|
|
22,266
|
|
12,110
|
|
23,371
|
|
Silver (ounces)
|
|
232,194
|
|
127,190
|
|
173,340
|
|
|
|
|
|
|
Nickel (tonnes contained nickel)
|
|
|
|
|
|
|
|
Kambalda Nickel Operations
|
|
7,058
|
|
5,938
|
|
7,100
|
|
Leinster Nickel Operations
|
|
8,639
|
|
11,308
|
|
10,099
|
|
Mount Keith Operations
|
|
9,577
|
|
11,526
|
|
11,590
|
|
Total nickel-in-concentrate
|
|
25,274
|
|
28,772
|
|
28,789
|
|
Total nickel-in-matte
|
|
18,774
|
|
27,074
|
|
21,923
|
|
Total nickel metal
|
|
16,893
|
|
11,655
|
|
14,498
|
|
|
|
|
|
|
Phosphate Hill
|
|
|
|
|
|
|
|
Di-ammonium phosphate (tonnes)
|
|
107,677
|
|
166,929
|
|
168,075
|
|
Mono-ammonium phosphate (tonnes)
|
|
79,751
|
|
59,790
|
|
70,726
|
|
Total Fertilizer (tonnes)
|
|
187,428
|
|
226,719
|
|
238,801
|
A statistical supplement providing a
detailed breakdown of WMC production results is on our home page at http://www.wmc.com
|
|
|
|
|
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
QUARTERLY REVIEW
QUARTER ENDED 30 JUNE 2004
WMC RESOURCES LTD
(ABN 78 004 184 596)
COMMODITY AND CURRENCY HEDGING
The table below shows both the rates at which the open hedge transactions are contracted with third parties to determine the cash flow impact for each hedge and the fair
valued rates for determining the profit and loss impact.
Hedging as at 30
June 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Forward Sale of US$
|
|
Non-limiting Cover
|
|
|
|
|
Amount
US$m
|
|
Cash Flow
Rate A$/US$
|
|
Amount
US$m
|
|
Cash Flow
Rate A$/US$
|
|
Profit & Loss
Rate A$/US$
|
|
2004
|
|
114
|
|
0.6720
|
|
36
|
|
0.6402
|
|
0.5289
|
|
*
|
The legacy hedges were fair valued at the date of demerger. Consequently, the profit and loss for each hedge will be determined by the difference between a particular hedges
fair valued rate and the spot price at the date of the hedges maturity.
|
Deferred profits
Profits arising on
the close out of the legacy hedge book during 2003 have been deferred and will be recognised during 2004 to 2010 as shown in the tables below.
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
Gold
|
|
|
|
(A$m)
|
|
(A$m)
|
|
|
|
1H
|
|
2H
|
|
1H
|
|
2H
|
|
2004
|
|
|
|
|
|
|
|
2.0
|
|
2005
|
|
54.5
|
|
60.2
|
|
1.2
|
|
1.6
|
|
2006
|
|
37.3
|
|
41.8
|
|
1.1
|
|
1.4
|
|
2007
|
|
40.5
|
|
42.1
|
|
1.2
|
|
1.6
|
|
2008
|
|
45.9
|
|
44.6
|
|
1.1
|
|
1.5
|
|
2009
|
|
|
|
|
|
1.3
|
|
1.7
|
|
2010
|
|
|
|
|
|
1.4
|
|
1.8
|
Deferred cashflows
In 2001 some foreign exchange and gold hedges were reversed as a result of the gold asset
sales. The profit and loss on these transactions was realised in 2001 and the cash outflow was scheduled to occur as shown in the table below.
|
|
|
|
|
|
|
(A$m)
|
|
2004
|
|
17.2
|
|
2005
|
|
37.3
|
|
2006
|
|
28.5
|
|
2007
|
|
23.4
|
|
2008
|
|
21.2
|
During the quarter we took advantage
of our strong cash inflows to arrange the early repayment of these amounts.
A
total payment of A$107M was made to clear A$127M of these outstandings, with the A$20M reduction against the scheduled payment profile reflecting the time value of money at Australian dollar interest rates.
An amount of A$0.7M cash outflow remains deferred at 30 June 2004 and will mature in the
second half of 2004.
|
|
|
|
|
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
|
|
|
|
|
WMC Resources Ltd Quarterly Statistical Supplement - Total Production
|
|
Quarter Ended 30 June 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ending
30/06/2004
|
|
Quarter ending
31/03/2004
|
|
Quarter ending
31/12/2003
|
|
Quarter ending
30/09/2003
|
|
Quarter ending
30/06/2003
|
|
COPPER & URANIUM - OLYMPIC DAM
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COPPER
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
Ore hoisted
|
|
1,932,556
|
|
2,260,224
|
|
2,575,092
|
|
2,281,673
|
|
2,089,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
Ore treated and head grade
|
|
2,100,103
|
|
2.36
|
|
2,364,103
|
|
2.40
|
|
1,959,037
|
|
2.50
|
|
2,151,125
|
|
2.45
|
|
2,334,685
|
|
2.19
|
|
Concentrate smelted
|
|
127,979
|
|
45.5
|
|
110,919
|
|
49.6
|
|
67,723
|
|
50.3
|
|
64,322
|
|
51.3
|
|
125,159
|
|
47.4
|
|
|
|
|
|
|
|
|
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
Copper cathode produced
|
|
54,785
|
|
47,974
|
|
33,420
|
|
35,337
|
|
49,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
tonnes
|
|
kg/tonne
|
|
tonnes
|
|
kg/tonne
|
|
tonnes
|
|
kg/tonne
|
|
tonnes
|
|
kg/tonne
|
|
tonnes
|
|
kg/tonne
|
|
Uranium oxide concentrate produced & head grade
|
|
1,020
|
|
0.65
|
|
1,205
|
|
0.63
|
|
898
|
|
0.62
|
|
906
|
|
0.65
|
|
764
|
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ounces
|
|
g/tonne
|
|
ounces
|
|
g/tonne
|
|
ounces
|
|
g/tonne
|
|
ounces
|
|
g/tonne
|
|
ounces
|
|
g/tonne
|
|
Refined gold produced & head grade
|
|
22,266
|
|
0.46
|
|
12,110
|
|
0.46
|
|
18,904
|
|
0.45
|
|
16,910
|
|
0.46
|
|
23,371
|
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ounces
|
|
g/tonne
|
|
ounces
|
|
g/tonne
|
|
ounces
|
|
g/tonne
|
|
ounces
|
|
g/tonne
|
|
ounces
|
|
g/tonne
|
|
Refined silver produced & head grade
|
|
232,194
|
|
5.15
|
|
127,190
|
|
4.87
|
|
164,757
|
|
5.11
|
|
113,632
|
|
4.90
|
|
173,340
|
|
4.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NICKEL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ore treated and head grade
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
Kambalda Nickel Operations*
|
|
251,592
|
|
3.08
|
|
170,282
|
|
3.83
|
|
204,016
|
|
3.56
|
|
178,990
|
|
3.62
|
|
218,327
|
|
3.57
|
|
Leinster Nickel Operations
|
|
595,408
|
|
1.69
|
|
676,596
|
|
1.95
|
|
621,748
|
|
2.13
|
|
664,652
|
|
1.92
|
|
581,944
|
|
2.02
|
|
Mount Keith Nickel Operations
|
|
2,850,550
|
|
0.52
|
|
2,673,931
|
|
0.61
|
|
2,974,189
|
|
0.66
|
|
2,838,202
|
|
0.66
|
|
2,698,898
|
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concentrate produced & concentrate grade
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
tonnes
|
|
grade %
|
|
Kambalda Nickel Operations
|
|
53,364
|
|
13.2
|
|
42,595
|
|
13.9
|
|
45,930
|
|
14.3
|
|
41,821
|
|
13.9
|
|
50,748
|
|
14.0
|
|
Leinster Nickel Operations
|
|
79,741
|
|
10.8
|
|
95,425
|
|
11.9
|
|
93,661
|
|
12.1
|
|
89,509
|
|
11.9
|
|
84,963
|
|
11.9
|
|
Mount Keith Nickel Operations
|
|
41,922
|
|
22.8
|
|
57,212
|
|
20.1
|
|
70,681
|
|
20.6
|
|
66,366
|
|
20.6
|
|
54,386
|
|
21.3
|
|
|
|
|
|
|
|
|
Nickel contained in concentrate
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
Kambalda Nickel Operations
|
|
7,058
|
|
5,938
|
|
6,576
|
|
5,828
|
|
7,100
|
|
Leinster Nickel Operations
|
|
8,639
|
|
11,308
|
|
11,340
|
|
10,667
|
|
10,099
|
|
Mount Keith Nickel Operations
|
|
9,577
|
|
11,526
|
|
14,586
|
|
13,661
|
|
11,590
|
|
|
|
|
|
|
|
|
Total
|
|
25,274
|
|
28,772
|
|
32,502
|
|
30,156
|
|
28,789
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Smelter feed & matte produced (tonnes)
|
|
Feed
|
|
Matte
|
|
Feed
|
|
Matte
|
|
Feed
|
|
Matte
|
|
Feed
|
|
Matte
|
|
Feed
|
|
Matte
|
|
Kalgoorlie Nickel Smelter
|
|
149,911
|
|
27,046
|
|
192,053
|
|
39,628
|
|
188,631
|
|
39,654
|
|
194,407
|
|
43,688
|
|
167,471
|
|
31,854
|
|
|
|
|
|
|
|
|
Nickel contained in matte
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
Kalgoorlie Nickel Smelter
|
|
18,774
|
|
27,074
|
|
27,346
|
|
27,799
|
|
21,923
|
|
|
|
|
|
|
|
|
Matte treated
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
Kwinana Nickel Refinery
|
|
24,866
|
|
17,989
|
|
26,354
|
|
20,867
|
|
21,706
|
|
|
|
|
|
|
|
|
Nickel packaged
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
Kwinana Nickel Refinery
|
|
16,893
|
|
11,655
|
|
17,780
|
|
13,969
|
|
14,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FERTILIZER - PHOSPHATE HILL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
tonnes
|
|
DAP
|
|
107,677
|
|
166,929
|
|
215,412
|
|
173,441
|
|
168,075
|
|
MAP
|
|
79,751
|
|
59,790
|
|
32,839
|
|
27,484
|
|
70,726
|
|
Total Fertilizer
|
|
187,428
|
|
226,719
|
|
248,251
|
|
200,925
|
|
238,801
|
Date: 29 July 2004
Public Announcement 2004-22
WMC and Jinchuan sign strategic alliance for joint exploration in China
WMC Resources Ltd (WMC) and Chinas largest nickel producer, Jinchuan Group Limited (Jinchuan) this week signed an Exploration
Co-operation Agreement that will see the two companies form a partnership to explore for nickel in China.
Under the agreement, the two companies will form a strategic alliance to explore for nickel sulphides and associated metals in Jinchuans home province of Gansu in central China and in other parts of China.
The partnership will be owned and funded on a 50-50 basis, with WMC and
Jinchuan sharing the cost of any agreed exploration programs. Exploration tenements in the area of interest have already been secured under the agreement.
The board and management team for the joint venture company to be formed out of the partnership will be drawn from WMC and Jinchuan.
The agreement also carries provisions for advanced joint exploration, development and mining
of any nickel sulphide ore bodies discovered within the area of interest, and Jinchuan will have a first right of purchase, linked to international commercial terms, for nickel produced.
The agreement was signed in Melbourne this week by WMC Resources Chief Executive Officer, Mr Andrew Michelmore and Jinchuan
Groups President and Chairman, Mr Li Yong-jun.
This agreement is
based on a set of shared principles. It has been forged out of a valued, long-term relationship between WMC and Jinchuan. It is underpinned by mutual understanding and a co-operative, positive approach, Mr Michelmore and Mr Li said in a joint
statement.
The agreement is the next step in a 16-year relationship between
the Australian and Chinese companies, both of whom are their countrys biggest nickel producers.
The signing of this agreement was witnessed by Mr Zhang Chong, Director of the Department of Land and Resources of Gansu Province, as a representative of the Gansu Provincial Government.
Mr Zhang Chong commented: The Government of Gansu Province strongly supports the
cooperation between WMC and Jinchuan in this exploration venture, and more broadly we welcome the deepening of the relationship between these two companies.
Mr Michelmore said: This strategic alliance combines WMCs nickel sulphide exploration expertise with Jinchuans local
knowledge and vast experience in the nickel business. We are very pleased to have strengthened an already strong relationship with a respected nickel producer like Jinchuan, and we look forward to pursuing exploration programs in China alongside our
new partner.
|
|
|
WMC Resources Ltd
|
|
ABN 76 004 184 598
|
|
|
|
GPO Box 860K
|
|
Melbourne Vic. 3001
|
|
Australia
|
|
|
|
Level 16 IBM Centre
|
|
60 City Road
|
|
Southbank Vic. 3006
|
|
Australia
|
|
|
|
Tel +61 (0)3 9685 6000
|
|
Fax +61 (0)3 9686 3569
|
Page 1 of 2
The close association between WMC and Jinchuan began in 1988 when WMC assisted Jinchuan in the construction of its nickel
smelter in Gansu Province.
Jinchuan welcomes the formalising of this
alliance. WMC has a strong exploration skills base and a reputation for applying cutting edge technology for data interpretation, Mr Li said.
In August last year, WMC agreed to a five-year nickel supply contract with Jinchuan, beginning in 2005. That contract calls for WMC to supply to Jinchuan 90,000 tonnes of
nickel (in matte form), and it comes on top of an earlier agreement to provide 30,000 tonnes of nickel. When valued at current prices, that 120,000 tonnes of nickel is worth US$1.8 billion.
The Jinchuan Group is located in Jinchang, known as Chinas nickel capital. Jinchuan is
Chinas largest integrated producer of nickel for the domestic market. Jinchuans nickel output accounts for more than 88 per cent of Chinese production.
WMC Resources is one of Australias largest minerals development companies, and ranks as the worlds third largest nickel
producer. WMCs current nickel production comes from Western Australia.
Note:
A photo of Jinchuans Mr Li Yong-jun and WMCs Mr Andrew Michelmore signing the agreement in Melbourne on 26 July 2004 is available by contacting Heather Lakin on telephone (03) 9685 6101 or via email
heather.lakin@wmc.com
For further information contact:
Media contact:
Troy Hey
Group Manager Public Affairs
Telephone: (03) 9685 6233
Mobile: 0419 502 852
Analyst contact:
Nerida Mossop
Manager Investor Relations
Telephone: (03) 9685
6274
Mobile: 0418 378 809
Page 2 of 2
Announcements
ASX Company Announcements Office
Public Announcement 2004-23
WMC Resources Ltd 2004 Half-Year Results
Please find attached for immediate release Public Announcement 2004-23 covering the release of WMC Resources Ltds Financial Results for the half-year ended 30 June
2004.
The following documents are included as part of the release:
|
|
Fact File for the Half-Year ending 30 June, 2004
|
|
|
Appendix 4D Half-Yearly ASX Report
|
WMCs Chief Executive Officer, Mr Andrew Michelmore, will host an audio conference and webcast presentation at 1.00pm this afternoon which will be broadcast live
from WMCs web site at
www.wmc.com
. A recording of this conference will be available for playback on WMCs web site later this evening.
Ross Mallett
Assistant Company
Secretary
11 August 2004
|
|
|
|
|
For further information, please call:
|
|
WMC Resources Ltd
|
|
|
|
ACN 004 184 598
|
|
Media Contact:
|
|
|
|
Troy Hey, Group Manager Public Affairs
|
|
GPO Box 860K
|
|
(03) 9685-6233 or 0419 502 852
|
|
Melbourne Vic. 3001
|
|
|
|
Australia
|
|
Analyst/Shareholder Contact:
|
|
|
|
Nerida Mossop, Manager Investor Relations
|
|
Level 16 IBM Centre
|
|
(03) 9685-6274 or 0418 378 809
|
|
60 City Road
|
|
|
|
Southbank Vic. 3006
|
|
|
|
Australia
|
|
|
|
|
|
|
Tel +61 (0)3 9685 6000
|
|
|
|
Fax +61 (0)3 9685 6115
|
WMC RESOURCES LTD
FACT FILE
FOR THE SIX MONTHS ENDED
30 JUNE 2004
FOR ADDITIONAL INFORMATIONS PLEASE CONTACT:
Media contact:
Troy Hey
Group Manager Public Affairs
Phone + 61 03 9685 6233 or +61 0419 502 852
troy.hey@wmc.com
Analyst and shareholder contact:
Nerida Mossop
Manager Investor Relations
Phone + 61 03 9685
6274 or + 61 0418 378 809
nerida.mossop@wmc.com
DISCLAIMER
Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates,
prices, reserves, divestments, potential growth of WMC, industry growth or other trend projections and any estimated company earnings are or may be forward looking statements. Such statements relate to future events and expectations and as such
involve known and unknown risks and uncertainties. Actual results, actions and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors, including: variations in the
market price of the minerals and metals produced by WMC, the impact of foreign currency exchange rates on these market prices, WMCs ability to profitably produce and transport minerals and metals extracted to applicable markets, WMCs
ability to achieve projected cost and scheduling targets for repair and construction activities and the activities of governmental authorities in certain countries where WMC has projects, facilities or mines that are being explored or developed, as
well as the factors discussed under the caption Risk Factors at pages 13 to 16 of WMCs Annual Report on Form 20-F for the fiscal year ended December 31, 2003.
The presentation of WMCs statement of financial performance, statement of financial position, and statement of cashflows and the
business segment financial statements is designed to provide information in relation to each of the business segments and is therefore not set out in accordance with Australian Generally Accepted Accounting Principles (GAAP). Financial statements
prepared in accordance with Australian GAAP can be found in the Half Yearly ASX Report.
All amounts are in Australian dollars unless otherwise stated.
|
|
|
|
|
1
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
|
|
|
|
|
2
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
THIS PAGE INTENTIONALLY LEFT BLANK.
|
|
|
|
|
3
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
PUBLIC ANNOUNCEMENT
EARNINGS, RETURNS AND CASH
FLOW UP IN STRONG FIRST HALF
PERFORMANCE
|
|
Profit after tax of $515m for the half year ended 30 June 2004 increased $316m on the preceding half.
|
|
|
Return on equity increased from 10 per cent to 23 per cent.
|
|
|
EBIT from operations has doubled to $438m, reflecting increased production and sales from the copper and fertilizer operations and improved realised Australian dollar prices.
|
|
|
Cashflow before financing and demerger costs increased to $398m from $140m in the preceding half.
|
|
|
The companys financial position strengthened during the period, with gearing reduced to 20 per cent and interest cover up to 35 times.
|
|
|
Capital expenditure for the half was $199m, down 44 per cent on the preceding half.
|
|
|
The company does not expect to pay tax in the current year. The half year result includes a net tax credit of $46m which includes the benefit of tax losses brought to account in the
period
.
|
|
|
Directors declared an interim dividend of 17 cents per share.
|
Key Financials
|
|
|
|
|
|
|
(A$ Million)
|
|
Actual
2H03
|
|
Actual
1H04
|
|
Revenue from operations (pre hedging)
1
|
|
1,538
|
|
1,831
|
|
Profit after tax
|
|
199
|
|
515
|
|
EBIT from operations (pre hedging)
1
|
|
219
|
|
438
|
|
|
|
|
|
|
|
Cashflow from operations
|
|
469
|
|
602
|
|
Capital expenditure
|
|
357
|
|
199
|
|
Cashflow before financing and demerger costs
1
|
|
140
|
|
398
|
|
Net debt
1
|
|
1,253
|
|
1,091
|
|
|
|
|
|
|
|
Total assets
|
|
7,560
|
|
7,601
|
|
Equity
|
|
3,950
|
|
4,428
|
|
|
|
|
|
|
|
Return on equity (%)
|
|
10.1
|
|
23.2
|
|
Cash flow from operations to net debt (%)
|
|
74.8
|
|
110.4
|
|
Net debt / net debt + equity (%)
|
|
24.1
|
|
19.8
|
|
Interest cover (times)
|
|
14.6
|
|
34.6
|
|
Earnings per share - basic (cents)
|
|
17.5
|
|
44.6
|
|
Dividend per share - unfranked (cents)
|
|
6.0
|
|
17.0
|
|
1
|
Not prepared in accordance with Australian GAAP. Refer to disclaimer stated on page 1.
|
CEO COMMENTS
Improving operational reliability and Australian dollar commodity prices increased earnings, returns and cashflows in the six
months to June 2004, said WMC Resources Ltd CEO, Andrew Michelmore.
Our nickel operations produced first half performance to plan,with improved revenues and earnings growth.
A turnaround in reliability and profitability at Olympic Dam should continue throughout the year, with fertilizers also positioned for a stronger second
half.
The gains from strong first half earnings have
allowed us to reduce debt and gearing, building our capability for growth.
Balancing the dual demands of operational reliability and disciplined assessment of development opportunities will be the focus for us into 2005.
|
|
|
|
|
|
|
|
|
4
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
THIS PAGE INTENTIONALLY LEFT BLANK
|
|
|
|
|
|
|
|
|
5
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
BUSINESS PERFORMANCE
HEALTH, SAFETY &
ENVIRONMENT
Safety performance
The lost time plus medically treated injury
frequency rate (IFR) for the period is slightly above rates achieved in 2003. While our total injury rate has not improved, the overall severity of injuries is significantly lower than experienced in previous years. Reflecting this, the lost time
injury rate stands at 1.8 for the first half compared with the full year 2003 result of 3.2.
Remediation works at the Yeelirrie uranium project site in Western Australia commenced during the half. The rehabilitation plan has been developed with the approval of the State Mining Engineer and Radiological
Council of WA, and is expected to be completed by year end.
Health, safety and
environment performance data is also available at
www.wmc.com/sustainability
.
WMC SHARE PRICE (A$)
|
|
|
|
|
|
|
|
|
6
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
BUSINESS PERFORMANCE
MARKETING
Commodity markets were buoyant throughout the half with firm prices for all our commodities. Exchange stocks of both nickel and copper remain tight, and demand for our
output has been strong. Fertilizer pricing has improved, boosting our realised prices. Uranium spot prices have increased significantly in view of expectations of more balanced supply/demand. As uranium is sold under long term contracts, these
increased spot prices will be reflected as new contracts are put in place.
DIVIDENDS
In consideration of the strong earnings and
cashflows, driven by the cyclical highs in commodity prices, Directors have declared an interim dividend of 17 cents per share to be paid on 22 September with the record date for entitlements being 6 September. WMC will continue the Dividend
Reinvestment Plan, but the Directors have determined that a zero per cent discount will apply to the interim dividend and to future dividends until further notice.
TREASURY
The Group is in a strong financial position. As operators of large world-class assets, we seek to finance our assets and growth opportunities with a mix of equity and
debt financing that best balances risk and reward to shareholders.
The Group
has total assets of $7.6 billion, equity of $4.4 billion and net debt of just under $1.1 billion at 30 June 2004. The Groups gearing (measured as debt to debt-plus-equity) was below 20 per cent.
During June 2004, we took advantage of strong operating cashflow to arrange early repayment
of residual foreign exchange and gold hedge obligations relating to the gold operations previously conducted by the Group. First half 2004 cashflows reflect the settlement of $107 million together with the current period payments, totalling $116
million.
Finance and Other costs (as reported in the Statement of Financial
Position) of $10 million largely relates to the amortisation of net gain arising on translation of foreign currency debt.
Funding arrangements
Our 2003 Global Bond (US$500 million 10 year and US$200 million 30 year tenor) remains in place as our core long term debt funding. Given our low gearing and strong cashflows, we have cancelled part of our existing
syndicated debt facility and will refinance the balance this month, prior to the maturity in November of one tranche, with a dual currency revolver bank facility of US$250 million with a two year maturity.
Legacy currency hedge book
The legacy currency hedge book for 2005 to 2008 was closed out in the 2003 year. The
resulting profit of $367 million was deferred and will be recognised over the years of 2005 to 2008 in line with the underlying production. The recognition profile of the deferred profits is set out on page 8. The amounts recognised in 2005 to 2008
will be largely non-assessable for income tax purposes. The portion of the hedge book relating to the 2004 financial year was not closed out. The hedged position in respect of the 2004 contracts is also set out on page 8.
INSURANCE
Olympic Dam heat exchanger insurance claim
Results for the first half of 2004 include the recognition of a net $22 million receivable in respect of an insured event at the Groups copper operations. The
event, the failure of the heat exchanger in the acid plant, occurred in late 2003 with the insurance claim recently agreed. The majority of the proceeds are expected to be received in the third quarter of 2004. The net impact of the $22 million
reflects as $42 million in revenue in copper operations (the insured party) and a $20 million charge against revenue in other operations (incorporating Westminer Insurance the Groups captive insurance company).
SX insurance claim
WMC has an outstanding claim in relation to the 2001 Olympic Dam fire. An amount of $120 million was recognised in relation to the claim in
the 2002 financial statements. To date, we have received $82 million of cash in relation to the claim and carry a receivable of $38 million on the balance sheet. We are currently engaged in a mediation process with our insurers. The final amount of
the claim will be in excess of the $120 million already brought to account. Recognition of further amounts will be subject to the outcome of these discussions and accounting convention.
|
|
|
|
|
|
|
|
|
7
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
BUSINESS PERFORMANCE
TAXATION
Recognition of off-balance
sheet tax losses
Strong taxable income in 2003 and the outlook for 2004
increased the certainty of recovery of off-balance sheet tax losses to the point that accounting convention requires the company to recognise substantially all of the known tax losses. Recognition over the full financial year will result in an
effective tax credit on current year profit before tax of around 10 per cent. There remains a proportion of tax losses yet to be recognised. These may be brought to account during the current financial year, subject to levels of taxable income and
accounting convention.
Tax consolidation regime
We are yet to make a final determination whether or not to enter the tax consolidation
regime. Accordingly, the benefits (if any), which may arise from entering the new tax regime, have not yet been fully evaluated.
Depending on the election made, it is possible but not yet quantifiable, that the projected full year tax credit may be further increased in the 2004 year.
COMMODITY AND CURRENCY HEDGING
The table below shows both the rates at which the open hedge transactions are contracted
with third parties to determine the cashflow impact for each hedge and the fair valued rates for determining the profit and loss impact.
The legacy hedges were fair valued at the date of demerger. Consequently, the profit and loss for each hedge will be determined by the difference between a particular
hedges fair valued rate and the spot price at the date of the hedges maturity.
Hedging as at 30 June 2004
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
Forward Sale of US$
|
|
Non-limiting Cover
|
|
Profit & Loss
Rate A$/US$
|
|
|
Amount
US$m
|
|
Cashflow
Rate A$/US$
|
|
Amount
US$m
|
|
Cashflow
Rate A$/US$
|
|
|
2004
|
|
114
|
|
0.6720
|
|
36
|
|
0.6402
|
|
0.5289
|
Deferred profits
Profits arising on the close out of the legacy hedge book during 2003 have been deferred and
will be recognised during 2004 to 2010 as shown in the table below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency
|
|
Gold
|
|
|
|
(A$m)
|
|
(A$m)
|
|
|
|
1H
|
|
2H
|
|
Total
|
|
1H
|
|
2H
|
|
Total
|
|
2004
|
|
|
|
|
|
|
|
|
|
2.0
|
|
2.0
|
|
2005
|
|
54.5
|
|
60.2
|
|
114.7
|
|
1.2
|
|
1.6
|
|
2.8
|
|
2006
|
|
37.3
|
|
41.8
|
|
79.1
|
|
1.1
|
|
1.4
|
|
2.5
|
|
2007
|
|
40.5
|
|
42.1
|
|
82.6
|
|
1.2
|
|
1.6
|
|
2.8
|
|
2008
|
|
45.9
|
|
44.6
|
|
90.5
|
|
1.1
|
|
1.5
|
|
2.6
|
|
2009
|
|
|
|
|
|
|
|
1.3
|
|
1.7
|
|
3.0
|
|
2010
|
|
|
|
|
|
|
|
1.4
|
|
1.8
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
178.2
|
|
188.7
|
|
366.9
|
|
7.3
|
|
11.6
|
|
18.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
BUSINESS PERFORMANCE
PRODUCTION SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
Contained nickel (000 tonnes)
|
|
|
|
|
|
|
|
|
|
- Concentrate
|
|
118
|
|
55
|
|
63
|
|
54
|
|
- Matte
|
|
99
|
|
44
|
|
55
|
|
46
|
|
- Metal
|
|
62
|
|
30
|
|
32
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
Copper (000 tonnes)
|
|
160
|
|
91
|
|
69
|
|
103
|
|
Uranium (tonnes)
|
|
3,203
|
|
1,399
|
|
1,804
|
|
2,225
|
|
Gold (000 ounces)
|
|
86
|
|
50
|
|
36
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
Fertilizer (000 tonnes)
|
|
|
|
|
|
|
|
|
|
- Di-ammonium phosphate
|
|
760
|
|
371
|
|
389
|
|
275
|
|
- Mono-ammonium phosphate
|
|
162
|
|
102
|
|
60
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
Total Fertilizer
|
|
922
|
|
473
|
|
449
|
|
414
|
|
|
|
|
|
|
|
|
|
|
For production commentary, refer
to the nickel, copper and fertilizer sections of this document.
|
|
|
|
|
|
|
|
|
9
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
BUSINESS PERFORMANCE
STATEMENT OF FINANCIAL PERFORMANCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A$ Million)
|
|
Actual
FY03
|
|
|
Actual
1H03
|
|
|
Actual
2H03
|
|
|
Actual
1H04
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel
1
|
|
1,818
|
|
|
776
|
|
|
1,042
|
|
|
1,049
|
|
|
Copper-uranium
|
|
696
|
|
|
363
|
|
|
333
|
|
|
476
|
|
|
Fertilizer (QFO and Hi-Fert)
|
|
423
|
|
|
260
|
|
|
163
|
|
|
291
|
|
|
Elimination of intercompany sales
|
|
(8
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales revenue (pre hedging)
|
|
2,929
|
|
|
1,395
|
|
|
1,534
|
|
|
1,809
|
|
|
Revenue received/receivable from insurance claim
|
|
4
|
|
|
|
|
|
4
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE from operations (pre hedging)
|
|
2,933
|
|
|
1,395
|
|
|
1,538
|
|
|
1,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (includes commodity trading expenses)
|
|
(1,880
|
)
|
|
(965
|
)
|
|
(915
|
)
|
|
(966
|
)
|
|
Non cash
|
|
(583
|
)
|
|
(267
|
)
|
|
(316
|
)
|
|
(261
|
)
|
|
Third party purchases
|
|
(328
|
)
|
|
(154
|
)
|
|
(174
|
)
|
|
(227
|
)
|
|
Change in stock
|
|
80
|
|
|
29
|
|
|
51
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COST OF SALES
|
|
(2,711
|
)
|
|
(1,357
|
)
|
|
(1,354
|
)
|
|
(1,418
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBIT (pre hedging)
|
|
222
|
|
|
38
|
|
|
184
|
|
|
413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel
1
|
|
430
|
|
|
104
|
|
|
326
|
|
|
380
|
|
|
Copper-uranium
|
|
(120
|
)
|
|
(42
|
)
|
|
(78
|
)
|
|
77
|
|
|
Fertilizer
|
|
(31
|
)
|
|
4
|
|
|
(35
|
)
|
|
(3
|
)
|
|
Other EBIT from operations
1
|
|
11
|
|
|
5
|
|
|
6
|
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT from operations (pre hedging)
|
|
290
|
|
|
71
|
|
|
219
|
|
|
438
|
|
|
|
|
|
|
|
|
Net currency and commodity hedging gains
|
|
72
|
|
|
22
|
|
|
50
|
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT from operations (post hedging)
|
|
362
|
|
|
93
|
|
|
269
|
|
|
510
|
|
|
Corporate
|
|
(21
|
)
|
|
(9
|
)
|
|
(12
|
)
|
|
(10
|
)
|
|
Corporate one-off items
|
|
(8
|
)
|
|
|
|
|
(8
|
)
|
|
(1
|
)
|
|
Finance and other costs
|
|
(3
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
10
|
|
|
Exploration and new business
|
|
(36
|
)
|
|
(23
|
)
|
|
(13
|
)
|
|
(24
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total EBIT
|
|
294
|
|
|
60
|
|
|
234
|
|
|
485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net borrowing costs
|
|
(46
|
)
|
|
(21
|
)
|
|
(25
|
)
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT before income tax credit/(expense)
|
|
248
|
|
|
39
|
|
|
209
|
|
|
469
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax credit/(expense)
|
|
(2
|
)
|
|
8
|
|
|
(10
|
)
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROFIT after tax
|
|
246
|
|
|
47
|
|
|
199
|
|
|
515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The revenue, costs, EBIT and EBIT
from operations (post hedging) sections from the table above are not prepared under Australian GAAP. These items have been included as they are considered a useful measure of operational performance commonly used by investors to evaluate company
results. Financial statements prepared in accordance with Australian GAAP can be found in the Half Yearly ASX Report.
|
1
|
Revenue and costs relating to power sales made by Nickel to third parties in Western Australia are now reported as part of
Nickels revenue and costs. Comparatives have been restated accordingly.
|
|
|
|
|
|
|
|
|
|
10
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
BUSINESS PERFORMANCE
STATEMENT OF FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
|
|
|
(A$ Million)
|
|
Actual
Jun-03
|
|
|
Actual
Dec-03
|
|
|
Actual
Jun-04
|
|
|
Property, plant & equipment (including acquired mineral rights)
|
|
|
|
|
|
|
|
|
|
|
Nickel
|
|
1,280
|
|
|
1,242
|
|
|
1,300
|
|
|
Copper-uranium
|
|
3,806
|
|
|
3,931
|
|
|
3,865
|
|
|
Fertilizer
|
|
561
|
|
|
566
|
|
|
547
|
|
|
Other
|
|
97
|
|
|
136
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,744
|
|
|
5,875
|
|
|
5,845
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital
|
|
|
|
|
|
|
|
|
|
|
Nickel
1
|
|
214
|
|
|
301
|
|
|
240
|
|
|
Copper-uranium
|
|
214
|
|
|
215
|
|
|
315
|
|
|
Fertilizer
|
|
165
|
|
|
81
|
|
|
86
|
|
|
Other
1
|
|
(38
|
)
|
|
(64
|
)
|
|
(61
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
555
|
|
|
533
|
|
|
580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
Net deferred gains and balances relating to hedging and debt revaluations
|
|
(819
|
)
|
|
(916
|
)
|
|
(636
|
)
|
|
Tax balances
|
|
(327
|
)
|
|
(337
|
)
|
|
(291
|
)
|
|
Exploration and evaluation expenditure capitalised
|
|
84
|
|
|
69
|
|
|
76
|
|
|
|
|
|
|
|
Provisions
|
|
(186
|
)
|
|
(190
|
)
|
|
(202
|
)
|
|
|
|
|
|
|
Other
|
|
167
|
|
|
169
|
|
|
147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS FUNDED BY DEBT AND EQUITY
|
|
5,218
|
|
|
5,203
|
|
|
5,519
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt
|
|
1,557
|
|
|
1,253
|
|
|
1,091
|
|
|
|
|
|
|
|
Shareholders equity
|
|
3,661
|
|
|
3,950
|
|
|
4,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT AND EQUITY
|
|
5,218
|
|
|
5,203
|
|
|
5,519
|
|
|
|
|
|
|
|
|
|
|
|
|
The table above is not prepared
under Australian GAAP. It has been included as it is considered a useful measure of operational performance, commonly used by investors to evaluate the company. Financial Statements prepared in accordance with Australian GAAP can be found in the
Half Yearly ASX Report.
|
1
|
Working capital relating to power sales made by Nickel to third parties in Western Australia are now reported as part of
Nickels working capital. Comparatives have been restated accordingly.
|
|
|
|
|
|
|
|
|
|
11
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
BUSINESS PERFORMANCE
STATEMENT OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A$ Million)
|
|
Actual
FY03
|
|
|
Actual
1H03
|
|
|
Actual
2H03
|
|
|
Actual
1H04
|
|
|
EBITDA (pre hedging)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel
1
|
|
673
|
|
|
208
|
|
|
465
|
|
|
466
|
|
|
Copper-uranium
|
|
98
|
|
|
73
|
|
|
25
|
|
|
188
|
|
|
Fertilizer
|
|
12
|
|
|
25
|
|
|
(13
|
)
|
|
22
|
|
|
Corporate/New Business/Exploration/Other
1
|
|
(52
|
)
|
|
(24
|
)
|
|
(28
|
)
|
|
(41
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
731
|
|
|
282
|
|
|
449
|
|
|
635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements in working capital
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel
2
|
|
(62
|
)
|
|
24
|
|
|
(86
|
)
|
|
61
|
|
|
Copper-uranium
|
|
34
|
|
|
36
|
|
|
(2
|
)
|
|
(99
|
)
|
|
Fertilizer
|
|
16
|
|
|
(68
|
)
|
|
84
|
|
|
(5
|
)
|
|
Corporate/New Business/Exploration/Other
2
|
|
(15
|
)
|
|
(40
|
)
|
|
25
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(27
|
)
|
|
(48
|
)
|
|
21
|
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other balance sheet movements
|
|
18
|
|
|
(1
|
)
|
|
19
|
|
|
16
|
|
|
|
|
|
|
|
|
Hedging receipts/(payments)
3
|
|
8
|
|
|
(18
|
)
|
|
26
|
|
|
20
|
|
|
|
|
|
|
|
|
Net borrowing costs paid
|
|
(51
|
)
|
|
(6
|
)
|
|
(45
|
)
|
|
(23
|
)
|
|
|
|
|
|
|
|
Income tax paid
|
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operations
|
|
676
|
|
|
207
|
|
|
469
|
|
|
602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel
|
|
(219
|
)
|
|
(119
|
)
|
|
(100
|
)
|
|
(143
|
)
|
|
Copper-uranium
|
|
(397
|
)
|
|
(171
|
)
|
|
(226
|
)
|
|
(49
|
)
|
|
Fertilizer
|
|
(41
|
)
|
|
(14
|
)
|
|
(27
|
)
|
|
(5
|
)
|
|
Corporate/New Business/Exploration/Other
|
|
(5
|
)
|
|
(1
|
)
|
|
(4
|
)
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(662
|
)
|
|
(305
|
)
|
|
(357
|
)
|
|
(199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other investing cashflows
|
|
27
|
|
|
(1
|
)
|
|
28
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow before financing and demerger costs
|
|
41
|
|
|
(99
|
)
|
|
140
|
|
|
398
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bond issue costs paid
|
|
(10
|
)
|
|
(9
|
)
|
|
(1
|
)
|
|
|
|
|
Payment on close out of gold asset related hedge contracts
|
|
(33
|
)
|
|
(20
|
)
|
|
(13
|
)
|
|
(116
|
)
|
|
Payment on close out of interest rate hedge
|
|
(39
|
)
|
|
(39
|
)
|
|
|
|
|
|
|
|
Demerger costs paid
|
|
(45
|
)
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow before debt and equity funding
|
|
(86
|
)
|
|
(212
|
)
|
|
126
|
|
|
282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Revenue and costs relating to power sales made by Nickel to third parties in Western Australia are now reported as
part of Nickels revenue and costs. Comparatives have been restated accordingly.
|
|
2
|
Movements in working capital relating to power sales made by Nickel to third parties in Western Australia are now
reported as part of Nickels movement in working capital. Comparatives have been restated accordingly.
|
|
3
|
Exclude payments on settlement of Gold asset related hedging contracts. Comparatives have been restated accordingly.
|
|
|
|
|
|
|
|
|
|
12
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
BUSINESS PERFORMANCE
COMMODITY PRICES & EXCHANGE RATES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Period Ended
|
|
Nickel
US$/lb
|
|
A$/lb
|
|
Copper
US$/lb
|
|
A$/lb
|
|
DAP
US$/t
|
|
A$/t
|
|
US$/A$1.00
|
|
2000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Half
|
|
4.28
|
|
7.01
|
|
0.80
|
|
1.31
|
|
146
|
|
239
|
|
0.6103
|
|
Second Half
|
|
3.57
|
|
6.47
|
|
0.84
|
|
1.52
|
|
161
|
|
291
|
|
0.5538
|
|
Full Year
|
|
3.92
|
|
6.73
|
|
0.82
|
|
1.41
|
|
154
|
|
265
|
|
0.5821
|
|
As at 31 December 2000
|
|
3.26
|
|
5.88
|
|
0.82
|
|
1.48
|
|
155
|
|
279
|
|
0.5548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Half
|
|
3.00
|
|
5.74
|
|
0.78
|
|
1.49
|
|
153
|
|
293
|
|
0.5228
|
|
Second Half
|
|
2.41
|
|
4.70
|
|
0.66
|
|
1.29
|
|
141
|
|
275
|
|
0.5127
|
|
Full Year
|
|
2.70
|
|
5.22
|
|
0.72
|
|
1.39
|
|
147
|
|
284
|
|
0.5175
|
|
As at 31 December 2001
|
|
2.58
|
|
4.64
|
|
0.66
|
|
1.19
|
|
151
|
|
272
|
|
0.5100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2002
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Half
|
|
2.97
|
|
5.56
|
|
0.72
|
|
1.35
|
|
154
|
|
288
|
|
0.5345
|
|
Second Half
|
|
3.15
|
|
5.70
|
|
0.70
|
|
1.27
|
|
160
|
|
290
|
|
0.5525
|
|
Full Year
|
|
3.07
|
|
5.65
|
|
0.71
|
|
1.31
|
|
157
|
|
289
|
|
0.5438
|
|
As at 31 December 2002
|
|
3.22
|
|
5.70
|
|
0.70
|
|
1.24
|
|
149
|
|
264
|
|
0.5646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Half
|
|
3.78
|
|
6.13
|
|
0.75
|
|
1.22
|
|
175
|
|
284
|
|
0.6166
|
|
Second Half
|
|
4.93
|
|
7.17
|
|
0.86
|
|
1.25
|
|
182
|
|
265
|
|
0.6872
|
|
Full Year
|
|
4.37
|
|
6.70
|
|
0.81
|
|
1.24
|
|
179
|
|
274
|
|
0.6523
|
|
As at 31 December 2003
|
|
7.49
|
|
10.01
|
|
1.05
|
|
1.40
|
|
205
|
|
273
|
|
0.7507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Half
|
|
6.19
|
|
8.36
|
|
1.25
|
|
1.69
|
|
213
|
|
288
|
|
0.7400
|
|
As at 30 June 2004
|
|
6.80
|
|
9.82
|
|
1.21
|
|
1.75
|
|
219
|
|
313
|
|
0.6926
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US dollar prices and exchange rates
sourced from Bloomberg
|
|
|
|
|
|
|
|
|
13
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
NICKEL
OVERVIEW OF NICKEL OPERATIONS
Market review
The average US dollar nickel price increased 26 per cent compared to the preceding half.
This was a result of speculative activity and favourable market fundamentals including higher world stainless steel production, strong Chinese nickel / stainless steel demand and limitations on near-to-medium term upside production capacity. In
Australian dollar terms, the nickel price increased by 17 per cent.
Production
Nickel production was on plan for the half. We
remain on track to meet full year production targets. As expected, nickel-in-concentrate production was lower with mining at Mount Keith transitioning from higher grade ore at the bottom of Stage E cutback to lower grade ore from the new Stage F
cutback and from stockpiles. Production from the Kalgoorlie smelter was also lower, in line with the reduced concentrate supply. With the smelter running at rates less than capacity, the opportunity was taken to advance some components of smelter
maintenance previously scheduled for 2005. The three-yearly major maintenance shutdown at the Kwinana refinery was completed during the half.
Financials
Earnings before interest, tax and hedging from the nickel operations were $380m, up $54m from the preceding half. Key variances included:
|
|
Revenue from operations increased by $36m with lower sales volumes offset by higher realised prices.
|
|
|
Operational cash costs were $14m lower reflecting lower mining costs at Mount Keith (stockpile processing and transition to the new Stage F cutback).
|
|
|
The cost of purchased feed at Kambalda was $10m higher due to the higher nickel price and higher volumes.
|
|
|
Non-cash costs reduced by $64m, reflecting lower amortisation with completion of primary ore mining at Harmony open pit at Leinster and the transition to Stage F cutback and
stockpile processing at Mount Keith. The Mount Keith reduction is a timing variance and is expected to return to normal levels in the coming half.
|
The combined impact of lower nickel production and higher cost of purchased feed resulted in a five per cent increase in the unit cost of sales for the period.
Capital expenditure of $143m included progressive development of the
Perseverance lower mine at Leinster, and capitalised major maintenance relating to the refinery shutdown completed during the half.
Development
During the half, WMC entered into a conditional agreement to sell the Lanfranchi mine and associated tenements at Kambalda for $26m. This sale concludes a strategy of selling mature nickel mines at Kambalda and
participating in the benefits that a third party can yield from the remaining resource. It is anticipated that the sale (net of related costs) will be recognised in the second half of 2004.
Significant progress was made on the development of the Perseverance lower mine at Leinster,
with decline access to the 11 Level achieved during the half. WMC is on schedule to commission the new crusher and materials handling system on the 11 Level during the first half of 2005. The majority of the project work will be completed by the end
of 2005.
Overburden removal commenced at the new 11 Mile Well open pit near
Leinster. The mine is expected to yield a total of 6,000 tonnes of nickel-in-concentrate in 2005.
The option to purchase the lease containing the Cliffs nickel deposit, located near Mt Keith, was exercised during the period. Exploration drilling continues on site and will be followed by a feasibility study.
|
|
|
|
|
|
|
|
|
14
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
NICKEL
PRODUCTION
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
Kambalda Nickel Operations
|
|
|
|
|
|
|
|
|
|
Ore treated (000 tonnes)
|
|
805
|
|
422
|
|
383
|
|
422
|
|
Head grade (%)
|
|
3.6
|
|
3.6
|
|
3.6
|
|
3.4
|
|
Total concentrate produced (000 tonnes)
|
|
181
|
|
93
|
|
88
|
|
96
|
|
Concentrate grade (%)
|
|
14.3
|
|
14.4
|
|
14.1
|
|
13.5
|
|
Nickel in concentrate (000 tonnes)
|
|
26
|
|
14
|
|
12
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
Leinster Nickel Operations
|
|
|
|
|
|
|
|
|
|
Ore treated (000 tonnes)
|
|
2,489
|
|
1,203
|
|
1,286
|
|
1,272
|
|
Head grade (%)
|
|
2.0
|
|
2.0
|
|
2.0
|
|
1.8
|
|
Concentrate produced (000 tonnes)
|
|
347
|
|
164
|
|
183
|
|
175
|
|
Concentrate grade (%)
|
|
12.1
|
|
12.1
|
|
12.0
|
|
11.4
|
|
Nickel in concentrate (000 tonnes)
|
|
42
|
|
20
|
|
22
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
Mt Keith Nickel Operations
|
|
|
|
|
|
|
|
|
|
Ore treated (000 tonnes)
|
|
11,200
|
|
5,388
|
|
5,812
|
|
5,524
|
|
Head grade (%)
|
|
0.6
|
|
0.6
|
|
0.7
|
|
0.6
|
|
Concentrate produced (000 tonnes)
|
|
247
|
|
110
|
|
137
|
|
99
|
|
Concentrate grade (%)
|
|
20.2
|
|
19.7
|
|
20.6
|
|
21.3
|
|
Nickel in concentrate (000 tonnes)
|
|
50
|
|
22
|
|
28
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
Total Nickel in concentrate (000 tonnes)
|
|
118
|
|
55
|
|
63
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
Kalgoorlie Nickel Smelter (000 tonnes)
|
|
|
|
|
|
|
|
|
|
Concentrate treated
|
|
711
|
|
328
|
|
383
|
|
342
|
|
Nickel in concentrate treated from WMC sources
|
|
77
|
|
33
|
|
44
|
|
35
|
|
Nickel in concentrate treated from third party sources
|
|
27
|
|
15
|
|
12
|
|
13
|
|
Matte produced
|
|
148
|
|
65
|
|
83
|
|
67
|
|
Nickel in matte produced
|
|
99
|
|
44
|
|
55
|
|
46
|
|
|
|
|
|
|
|
|
|
|
|
Kwinana Nickel Refinery (000 tonnes)
|
|
|
|
|
|
|
|
|
|
Matte treated
|
|
92
|
|
45
|
|
47
|
|
43
|
|
Refined nickel produced
|
|
62
|
|
30
|
|
32
|
|
29
|
|
|
|
|
|
|
|
SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
|
|
|
|
|
Nickel (000 tonnes)
|
|
|
|
|
|
|
|
|
|
Nickel in concentrate
|
|
15
|
|
7
|
|
8
|
|
7
|
|
Nickel in matte
|
|
36
|
|
14
|
|
22
|
|
18
|
|
Metal
|
|
61
|
|
30
|
|
31
|
|
28
|
|
Total Nickel
|
|
112
|
|
51
|
|
61
|
|
53
|
|
Cobalt (tonnes)
|
|
886
|
|
495
|
|
391
|
|
307
|
|
|
|
|
|
|
|
|
|
15
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
NICKEL
FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A$ Million)
|
|
Actual
FY03
|
|
|
Actual
1H03
|
|
|
Actual
2H03
|
|
|
Actual
1H04
|
|
|
Profit & loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nickel
|
|
1,531
|
|
|
633
|
|
|
898
|
|
|
920
|
|
|
Intermediate products
|
|
93
|
|
|
48
|
|
|
45
|
|
|
59
|
|
|
Power sales
1
|
|
34
|
|
|
17
|
|
|
17
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from operations
|
|
1,658
|
|
|
698
|
|
|
960
|
|
|
996
|
|
|
Commodity trading revenue
|
|
160
|
|
|
78
|
|
|
82
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales revenue
|
|
1,818
|
|
|
776
|
|
|
1,042
|
|
|
1,049
|
|
|
Revenue received/receivable from insurance claim
|
|
4
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
1,822
|
|
|
776
|
|
|
1,046
|
|
|
1,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating costs
1
|
|
(749
|
)
|
|
(370
|
)
|
|
(379
|
)
|
|
(365
|
)
|
|
Purchased feed
|
|
(258
|
)
|
|
(111
|
)
|
|
(147
|
)
|
|
(157
|
)
|
|
Non cash costs
|
|
(278
|
)
|
|
(120
|
)
|
|
(158
|
)
|
|
(94
|
)
|
|
Change in stock
|
|
51
|
|
|
7
|
|
|
44
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales of WMC product
|
|
(1,234
|
)
|
|
(594
|
)
|
|
(640
|
)
|
|
(619
|
)
|
|
Commodity trading expenses
|
|
(158
|
)
|
|
(78
|
)
|
|
(80
|
)
|
|
(50
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
(1,392
|
)
|
|
(672
|
)
|
|
(720
|
)
|
|
(669
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (pre hedging)
|
|
430
|
|
|
104
|
|
|
326
|
|
|
380
|
|
|
Currency hedging
|
|
44
|
|
|
13
|
|
|
31
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (post hedging)
|
|
474
|
|
|
117
|
|
|
357
|
|
|
416
|
|
|
Depreciation and amortisation
|
|
243
|
|
|
104
|
|
|
139
|
|
|
86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (post hedging)
|
|
717
|
|
|
221
|
|
|
496
|
|
|
502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flows
|
|
607
|
|
|
232
|
|
|
375
|
|
|
514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustain
|
|
66
|
|
|
29
|
|
|
37
|
|
|
40
|
|
|
Enhance
|
|
18
|
|
|
11
|
|
|
7
|
|
|
5
|
|
|
Mine capital development
|
|
127
|
|
|
71
|
|
|
56
|
|
|
76
|
|
|
Capitalised major maintenance
|
|
8
|
|
|
8
|
|
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
219
|
|
|
119
|
|
|
100
|
|
|
143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
483
|
|
|
352
|
|
|
483
|
|
|
448
|
|
|
Non-current assets
|
|
1,352
|
|
|
1,359
|
|
|
1,352
|
|
|
1,402
|
|
|
Liabilities
|
|
(345
|
)
|
|
(352
|
)
|
|
(345
|
)
|
|
(267
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
1,490
|
|
|
1,359
|
|
|
1,490
|
|
|
1,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The profit and loss line items in the table above
are not prepared under Australian GAAP. These items have been included
as they are considered a useful measure of operational performance commonly used by investors
to evaluate company results. Financial statements prepared in
accordance with Australian GAAP can be
found in the Half Yearly ASX Report.
|
1
|
Revenue and costs relating to power sales made by Nickel to third parties in Western Australia are now reported as
part of Nickels revenue and costs. Comparatives have been restated accordingly.
|
|
2
|
The Balance Sheet includes assets and liabilities relating to the power sales made by Nickel to third parties in
Western Australia. Comparatives have been restated accordingly.
|
|
|
|
|
|
|
|
|
|
16
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
NICKEL
RATIOS AND UNIT COSTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
Return on net assets (annualised %)
|
|
28.3
|
|
14.0
|
|
42.5
|
|
49.3
|
|
Unit cash cost of nickel metal production (A$/lb) *
|
|
2.24
|
|
2.44
|
|
2.06
|
|
2.16
|
|
Unit total cost of nickel metal sales (A$/lb) *
|
|
4.79
|
|
4.89
|
|
4.68
|
|
4.92
|
|
Average nickel sales price including hedging (A$/lb)
|
|
6.70
|
|
6.21
|
|
7.18
|
|
8.77
|
|
*
|
Excluding costs relating to the power sales made by Nickel to third parties in Western Australia
|
|
|
|
|
|
|
|
|
|
17
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
COPPER-URANIUM
OVERVIEW OF COPPER-URANIUM
OPERATION
Market Review
The average US dollar copper price strengthened 45 per cent during the first half, with
strong consumption growth in Asia and China in particular. The realised Australian dollar copper price increased 35 per cent compared to the preceding half.
Production
Improved reliability and consistency at Olympic Dam resulted in significantly higher copper production, with 103 kt of copper cathode produced, up 49 per cent on the preceding half. Record smelter throughput was
achieved, resulting in a build-up of anode inventory at the end of the first half, which will drive increased copper cathode production in the second half of the year to achieve the full year target of 220-230 kt of copper cathode.
The copper solvent extraction plant was commissioned and has ramped up to full capacity.
The uranium solvent extraction plant is performing consistently well. A
diagnostic analysis of uranium losses conducted last year identified opportunities to improve uranium recovery. Several of these have already been implemented, resulting in 23 per cent higher uranium production in the first half. Further
improvements are planned over the next three years.
Financials
Divisional earnings before interest, tax and hedging were $77 million, up
from $155 million in the preceding half. This improvement was driven primarily by higher sales revenue as a result of increased sales volumes of copper, gold and silver, and higher realised copper prices. Higher uranium production was also achieved
in the first half, but uranium sales are skewed towards the second half of the year. Insurance revenue proceeds of $42m as a result of the heat exchanger failure at the end of 2003 also contributed to the first half result.
Cash operating costs were in line with the previous half.
Non cash costs increased by $32m due to write offs of carried forward costs following changes
in stope design ($20 million) and higher amortisation cost of the new SX plant ($10 million).
Finished goods purchases increased by $25m as a result of copper purchases made during the half to meet new levels of sales commitments.
Unit cost of sales was reduced by six per cent due to higher production volumes.
Capital expenditure of $49m was significantly reduced on the previous half and included
increased mine development expenditure to sustain the planned increase in mine production.
Development
Our focus continues on
reliability improvements to support sustained, consistent performance at Olympic Dam. Key areas for the second half are mine production and milling performance. A program is in place to increase mine production from 8.2 mtpa rates in the first half
to target rates of 10.5 mtpa. This program covers the critical areas of development, production drilling, blasting, hoisting and backfill. Supplementary rigs have been secured and resourced to lift both development and drilling rates. Blasting
improvements have been made with the technical assistance of Orica. Hoisting reliability improvements have been identified and a program to increase production from the backfill plant is in place. A reliability review has been undertaken in the
processing area and uptime improvement opportunities have been identified to progressively lift mill throughput to our 10.5 mtpa target.
Significant improvement in uranium recovery was achieved in the first half of the year. The focus in the second half will be to sustain the improvements achieved and
identify opportunities for further improvement. A similar diagnostic analysis of current losses will be undertaken to determine opportunities for both copper and gold recovery improvement.
The key copper-uranium business objective over the next three years is to lift profitability
and returns from the existing assets. To complement the reliability and recovery programs already in progress, opportunities for cost reduction will be developed for implementation in this timeframe.
|
|
|
|
|
|
|
|
|
18
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
COPPER-URANIUM
PRODUCTION
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
Ore hoisted (000 tonnes)
|
|
9,004
|
|
4,147
|
|
4,857
|
|
4,193
|
|
Ore treated (000 tonnes)
|
|
8,386
|
|
4,276
|
|
4,110
|
|
4,464
|
|
Copper ore grade (%)
|
|
2.4
|
|
2.4
|
|
2.5
|
|
2.4
|
|
Copper produced (000 tonnes)
|
|
160
|
|
91
|
|
69
|
|
103
|
|
|
|
|
|
|
|
Uranium ore grade (kg/tonne)
|
|
0.6
|
|
0.6
|
|
0.6
|
|
0.6
|
|
Uranium produced (tonnes)
|
|
3,203
|
|
1,399
|
|
1,804
|
|
2,225
|
|
|
|
|
|
|
|
Gold ore grade (g/tonne)
|
|
0.5
|
|
0.5
|
|
0.4
|
|
0.5
|
|
Gold produced (000 ounces)
|
|
86
|
|
50
|
|
36
|
|
34
|
|
|
|
|
|
|
|
Silver ore grade (g/tonne)
|
|
4.6
|
|
4.3
|
|
5.0
|
|
5.0
|
|
Silver produced (000 ounces)
|
|
601
|
|
323
|
|
278
|
|
359
|
|
|
|
|
|
|
|
SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
Copper (000 tonnes)
|
|
175
|
|
91
|
|
84
|
|
107
|
|
Uranium oxide (tonnes)
|
|
4,575
|
|
2,168
|
|
2,407
|
|
1,490
|
|
|
|
|
|
19
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
COPPER-URANIUM
FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A$ Million)
|
|
Actual
FY03
|
|
|
Actual
1H03
|
|
|
Actual
2H03
|
|
|
Actual
1H04
|
|
|
Profit & loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from operations
|
|
696
|
|
|
363
|
|
|
333
|
|
|
476
|
|
|
Revenue received/receivable from insurance claim
|
|
|
|
|
|
|
|
|
|
|
42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
696
|
|
|
363
|
|
|
333
|
|
|
518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating costs
|
|
(553
|
)
|
|
(265
|
)
|
|
(288
|
)
|
|
(293
|
)
|
|
Finished goods purchased
|
|
(70
|
)
|
|
(43
|
)
|
|
(27
|
)
|
|
(52
|
)
|
|
Non cash costs
|
|
(234
|
)
|
|
(119
|
)
|
|
(115
|
)
|
|
(147
|
)
|
|
Change in stock
|
|
41
|
|
|
22
|
|
|
19
|
|
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
(816
|
)
|
|
(405
|
)
|
|
(411
|
)
|
|
(441
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (pre hedging)
|
|
(120
|
)
|
|
(42
|
)
|
|
(78
|
)
|
|
77
|
|
|
Currency/commodity Hedging
|
|
23
|
|
|
7
|
|
|
16
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (post hedging)
|
|
(97
|
)
|
|
(35
|
)
|
|
(62
|
)
|
|
110
|
|
|
Depreciation and amortisation
|
|
218
|
|
|
115
|
|
|
103
|
|
|
111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (post hedging)
|
|
121
|
|
|
80
|
|
|
41
|
|
|
221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flows
|
|
142
|
|
|
99
|
|
|
43
|
|
|
89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustain - Olympic Dam Operations
|
|
67
|
|
|
17
|
|
|
50
|
|
|
14
|
|
|
Sustain - SX plant rebuild
|
|
233
|
|
|
126
|
|
|
107
|
|
|
23
|
|
|
Enhance
|
|
8
|
|
|
4
|
|
|
4
|
|
|
|
|
|
Mine capital development
|
|
15
|
|
|
7
|
|
|
8
|
|
|
12
|
|
|
Capitalised major maintenance
|
|
74
|
|
|
17
|
|
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
397
|
|
|
171
|
|
|
226
|
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
362
|
|
|
380
|
|
|
362
|
|
|
459
|
|
|
Non-current Assets
|
|
3,951
|
|
|
3,828
|
|
|
3,951
|
|
|
3,887
|
|
|
Liabilities
|
|
(444
|
)
|
|
(467
|
)
|
|
(444
|
)
|
|
(452
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
3,869
|
|
|
3,741
|
|
|
3,869
|
|
|
3,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The profit and loss line items in
the table above are not prepared under Australian GAAP. These items have been included as they are considered a useful measure of operational performance commonly used by investors to evaluate company results. Financial statements prepared in
accordance with Australian GAAP can be found in the Half Year ASX Report.
|
|
|
|
|
20
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
COPPER-URANIUM
RATIOS AND UNIT COSTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
Return on net assets (annualised %)
|
|
N/A
|
|
N/A
|
|
N/A
|
|
3.7
|
|
Unit cash cost of production (A$/lb)
|
|
0.68
|
|
0.68
|
|
0.64
|
|
0.66
|
|
Unit total cost of sales (A$/lb)
|
|
1.50
|
|
1.38
|
|
1.63
|
|
1.53
|
|
Average copper sales price including hedging (A$/lb)
|
|
1.27
|
|
1.25
|
|
1.29
|
|
1.82
|
|
|
|
|
|
21
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
FERTILIZER
OVERVIEW OF FERTILIZER OPERATIONS
Market review
Di-ammonium phosphate (DAP) prices increased to an average of US$213 per tonne, up 17 per
cent on the previous half. DAP prices have been undergoing cyclical recovery since mid 2001, and were supported in the current half by strong demand in international markets and increases in raw material costs that forced producers to raise prices
or reduce output. As a result of the strengthening Australian dollar, average Australian dollar DAP prices increased by a more modest 9 per cent compared to the prior half.
Production
The fertilizer operations continue to perform well, although production was constrained during the half due to interruptions to acid supplies. The interruptions were a
result of heavy rains which cut rail access in January, and maintenance at the Mount Isa acid plant in June. Production of mono-ammonium phosphate (MAP) fertilizer has continued to increase in line with our strategy of increasing the proportion of
MAP production to de-bottleneck the operation and increase overall production.
Production is expected to increase in the second half of the year, with full year production expected to be approximately 900,000 tonnes.
Financials
The fertilizer division made an EBIT (pre-hedging) loss for the half of $3 million, an improvement of $32 million on the prior half. Revenue from sale of WMC produced fertilizer increased $81 million from the prior
half as a result of higher sales volumes and higher average realised Australian dollar prices. This was partially offset by increased cash costs at the Queensland Fertilizer Operations as a result of purchases of third party product to meet customer
commitments. The EBIT contribution from the Hi Fert retail operation increased $9 million on the prior half, reflecting the seasonal nature of the sales profile.
Development
Programs to improve the economic returns from the business are underway, with a primary focus on low cost de-bottlenecking. The first stage of this process involves
increasing the proportion of MAP production. Plant trials to produce a sulphur-fortified MAP product are underway with a commercial-scale production trial due to take place in the second half of the year.
During the recent strategic review of WMCs fertilizer business, we identified a range
of business improvement opportunities, particularly in relation to better integration of the production (QFO) and distribution (HiFert) parts of the business. The recently advised management changes include the appointment of Martin Foreman as
Executive General Manager with line responsibility for both production and distribution. This will facilitate the implementation of improvement opportunities over the next 12 to 18 months.
|
|
|
|
|
22
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
FERTILIZER
PRODUCTION
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
Di-Ammonium Phosphate (DAP) (000 tonnes)
|
|
760
|
|
371
|
|
389
|
|
275
|
|
Mono-Ammonium Phosphate (MAP) (000 tonnes)
|
|
162
|
|
102
|
|
60
|
|
139
|
|
|
|
|
|
|
|
|
|
|
|
Total Fertilizer (000 tonnes)
|
|
922
|
|
473
|
|
449
|
|
414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
QFO (000 tonnes) - third parties
|
|
689
|
|
327
|
|
362
|
|
288
|
|
QFO (000 tonnes) - via Hi-Fert
|
|
205
|
|
186
|
|
19
|
|
241
|
|
Hi-Fert - purchased product (000 tonnes) - third parties
|
|
350
|
|
213
|
|
137
|
|
216
|
|
|
|
|
|
23
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
FERTILIZER
FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A$ Million)
|
|
Actual
FY03
|
|
|
Actual
1H03
|
|
|
Actual
2H03
|
|
|
Actual
1H04
|
|
|
Profit & loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fertilizer sales revenue
|
|
261
|
|
|
157
|
|
|
104
|
|
|
185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
261
|
|
|
157
|
|
|
104
|
|
|
185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating costs
|
|
(262
|
)
|
|
(133
|
)
|
|
(129
|
)
|
|
(133
|
)
|
|
Finished goods purchased
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
|
Non cash costs
|
|
(40
|
)
|
|
(18
|
)
|
|
(22
|
)
|
|
(26
|
)
|
|
Change in stock
|
|
5
|
|
|
(11
|
)
|
|
16
|
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total cost of sales
|
|
(297
|
)
|
|
(162
|
)
|
|
(135
|
)
|
|
(193
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QFO EBIT (pre hedging)
|
|
(36
|
)
|
|
(5
|
)
|
|
(31
|
)
|
|
(8
|
)
|
|
Profit/(loss) from Hi-Fert
|
|
5
|
|
|
9
|
|
|
(4
|
)
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fertilizer EBIT (pre hedging)
|
|
(31
|
)
|
|
4
|
|
|
(35
|
)
|
|
(3
|
)
|
|
Currency hedging
|
|
5
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBIT (post hedging)
|
|
(26
|
)
|
|
6
|
|
|
(32
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QFO depreciation and amortisation
|
|
39
|
|
|
19
|
|
|
20
|
|
|
23
|
|
|
Hi-Fert depreciation and amortisation
|
|
4
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fertilizer EBITDA (post hedging)
|
|
17
|
|
|
27
|
|
|
(10
|
)
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flows (QFO only)
|
|
(5
|
)
|
|
11
|
|
|
(16
|
)
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QFO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustain
|
|
12
|
|
|
4
|
|
|
8
|
|
|
2
|
|
|
Enhance
|
|
2
|
|
|
|
|
|
2
|
|
|
1
|
|
|
Mine capital development
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
Capitalised major maintenance
|
|
24
|
|
|
9
|
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
38
|
|
|
13
|
|
|
25
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
.
|
|
|
|
|
|
|
|
|
Hi-Fert
|
|
3
|
|
|
1
|
|
|
2
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fertilizer capital expenditure
|
|
41
|
|
|
14
|
|
|
27
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet (QFO)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
57
|
|
|
50
|
|
|
57
|
|
|
47
|
|
|
Non-current assets
|
|
588
|
|
|
553
|
|
|
588
|
|
|
577
|
|
|
Liabilities
|
|
(58
|
)
|
|
(60
|
)
|
|
(58
|
)
|
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
587
|
|
|
543
|
|
|
587
|
|
|
589
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet (Hi-Fert)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
82
|
|
|
180
|
|
|
82
|
|
|
81
|
|
|
Non-current assets
|
|
27
|
|
|
27
|
|
|
27
|
|
|
25
|
|
|
Liabilities
|
|
(28
|
)
|
|
(33
|
)
|
|
(28
|
)
|
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
81
|
|
|
174
|
|
|
81
|
|
|
85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The profit and loss
line items in the table above are not prepared under Australian GAAP. These items have been included
as they are considered a useful measure of operational performance commonly used by investors
to evaluate company results. Financial
statements prepared in accordance with Australian GAAP can be
found in the Half Year ASX Report.
WMC RESOURCES LTD ABN 76 004 184 598
24
FERTILIZER
RATIOS AND UNIT COSTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual
FY03
|
|
Actual
1H03
|
|
Actual
2H03
|
|
Actual
1H04
|
|
(QFO only)
|
|
|
|
|
|
|
|
|
|
Unit cash cost of fertilizer production (A$/t)
|
|
233
|
|
228
|
|
236
|
|
238
|
|
Unit cost of fertilizer sales (A$/t)
|
|
332
|
|
315
|
|
355
|
|
365
|
|
Average realised DAP sales price (A$/t)
*
|
|
295
|
|
310
|
|
276
|
|
347
|
|
*
|
Including freight differential
|
|
|
|
|
|
|
|
|
|
25
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
GROWTH
Our primary focus as a company continues
to be on safe, consistent and reliable performance. With the strong cashflows generated in the first half of the year, we are also building an sound financial position to be able to capitalize on growth opportunities as they are developed. We are
developing a range of internal growth opportunities as well as evaluating external opportunities as they arise.
EXPLORATION
The exploration group divided its time and resources during the half between activities targeted towards enhancing the Western Australian nickel business and the international search for world class orebodies.
In Western Australia, near-mine exploration, including geophysics and
drilling, advanced at several nickel projects. At the Cliffs project, diamond drilling on geophysical anomalies is in progress. At the Collurabbie project, exploration includes ground-based surveys in new prospect areas as well as drilling in areas
of known and expected mineralisation.
A highlight of our international
exploration activities was the identification of areas of interest in China, particularly in Gansu province which is the home of Jinchuan Group Limited. Jinchuan is Chinas largest nickel producer with whom we agreed long term nickel matte
sales contracts in 2003. The target generation work with Jinchuan resulted in the execution of an Exploration Cooperation Agreement between WMC and Jinchuan announced on 29 July. Under the agreement, we will jointly explore areas of interest on a
50/50 basis.
Exploration, including assessment of third party opportunities,
continues globally for nickel sulphides (Africa, North America, China) and for copper-gold deposits (Africa, North and South America).
PROJECTS
Olympic Dam Expansion Study
We have
commenced work on the next phase of the Olympic Dam Development Study, announced in May. During the next two years we will invest approximately $50 million on the study.
The study will focus on leveraging the already significant investment at Olympic Dam and provide a life-of-mine plan to guide ongoing
development. In H1 2006, we will be in a position to identify a single preferred development plan. That option will become the subject of a final feasibility study and could potentially increase copper production levels up to 350,000 tpa through
underground expansion or to 500,000 tpa through an open pit.
Yakabindie
(nickel)
Drilling for the pre-feasibility study at Yakabindie has
commenced. Fresh core samples are currently undergoing metallurgical evaluation.
Corridor Sands
Work continued on obtaining environmental
approvals for the proposed dedicated haul road and jetty, on planning and discussions regarding resettlement of the local community to commence in mid 2005 and preparations for tender of the Bankable Feasibility Study validation.
|
|
|
|
|
|
|
|
|
26
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
THIS PAGE INTENTIONALLY LEFT BLANK
WMC RESOURCES LTD ABN 76 004 184 598
27
DEFINITIONS
Average sales price (including
hedging)
Australian dollar sales prices unit received inclusive of
hedging. In effect, total product revenue plus or minus commodity and pro rated currency hedging gains or losses divided by product sales volumes.
Capitalised major maintenance
Costs related to planned cyclical maintenance capitalised and amortised over the period to the next major shut-down (where this period is greater than twelve months).
Earnings before interest, tax, depreciation and amortisation (EBITDA)
Represents earnings for the period before interest tax, depreciation and
amortisation charges.
Earnings per share (EPS)
Basic EPS: Profit after tax divided by the weighted average number of ordinary shares on
issue during the period.
Enhance capital
Capital expenditure where there is a high degree of confidence that a discrete return on
expenditure will be achieved through increased production or a reduction in operating costs.
Injury Frequency Rate (IFR)
Number of
lost time and medically treated injuries per million hours exposure.
GAAP
Generally Accepted Accounting Principles in Australia.
Interest Cover
Earnings before interest, taxes, depreciation and amortisation and hedging divided by net interest expense incurred before subtracting
capitalised interest.
LME
London Metal Exchange.
Lost Time Injury (LTI)
An injury that results in at least one full shift being lost at some time (not necessarily immediately) after the shift during which the injury occurred, providing it is
not a rostered day off.
Mine capital development
Costs of establishing access to ore where the access is expected to be used for production
over greater than twelve months.
Medically Treated Injury (MTI)
Injuries that do not result in lost work days, but require medical
treatment (including restricted work).
Operating Cashflow to Debt
The percentage of annualised net cashflow from operations relative to net
debt.
Return on Net Assets
Business Units earnings before interest, tax and hedging divided by average net assets
(excluding tax assets / liabilities and intra-group assets).
Return on
equity
Operating profit after tax / total shareholders equity.
Sustain capital
Capital expenditure to maintain the operations at there current level of performance with no
material impact on production or reduction in the cost base.
Unit Cash Cost
of production
Cash costs directly attributable to production (excludes
sales and distribution, royalties, idle capacity and R&D costs amongst others) less the value of by-products produced divided by production volumes.
|
|
|
|
|
|
|
|
|
28
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
DEFINITIONS
Unit Total Cost of Sales
Unit Cost of Sales is Total Cost of Sales less co-product revenue divided by product sold. Total Cost of Sales includes all production
and non production costs, and stock movements.
Working Capital
Working capital only includes net current trade and other debtors,
inventories, and trade and other creditors.
|
|
|
|
|
|
|
|
|
29
|
|
WMC RESOURCES LTD ABN 76 004 184 598
|
Table of Contents
WMC Resources Ltd - ABN 76 004 184 598
Six months ended 30 June 2004 (Current period)
(Previous corresponding period: Six months ended 30 June 2003)
Results for announcement to the market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months to
30 June 2003
|
|
|
|
Six months to
30 June 2004
|
|
|
|
|
|
$M
|
|
|
|
$M
|
|
Revenues from ordinary activities
|
|
up 35% from
|
|
1,429.4
|
|
to
|
|
1,924.1
|
|
Net profit for the period attributable to members
|
|
up from
|
|
47.0
|
|
to
|
|
514.8
|
Dividends
In consideration of the strong earnings and cash flows, driven by the cyclical highs in
commodity prices, Directors have declared an interim dividend of 17 cents per share to be paid on 22 September with the record date for entitlements being 6 September.
WMC will continue the Dividend Reinvestment Plan but the Directors have determined that a zero per cent discount will apply to the interim
dividend and to future dividends until further notice.
|
|
|
|
|
|
|
|
|
2003
|
|
2004
|
|
Interim dividend per share (cents)
|
|
Nil
|
|
17.0
|
|
Final dividend per share (cents)
|
|
6.0
|
|
N/A
|
|
Franked amount per share (cents)
|
|
Nil
|
|
Nil
|
Explanation of revenue and profit
from ordinary activities after tax
Improving operational reliability and
buoyant Australian dollar commodity prices contributed to increased operating earnings, returns and cash flows for the six months ended 30 June 2004. A detailed discussion of the results can be found in the attached directors report.
This interim financial report is to be read in conjunction with the most recent annual
financial report.
1
Directors Report
The directors of WMC
Resources Ltd present their report on the consolidated entity consisting of WMC Resources Ltd and the entities it controlled during or at the end of the six months ended 30 June 2004.
The following persons were directors of the company during the half-year and up to the date of this report:
Tommie C-E Bergman
Andrew G Michelmore
Adrienne E Clarke
AC
Alan K Dundas
Peter J Knight
Graeme W McGregor
AO
David E Meiklejohn
G John Pizzey
Ian E Webber
AO
Review of operations and comments by directors
Revenue
Revenue from ordinary activities for six months to 30 June 2004 was $1,924.1 million, an increase of 35 per cent on the six months to June 2003 of $1,429.4 million. Buoyant commodity prices and strong sales volumes
across all commodities contributed to the revenue growth.
Commodity markets
were buoyant throughout the half with prices firm for all our products. Exchange stocks of both nickel and copper remain tight and demand for our output has been strong. Fertilizer pricing has improved, boosting our realised prices. Uranium spot
prices have increased significantly in view of expectations of more balanced supply/demand in the future. As uranium is sold under long term contracts, these increased spot prices will be reflected as new contracts are put in place.
Revenue for the first half of 2004 includes the recognition of a net $21.5 million receivable
in respect of an insured event at the Groups copper operations. The event, the failure of the heat exchanger in the acid plant, occurred in late 2003 but the claim was only recently agreed. The majority of the proceeds are expected to be
received in the third quarter of 2004. The net impact of the $21.5 million reflects as $41.5 million in revenue in the Copper operations (the insured party) and a $20.0 million charge in Westminer Insurance Ltd the Groups captive
insurance company.
Profit
The consolidated profit after tax increased from $47.0 million for the first half of 2003 to
$514.8 million for the six months to 30 June 2004. The net profit after tax translates to basic and diluted earnings per share of 44.6 cents and a return on equity of 23 per cent.
The result for the current half includes a tax credit of $135.1 million in respect of the recognition of a substantial proportion of tax
losses and timing differences not previously brought to account.
Copper
The Copper operations contributed $77.4 million (pre-hedging) for the
year on sales revenues of $476.2 million. The improved operating earnings during the June 2004 half reflects significantly higher Australian dollar copper price and improved copper and uranium production compared with the June half 2003. The
earnings for the six months to 30 June 2004 include $41.5 million insurance proceeds receivable in respect of the 2003 heat exchanger incident.
Improved reliability and operational consistency at Olympic Dam resulted in higher copper production during the June 2004 half. Compared with the June 2003 half, copper
production was up 13 per cent at 102,800 tonnes. Uranium production increased 59 per cent during the June 2004 half to 2,225 tonnes compared with 1,399 tonnes for the same period in 2003.
The average Australian dollar copper price increased 39 per cent from $1.22 for the first half 2003 to $1.69 during the six months to June
2004.
2
Nickel
Earnings from nickel operations were $380.1 million (pre-hedging) for the half year to 30
June 2004 compared with $104.6 million for the June half 2003. Nickel revenue rose 35 per cent from the June half 2003 to $1,048.7 million for the June half 2004 reflecting the strong nickel price and marginally higher sales volumes. The average
Australia dollar nickel price increased 36 per cent from $6.13 for the first half 2003 to $8.36 during the six months to June 2004.
Production was on plan for the June 2004 half. As expected, nickel in concentrate production was lower with mining at Mount Keith transitioning from higher grade ore at
the bottom of stage E cutback to lower grade ore from the new Stage F cutback and from stockpiles. Production at the Kalgoorlie smelter was also lower in line with reduced concentrate supply. The three-year major maintenance shutdown at the Kwinana
refinery was undertaken during the June half 2004 which impacted metal production.
Fertilizers
The fertilizer operations (including HiFert) made
a loss of $3.2 million (pre-hedging) during the June half 2004, compared with a profit of $4.5 million for the June half 2003.
Stronger US dollar di-ammonium phosphate prices were largely negated by a strengthening Australian dollar. The Queensland fertilizer operations incurred a loss $8.2
million compared with the June half 2003 loss of $4.7 million. Production during the June half 2004 was interrupted by heavy rains in January and maintenance at the Mount Isa acid plant in June 2004.
The contribution, from WMCs distribution arm, HiFert, of $5.0 million compared with
$9.2 million for the June half 2003, was impacted by higher freight costs.
Treasury
Hedging gains contributed $72.4 million to the group
result, reflecting the strength of the Australian dollar relative to the fair value of the hedges in place at the time of demerger.
Net borrowing costs of $16.4 million, reflect lower effective interest rates and reduced net debt levels.
Other non-operating revenues include a credit of $10.3 million largely relating to the amortisation of net gains arising on translation of
foreign currency debt.
Tax
The tax credit for the June half 2004 was $45.9 million. Tax expense on earnings was more
than offset by a tax credit of $135.1 million arising from the recognition of a substantial proportion of the Australian tax losses and other timing differences not previously brought to account.
Other factors which will impact future results:
Treasury
The legacy currency hedge book for 2005 to 2008 was closed out in 2003. The resulting profit of $366.9 million was deferred and will be
recognised over the years 2005 to 2008 in line with the underlying production. The recognition profile of the deferred profits is set out in note 9 (page 19). The amounts recognized in 2005 to 2008 will be largely non-assessable for income tax
purposes. The portion of the hedge book relating to the 2004 financial year was not closed out.
SX insurance claim
WMC has an
outstanding claim in relation to the 2001 Olympic Dam fire. An amount of $120.0 million was recognised in relation to the claim in the 2002 financial statements. To date, we have received $81.5 million of cash in relation to the claim and carry a
receivable of $38.5 million on the balance sheet. We are currently engaged in a mediation process with our insurers.
The final amount of the claim will be in excess of the $120.0 million already brought to account. Recognition of further amounts will be subject to the outcome of these
discussions and accounting convention.
Tax
Strong taxable income in 2003 and the outlook for 2004 increased the certainty of recovery
of off-balance sheet tax losses to the point that accounting convention requires the company to recognise substantially all of the known tax losses. Recognition over the full financial year will result in an effective tax credit on current year
profit before tax of around 10 per cent. There remains a proportion of tax losses yet to be recognised, these may be brought to account during the current financial year, subject to levels of taxable income and accounting convention.
The company has not yet made a final determination whether or not to enter the tax
consolidation regime. Accordingly the benefits (if any), which may arise from entering the new tax regime, have not yet been fully evaluated. Depending on the election made, it is possible, but not yet quantifiable, that the projected full year tax
credit may be further increased in the 2004 year.
3
Lanfranchi sale
During the period, the company entered into a conditional agreement to sell the Lanfranchi
mine and associated tenements at Kambalda for $26.0 million. Subject to the fulfillment of the contractual conditions, it is expected that the sale (net of related costs) will be recognised in the second half of 2004.
Statement of financial position
The group is in a strong financial position. As operators of large world-class assets we
seek to finance our assets and growth opportunities with a mix of equity and debt financing that best balances risk and reward to shareholders.
At 30 June 2004, total assets were $7.6 billion.
At 30 June 2004, the Groups gearing (measured as debt to debt-plus-equity) was just under 20 per cent. The 2003 Global Bond (US$500 million 10 year and US$200
million 30 year tenor) remains in place as core long term debt funding. Given the low gearing and strong cash flows WMC has cancelled part of the existing syndicated debt facility and will refinance the balance in August, prior to the maturity in
November of one tranche with a dual currency revolver bank facility of US$250 million with a two year maturity.
Total equity increased by just under $500 million during first half of 2004, from $3.9 billion at 31 December 2003 to $4.4 billion at 30 June 2004. Total equity was
strengthened by the 2004 first half profit after tax of $514.8 million and from options exercised in the first half in respect of prior period option plans. Partially offsetting this increase was the payment of the 2003 final dividend, net of
dividend reinvestment.
Statement of cash flows
Cash flow from operations for the six months to 30 June 2004 was $601.9 million compared
with $207.5 million for the same period in 2003. The stronger cash flow reflects improved commodity prices, increased copper sales and cash receipts on settlement of hedging contracts.
Capital expenditure for June half 2004 was $198.6 million, $106.4 million lower than the June 2003 half reflecting reduced expenditure on
the construction of the Olympic Dam solvent extractions plants and lower scheduled major maintenance programs compared with the first half of 2003.
During June 2004, WMC took advantage of strong operating cash flows to arrange early repayment of residual foreign exchange and gold hedge obligations relating to the
gold operations previously conducted by the Group. First half 2004 cash flows reflect the settlement of $107.0 million together with the current period payments, totalling $116.1 million.
During the period, borrowings were paid down by $238.2 million, compared with a net borrowings draw down in the June half 2003.
Dividends
In consideration of the strong earnings and cash flows, driven by the cyclical highs in commodity prices, Directors have declared an interim
dividend of 17 cents per share to be paid on 22 September with the record date for entitlements being 6 September.
WMC will continue the Dividend Reinvestment Plan but the Directors have determined that a zero per cent discount will apply to the interim dividend and to future
dividends until further notice.
Risk and control compliance statement
The directors have implemented internal control processes for
identifying, evaluating and managing significant risks to the achievement of the companys objectives. These internal control processes cover financial, operational and compliance risks.
The companys corporate governance practices are outlined in detail in the WMC Business
Performance Report Annual Report Concise 2003 on pages 39 to 47 and the corporate governance section of WMCs website (
www.wmc.com/about/governance.htm
).
The directors have received and considered a certification from the Chief Executive Officer and the Chief Financial Officer in respect of
the integrity of the financial statements and risk management and internal compliance and control systems, and to the extent they relate to financial reporting they are, in all material respects, operating effectively.
It must be recognised, that even well designed, implemented and monitored controls can only
provide a level of assurance of achieving the desired control objectives. Assurance control systems have inherent limitations and no evaluation of controls can provide absolute assurance that all issues have been detected.
4
Non-audit services
WMC is committed to audit independence. The audit committee reviews the independence of the
external auditors on an annual basis. This process includes confirmation from the auditors that, in their professional judgement, they are independent of the WMC Resources group. To ensure that there is no potential conflict of interest in work
undertaken by our external auditors (PricewaterhouseCoopers), they may only provide services that are consistent with the role of the companys auditor.
As WMC is a United States registrant, it is not permitted to use the external auditors to perform specific activities. Those activities have been legislated by Sarbanes
Oxley Act of 2002 and other Securities and Exchange Commission (SEC) rules and regulations on the basis that they impede auditor independence. The external auditors can provide other non-audit services, but cannot provide such services when they
are, or are perceived to be, in conflict with audit independence.
The board of
directors has considered the position and, in accordance with the advice from the audit committee is satisfied that the provision of the non-audit services during the period is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. All non-audit services must be pre-approved by the audit committee. In certain circumstances, that authority is delegated to the audit committees chairman.
The directors are of the opinion that the services as disclosed below do not compromise the
external auditors independence, based on advice received from the audit committee, for the following reasons:
|
|
|
All non-audit services have been reviewed and pre-approved to ensure that they do not impact the integrity and objectivity of the auditor. In certain circumstances, that authority
is delegated to the audit committees chairman;
|
|
|
|
None of the services undermine the general principles relating to auditor independence as set out in the Institute of Chartered Accountants in Australia and CPA Australias
Professional Statement F1 Professional Independence, including reviewing or auditing the auditors own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing
economic risks and rewards; and
|
|
|
|
The services are in accordance with the SEC rules and regulations on auditor independence.
|
A copy of the auditors independence declaration is set out on page 6.
The following fees for non-audit services were paid / payable to the external auditors during the six months to 30 June 2004:
|
|
|
|
|
|
|
Six months to
30 June 2004
|
|
|
|
$000
|
|
Australian tax services
|
|
193
|
|
Overseas tax services
|
|
73
|
|
Project reviews
|
|
98
|
|
Sustainability report services
|
|
89
|
|
Other
|
|
31
|
|
|
|
|
|
|
|
484
|
|
|
|
|
Rounding of amounts
The company is a company of the kind referred to in Australian Securities and Investments
Commission Class Order 98/0100. Amounts shown in this directors report and the financial report have been rounded off to the nearest hundred thousand dollars except where otherwise required, in accordance with that class order.
This report is made in accordance with a resolution of the directors.
|
|
|
|
|
|
Andrew G Michelmore
|
|
Chief Executive Officer
|
|
|
|
11 August 2004
|
5
Auditors independence declaration
As lead
auditor for the review of WMC Resources Ltd for the half-year ended 30 June 2004, I declare that, to the best of my knowledge and belief, there have been:
|
|
(a)
|
no contraventions of the auditor independence requirements of the
Corporations Act 2001
in relation to the review; and
|
|
|
(b)
|
no contraventions of any applicable code of professional conduct in relation to the review.
|
|
|
|
|
|
|
|
|
|
|
|
Paul Bendall
|
|
Melbourne
|
|
Partner
|
|
11 August 2004
|
|
PricewaterhouseCoopers
|
|
|
6
Consolidated statement of financial performance
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
Six months to
30 June 2004
|
|
|
Six months to
30 June 2003
|
|
|
|
|
|
|
$M
|
|
|
$M
|
|
|
Operating revenues
|
|
|
|
1,881.6
|
|
|
1,417.0
|
|
|
Proceeds from sale of assets other than goods
|
|
|
|
2.3
|
|
|
3.1
|
|
|
Interest received/receivable
|
|
|
|
8.4
|
|
|
9.3
|
|
|
Other revenue from outside the operating activities
|
|
|
|
31.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from ordinary activities
|
|
2
|
|
1,924.1
|
|
|
1,429.4
|
|
|
|
|
|
|
|
Cost of goods sold
|
|
|
|
(1,193.0
|
)
|
|
(1,116.2
|
)
|
|
Selling and distribution expenses
|
|
|
|
(50.3
|
)
|
|
(46.2
|
)
|
|
General and administrative expenses
|
|
|
|
(101.2
|
)
|
|
(114.8
|
)
|
|
Exploration and evaluation expenses
|
|
|
|
(10.5
|
)
|
|
(12.2
|
)
|
|
Borrowing costs
|
|
|
|
(24.8
|
)
|
|
(30.5
|
)
|
|
Other expenses from ordinary activities
|
|
|
|
(75.4
|
)
|
|
(70.1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Profit from ordinary activities before income tax
|
|
|
|
468.9
|
|
|
39.4
|
|
|
Income tax credit relating to ordinary activities
|
|
4
|
|
45.9
|
|
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit attributable to members of WMC Resources Ltd
|
|
|
|
514.8
|
|
|
47.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Net exchange differences recognised directly in equity
|
|
|
|
2.6
|
|
|
1.1
|
|
|
Net transfers to retained earnings
|
|
|
|
(3.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenues, expenses and valuation adjustments attributable to members of WMC Resources Ltd and recognised directly in
equity
|
|
|
|
(0.4
|
)
|
|
1.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Total changes in equity other than those resulting from transactions with owners as owners
|
|
|
|
514.4
|
|
|
48.1
|
|
|
|
|
|
|
|
|
|
|
|
The above consolidated statement of
financial performance should be read in conjunction with the accompanying notes.
Earnings per share (EPS)
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
Six months to
30 June 2004
|
|
Six months to
30 June 2003
|
|
Basic EPS (cents)
|
|
5
|
|
44.6
|
|
4.2
|
|
Diluted EPS (cents)
|
|
5
|
|
44.5
|
|
4.2
|
Net tangible assets per share
|
|
|
|
|
|
|
|
|
30 June
2004
|
|
31 December
2003
|
|
Net tangible assets per share ($)
|
|
3.82
|
|
3.43
|
7
Consolidated statement of financial position
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
30 June
2004
|
|
31 December
2003
|
|
|
|
|
|
$M
|
|
$M
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
Cash assets
|
|
|
|
120.5
|
|
100.3
|
|
Receivables
|
|
|
|
413.6
|
|
450.4
|
|
Other financial assets
|
|
|
|
13.3
|
|
13.1
|
|
Inventories
|
|
|
|
574.4
|
|
545.8
|
|
Other
|
|
|
|
78.3
|
|
68.1
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
1,200.1
|
|
1,177.7
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
|
|
Receivables
|
|
|
|
187.7
|
|
277.3
|
|
Other financial assets
|
|
|
|
21.4
|
|
21.3
|
|
Inventories
|
|
|
|
68.4
|
|
71.2
|
|
Exploration and evaluation
|
|
8
|
|
75.6
|
|
68.5
|
|
Property, plant and equipment
|
|
8
|
|
4,502.9
|
|
4,520.5
|
|
Acquired mineral rights
|
|
|
|
1,342.1
|
|
1,354.8
|
|
Deferred tax assets
|
|
|
|
182.0
|
|
46.0
|
|
Other
|
|
8
|
|
20.7
|
|
22.9
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
|
6,400.8
|
|
6,382.5
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
|
7,600.9
|
|
7,560.2
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
Payables
|
|
|
|
396.8
|
|
432.2
|
|
Interest-bearing liabilities
|
|
|
|
190.7
|
|
212.0
|
|
Current tax liabilities
|
|
|
|
2.0
|
|
1.3
|
|
Provisions
|
|
|
|
75.3
|
|
67.7
|
|
Other
|
|
9
|
|
140.0
|
|
184.4
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
804.8
|
|
897.6
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
|
Payables
|
|
|
|
208.4
|
|
379.2
|
|
Interest-bearing liabilities
|
|
|
|
1,020.5
|
|
1,141.2
|
|
Deferred tax liabilities
|
|
|
|
471.4
|
|
382.0
|
|
Provisions
|
|
|
|
126.4
|
|
121.8
|
|
Other
|
|
9
|
|
541.5
|
|
688.7
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
|
2,368.2
|
|
2,712.9
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
3,173.0
|
|
3,610.5
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
|
|
4,427.9
|
|
3,949.7
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
Contributed equity
|
|
|
|
3,783.6
|
|
3,747.7
|
|
Reserves
|
|
|
|
2.1
|
|
2.5
|
|
Retained profits
|
|
10
|
|
642.2
|
|
199.5
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
|
4,427.9
|
|
3,949.7
|
|
|
|
|
|
|
|
|
The above consolidated statement of
financial position should be read in conjunction with the accompanying notes.
8
Consolidated statement of cash flows
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
Six months to
30 June 2004
|
|
|
Six months to
30 June 2003
|
|
|
|
|
|
|
$M
|
|
|
$M
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receipts from customers
|
|
|
|
1,907.2
|
|
|
1,394.8
|
|
|
Payments to suppliers and employees
|
|
|
|
(1,291.5
|
)
|
|
(1,151.0
|
)
|
|
Receipts / (payments) on settlement of hedge contracts
|
|
|
|
19.7
|
|
|
(18.1
|
)
|
|
Interest received
|
|
|
|
8.3
|
|
|
11.9
|
|
|
Borrowing costs paid
|
|
|
|
(31.3
|
)
|
|
(17.9
|
)
|
|
Income taxes paid
|
|
|
|
|
|
|
(1.6
|
)
|
|
Payments for exploration:
|
|
|
|
|
|
|
|
|
|
- Grassroots
|
|
|
|
(8.0
|
)
|
|
(9.3
|
)
|
|
- Additional, supporting existing operations
|
|
|
|
(2.5
|
)
|
|
(1.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
601.9
|
|
|
207.5
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for property, plant and equipment
|
|
|
|
|