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UPDATE - Shaft Sinkers mulling asset sales to ease South African pressure

Published: 22:26 19 May 2014 AEST

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--adds share price, broker comment--

Mine excavation specialist Shaft Sinkers (LON:SHFT) warned today that an improvement at its international operations is being offset by the worsening situation in its core South African market.

The company  has a number of contacts with platinum miners in South Africa, where production has been paralysed for more than four months by industrial action.

Shaft Sinkers made a £2.7mln loss (£2mln loss) in the period January to 16 March and said its South African business  faces substantial challenges and the company an increasingly tight cash position overall.

To alleviate the cash pressure, the company is mulling the sale of assets to clients , disposal of surplus property, measures to reduce the recovery cycle of receivables and the deferral of non-essential expenditure. 

In addition, the group is targeting a further reduction in operational overheads with the aim of improving cash flows

Broker Westhouse said that as well as the industry-wide industrial action, its operation had been hit by safety stoppages at Impala 17, and operational underperformance at its Styldrift project.

International operations were also below management’s expectations during the period despite a strong performance at the Kibali, but its performance at Hindustan Zinc had improved recently.

Shares were down 22% at 11.7p.


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