• Manganese ore production for Q3 2014 was 2% lower than in Q3 2013. Australian manganese ore production increased 7% offset by a 10% decrease of Ghanaian manganese ore production compared to Q3 2013. Overall, total manganese ore produced year to date in 2014 was 1% higher compared to the equivalent period in 2013.
• Manganese C1 cash costs for Q3 2014 were $2.52/dmtu, an increase of 3% compared to Q3 2013. Manganese C1 cash costs year to date in 2014 improved from $2.50/dmtu in 2013 to $2.43/dmtu in 2014 continuing the positive trend seen over the last three years.
• Total manganese sales tonnes decreased 41% in Q3 2014 compared to Q3 2013. Australian manganese tonnes shipped decreased by 7% over the same period and Ghana manganese tonnes shipped were 75% lower than Q3 2013 as a result of the termination of the TMI contract.
• Average manganese FOB sales price achieved decreased 21% from $4.84 in Q3 2013 to $3.83 in Q3 2014. Overall, average manganese FOB sales price achieved year to date decreased 18% from $4.91 in 2013 to $4.04 in 2014.
• The average manganese ore price for Q3 2014 (CRU, 44%Mn CIF China) was $4.35/dmtu, down 2% from $4.43/dmtu in Q2 2014. The Company?s average price for its Australian 46%Mn lump product, CIF China, was $4.65/dmtu in Q3 2014, down 3% from $4.80/dmtu in Q2 2014.
• Adjusted EBITDA for Q3 2014 was $21 million, down from $92 million in Q3 2013, a decrease of $71 million. The decrease is principally due to lower revenues partially offset by favourable stock movements. Cash EBITDA for Q3 2014 was $2 million, down from $87 million in Q3 2013.
• The Group recorded a loss for the period of $15 million compared to a profit of $122 million in Q3 2013.
• During the quarter the Company had an operating cash inflow from continuing activities of $20 million compared to an inflow of $66m in Q3 2013.
• Cash and cash equivalents net of overdraft increased by $2 million to $70 million in the quarter to September 2014 with net debt decreasing by $3 million to $338 million over the same period.
• In July 2013 the Company ceased mining at its Coobina chromite mine and final sales of chromite ore concluded in Q1 2014. As a result Coobina has been reclassified as a discontinued operation in the statement of comprehensive income for Q3 2014 and Q3 2013.
• As announced in late August, the Company terminated its agreement with TMI as a result of TMI's breaches and non-performance and as a result the Company will suffer loss and damage. The agreement provided the Company with the right to draw down on a $50 million standby letter of credit (?LC?) and the right to bring arbitration proceedings for damages arising from TMI?s conduct. Following the Company's valid drawdown demand on the standby LC, TMI launched court proceedings and obtained a temporary injunction, alleging fraud in connection with the LC to prevent payment. The Company regards this allegation as entirely wrong and is actively contesting the decision in the Chinese Courts with the intention of lifting the injunction as soon as practicable. Arbitration proceedings have also commenced against TMI in London in accordance with the terms of the agreement in order to recover losses arising from the situation. We continue to pursue the arbitration proceedings in London and vigorously protest against the standby LC injunction in the Chinese courts.

Key Performance Indicators

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1. ¹Average C1 manganese represents the cash cost incurred at each processing stage from mining through to shiploading, over the total manganese dmtus produced. Included within the C1 manganese unit cash costs are an allocation of offsite, non-corporate and support services. Depreciation, government royalty payments, deferred stripping adjustments and stockpile movements are not included in the calculation.
2. ² ?Adjusted EBITDA? is defined as operating profit before depreciation and amortisation, impairment write-back/expense, net foreign exchange gain/loss, non-cash inventory write-downs and exceptional items?. This is one of the key profitability measure used across the business and reflects performance in a consistent manner and in line with how the business is managed and measured on a day to day basis. Adjusted EBITDA is not a uniformly or legally defined measure and is not recognised under IFRS or any other generally accepted accounting principles. Other companies in the mining industry may calculate this measure differently and consequently, our presentation of Adjusted EBITDA items may not be readily comparable to other companies? figures.
3. ³Exceptional items are material or non-recurring items excluded from management?s assessment of profits because by their nature they could distort the Group?s underlying quality of earnings. These are excluded to reflect performance in a consistent manner and in line with how the business is managed and measured on a day to day basis.
4. ⁴?Cash? EBITDA is defined as Adjusted EBITDA after removing the impact of the non-cash items of deferred stripping and net movement in inventories.
5. ⁵Refer to note 6 of the Unaudited Condensed Consolidated Interim Financial Information.

Commenting on the results, David Slater (CFO of Consmin) said:

?During the third quarter, Consmin delivered steady operational performance. Financial performance for the quarter was substantially lower as a result of the combination of difficult pricing environment, the termination of the TMI contract and its subsequent impact on the sales of Ghana ore.

Manganese C1 cash costs for third quarter were $2.52/dmtu, a slight increase compared to Q3 2013. However, Manganese C1 cash costs year to date in 2014 improved from $2.50/dmtu in 2013 to $2.43/dmtu in 2014 continuing the positive trend seen over the last three years.

In late August, the Company announced the termination of the agreement with TMI as a result of TMI's breaches and non-performance. The agreement provided the Company with the right to draw down on the $50 million standby letter of credit and the right to bring arbitration proceedings for damages arising from TMI?s conduct. Following the Company's valid drawdown demand on the standby letter of credit, TMI obtained a temporary injunction, alleging fraud in connection with the LC to prevent payment. The Company regards this allegation as entirely wrong and is actively contesting the decision in the Chinese Courts with the intention of lifting the injunction as soon as practicable. Arbitration proceedings have also commenced against TMI in London in accordance with the terms of the agreement in order to recover losses arising from the situation. We continue to pursue the arbitration proceedings in London and vigorously protest against the standby LC injunction in the Chinese courts.?

• [Editor:Sophie]