Mining Breaks

As the world's largest primary silver company and Mexico's biggest gold producer Fresnillo continues to implement its improvement plan, 9-months YTD Sept 19 silver and gold output have both fallen – silver down 11.8% on YTD18 to 40.8Moz and gold down 7% to 642,169oz.
Silver’s decline was down to lower ore grades at both Fresnillo and Saucito, with gold’s fall driven by lower ore volumes at Noche Buena, lower recovery speeds and ore volumes processed at Herradura, and lower ore grade at San Julián.
On the positive side, lead output rose 7.4% to 40,725t, with zinc up 5.9% to 67,746t.
FY/CY 19 silver production is likely to be at the lower ends of the guided 55Moz-58Moz and 880,000oz-910,000oz gold.

Centamin has had a steady 9-months YTD 2019 (YTD19) with gold production from its sole producing, 100%-owned Sukari Gold Mine in Egypt down 1% on YTD18 to 332,141oz, but at unit cash costs produced up 18% to $US742oz and AISC sold up 10% to $917oz. Q3 19 production fell 17% to 98,045oz.
YTD19 gold sales eased the same to 332,955oz, but with the average realised price up 6% to $1,362oz. The result was on ore processed up 5% to 9.8Mt, feed grade down 1% to 1.18g/t and gold recovery down 1% to 87.6%.

A record 9-months Sept 2019 (YTD 19) gold equivalent production from its Inmaculada mine in Peru has helped Hochschild Mining to the 2nd highest YTD total in the company’s history, albeit down on YTD18’s 381,730oz to 366,721oz AuEq.
Gold output from its 4 operations rose to 205,875oz from YTD 18’s 199,94oz, but with silver easing to 13Moz from 14.7Moz for gold equiv of 366,721oz from 381,73oz and silver equiv slipping to 29.7Moz AgEq from 30.9Moz. The company remains on track for a FY/CY19 457,000 AuEq (37Moz AgEq) at AISC $US960oz-$1,000oz AuEq ($11.8oz-12.3oz AgEq).

Chilean major Antofagasta is maintaining FY2019 production guidance at 750,000-790,000t copper with costs below $US1.25/lb despite Sept qtr (Q3) output declining to 197,000t copper and 77,600oz gold from the previous period’s 198,600t Cu and 86,900oz Au. Net cash costs improved marginally to $US1.12/lb (Q2: $1.14/lb).
CEO Iván Arriagada says its strong production was underpinned by consistent operating performance, and higher grades at some operations.
YTD production rose to 584,200t (YTD2018: 505,500t) copper and 226,600oz (120,100oz) gold at $1.17/lb ($1.42/lb).
The continuing decline in grades at its 70%-owned Centinela Concentrates operation is expected to lower FY2020 production to 725,000-755,000t Cu before recovering in 2021.

Russian-Zimbabwean platinum venture Great Dyke Investments needs another $US500M for the 1st phase of its Zimbabwean platinum mining project and is in advanced financing talks with Russian and South African lenders, Reuters reports.
Russia’s Vi Holding, through subsidiary JSC Afromet, owns half of GDI, which is developing the Darwendale Platinum Project near Harare, with Zimbabwe’s Landela Mining Venture owning the rest.

An armed gang which stole an estimated 17kg of gold from DRDGold’s Ergo operations E of Johannesburg, S Africa, has left the company’s chief security officer dead following an exchange of gunfire, Reuters reports.
The gang escaped with a quantity of calcine concentrate, estimated to contain up to 17kg of gold.

Canadian-based Advantage Lithium outlines $US446M initial capital expenditure for a 25,000tpa lithium carbonate development with a 30-year mine life in the PFS for its 75%-owned Cauchari project in Argentina’s Jujuy province. Orocobre holds 25%.
Steady-state operating expenditure is $3560/t. It calculates after-tax NPV at 8% discount of $671M, IRR of 20.9% and payback of 58 months.
The Worley Chile study is based on a 1.02Mt LCE @ 480mg/litre proven and probable mineral reserves from 4.8Mt measured and Indicated mineral resources, with reasonable prospects to convert 1Mt inferred resources in the lower sand units of the salar.
Interim CEO Callum Grant says Advantage aims to engage quickly with potential investors.

Western Areas has lifted Sept 2019 qtr (Q1 20) nickel production from its 100% owned Forrestania Nickel Project in Western Australia to 5,805t from Q4 19’s 5,423t, generating net free cash-flow of $A21.6M and taking cash-at-bank to $165.9M from $144.3M .
The result came despite ore processed at Australia’s highest grade nickel mine slipping to 149,729t from 152,329t at 3.9% Ni from 4% for nickel-in-conc down to 5,259t from 5,433t and shooting for a FY20 21,000t-22,000t. Cash costs increased to $A3.06/lb from $2.96/lb with FY20 expectations at $2.90/lb-$3.30/lb.
Nickel sales also fell to 5,051t from 5,890t, but with the average nickel price up to $A11.50/lb from $8.09/lb. Western Areas finished Q1 20 with cash-at-bank and nickel sales receivables up to $207.3M from Q4’s $157.1M.

West Australian miner Westgold has confirmed it expects a shortfall of about 2,500oz in Dec qtr (Q2FY20) production from its Meekatharra Gold Operations after completing repairs on the SAG mill and restoring full capacity operations at the Bluebird processing plant.
The mill was out of action for 20 days due to the failure of mill bearings, although gold production continued at half-rate using an amended processing circuit.

Australian gold miner Red 5 is maintaining its FY20 production guidance at 110,000‐120,000oz at AISC of $A1,350-1,500/oz after delivering 28,649oz at AISC of $1,476/oz from its Darlot and King of the Hills operations in WA in the Sept qtr (Q1), compared to 30,098oz at $1,331/oz in the prior period. Gold sales were 24,924oz (Q4FY19: 27,406oz).
Red 5 ended with group cash and bullion of $40.1M at end-Sept ($24.9M).
MD Mark Williams says the FFS for its KOTH bulk mining operation, due for completion in mid-2020, has potential to elevate Red 5 to a mid-tier Australian gold producer.

Rio Tinto says a full shutdown is among the options for a newly launched review of the future of its Tiwai Point aluminium smelter in Southland, NZ.
The review into the 350,000tpa smelter, a JV between Rio Tinto (79.36%) and Sumitomo Chemical Co (20.64%), is due for completion in the March 2020 qtr.
Rio Tinto Aluminium chief executive Alf Barrios blames historically low prices due to market over-supply and high energy costs for making the 48-year-old NZAS facility unprofitable.
It will work with government, power supplier Meridian Energy, suppliers and employees to seek a profitable outcome.
A decision to close the plant is expected to trigger remediation costs of $NZ256M.

Continued operational improvement has seen Sept qtr (Q3) production by TSG at its Asacha mine in Russia’s far east increase to 12,620oz (Q2: 9,544oz) gold in dore and 24,686oz (27,692oz) silver in dore.
CEO Alexander Dorogov says its production of 34,509oz for the YTD places the company firmly on track to meet the upper end of annual output guidance of 40,000-44,000oz.
Sales of 9,417oz (10,113oz) gold and 21,959oz (32,937oz) silver at average realised gold price of $US1,485/oz ($1,313/oz) and silver price of $14.80/oz ($14.70/oz) delivered total revenue of $14.31M ($13.88M).

Global miner Anglo American has had mixed Sept 2019 qtr (Q3 19) with coal, iron ore, gold, nickel and manganese all up on Q2 19, but diamonds and platinum group production down.
The standout was the ramping Minas-Rio iron ore operation, up 4% to 6.1Mt , with its FY/CY19 guidance increased to 20Mt-22Mt from 19Mt-21Mt on continued strong performance.

Brazilian miner Vale has closed another iron ore tailings dam in Minas Gerais for further geotechnical studies into its safety. The Itabiruçu dam, part of Vale’s Itabira Complex, receives tailings from the Conceição mine.
Vale says the shutdown will cost only about 1.2Mt in production this year, as the dam is scheduled to be halted for most of 2020 under its comprehensive review and rehabilitation programs before production resumes at about 50Mtpa.
However, it will further lower Vale’s guidance to the lower-to-midpoint point of its 307-332Mt iron ore and pellet sales for FY2019.
The shutdown will not require evacuation of local population downstream of the dam.

Australian-based Vital Metals has transformed itself into a near-term rare earth oxide producer with the completion of its acquisition of privateer Cheetah Resources and its Nechalacho project at Thor Lake in Canada’s NW Territories.
Geoff Atkins, who joins Vital as MD from Cheetah, says work has continued at Nechalacho during the due diligence and regulatory approvals processes.
Conversion of Nechalacho’s NI 43-101 compliant resource of 149.3Mt @ 1.4% REO to JORC compliance is under way.
Vital aims to complete a process flowsheet in Dec, anticipated to be the only metallurgical testwork prior to releasing a start-up study.

Latin American-focused Austral Gold posted Sept qtr (Q3) production from its Guanaco and Amancaya mines in N Chile of 17,879oz gold equivalent, comprising 16,273oz gold and 136,867oz silver. The result compared to 18,322oz AuEq in the prior period.
The Casposo mine in Argentina contributed nothing during the period after producing 1,275oz in the June qtr before being placed on care and maintenance.
Austral maintained its CY2019 guidance for Guanaco/Amancaya at 70,000-75,000oz AuEq at AISC of $US950-1,000/oz.
Consolidated operational cash-flow was $6.1M (Q2: $3.8M). Austral ended the period with cash and cash equivalents of $4.5M ($2.5M).

A 41% QoQ nickel price increase and higher gold/cobalt prices have lifted Independence Group’s Sept 2019 qtr (Q1 20) revenue from its 2 Western Australia operations 29% on Q4 19 to a record $A263M.
The increases lifted the company’s Q1 20 after tax profit 119% to $66M and underlying EBITDA 64% to $153.9M.

Extended maintenance at Orocobre’s 66.5%-owned Olaroz lithium facility in N Argentina during August, has helped cut Sept 2019 qtr (Q1 20) production 10% on Q4 19 to 3,093t, with sales down 8% to 3,108t, pushing revenue down 30% to $US22.1M.
The average price received also fell 13% to $7,111t, with the cost of sales up 9% to $4,885t. Orocobre expects FY 20 production will be at least 5% higher than FY 19’s 12,605t.
At end Q1 19, Orocobre corporate had an available $223.5M cash, with net group cash at $151.2M.

It’s been subject to exploration since the 1980s, but Greenvale Energy has released a maiden inferred resource of 299,800oz (8.35Mt @ 1.12g/t Au) at the Gold Basin oxide gold project in NW Arizona, USA.
Greenvale says the resource calculation by GeoRes draws on historical results plus new drilling at the Cyclopic and Stealth deposits.
Mineralised sub-horizontal layers at Cyclopic remain open in all directions amid indications of more layers at depth.
Greenvale is investing $A550,000 in work programs to earn an effective 25% from JV company Aurum Exploration, and may increase to 100%. It says the investment diversifies risk from its Alpha Resources shale oil project in Qld, Australia.

Australian mining magnate Clive Palmer has renewed a push to develop a new coal mine in Australia’s Queensland state, close to the controversial Carmichael Coal Mine under construction by India’s Adani Enterprises, Reuters reports.
Palmer’s Waratah Coal has applied to Australia’s Department of Natural Resources for a 35-year mining lease in the Galilee Basin, a new coal region that won the green light this year for development.
The application signals a resumption in development planning for the mine, 1st proposed in 2011, but on ice in recent years. A rail line by Adani is expected to open the basin with transport to the coast, making other coal projects in the region more viable.