Mincor keeps Kambalda rolling

MINCOR Resources is marking increased production at its Kambalda nickel operations in Western Australia as the miner rethinks its copper-gold strategy in Papua New Guinea.
Mincor keeps Kambalda rolling Mincor keeps Kambalda rolling Mincor keeps Kambalda rolling Mincor keeps Kambalda rolling Mincor keeps Kambalda rolling

Production from Kambalda over the three months to September came to 2883 tonnes of nickel in ore, up 17.9% from the previous corresponding period.

The performance was attributed to higher grades and a major change in the roster structure implemented in July at the operation's more southerly Miitel and Mariners mines.

Average nickel grade at Kambalda's southern ops was 3.23% on the period compared to 3.05% in the previous period.

In addition, a stoping system was introduced at Miitel using cement reinforced backfill and "crush firing" of stopes.

Mincor said the method provided numerous productivity and cost advantages and would be introduced at Mariners during the December quarter.

Production at Kambalda's northern sites, including McMahon and Otter Juan, fell off sharply during the period, with the completion of all long-hole stopes at McMahon.

Both mines remain on single shift and are likely to close before the end of the calendar year.

The quarterly report coincided with news that the company would swap its 18-36% joint venture interest in two PNG properties prospective for copper-gold deposits in exchange for a 5% net smelter return royalty on all future production from the tenements.

Mincor said the deal - which concerns the May River and Bolobip sites associated with the large porphyry of OK Tedi - would allow for substantial exposure to the upside of any future discovery without providing any further funding.

Group cash costs for the quarter were $A4.39 per pound of payable nickel, down 14.4% from the same period last year.

Capital costs including development and exploration, however, were up 9.4% year on year to $6.2 million.

Operating surplus was $9.5 million, down 1.2% from a year ago.

Quarter-end working capital was down 13% year on year to $64.7 million and cash at bank was down 17.9% to $57.2 million.

Major expenditures during the quarter included $6.2 million in capital and near-mine exploration spending at Kambalda where three underground rigs and one deep-drilling surface rig were in action.

The work helped the company replace 52% of the nickel mined during fiscal 2012-13 and bring total ore reserves to 673,000t at 3.2% nickel for 21,3000t of nickel in ore.

In counting for the wind-down of operations at McMahon and Otter Juan, the company expects to deliver its targeted production of 8500-900t of nickel in ore during 2013-14.

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