Mining Breaks

The progressive resumption of several of its Brazilian iron ore operations that had been halted due to safety fears following the 2019 Brumadinho disaster has helped Vale reach 327Mtpa production capacity in the March qtr (Q1FY2021).
With further initiatives under way at its Northern, Southeastern and Southern systems, Vale is targeting a return to 400Mtpa by the end of 2022.
Q1 iron ore fines production was 68.04Mt, down from 84.51Mt in the previous period. Pellet production was 6.29Mt (Q4FY2020: 7.12Mt).
Fines and pellets sales were 65.57Mt (91.31Mt), with stronger iron ore production partially offset by lower pellet-feed availability.
Vale predicts FY2021 iron ore production of 315-335Mt.
Finished nickel production, excluding the divested Vale New Caledonia business, declined to 48,400t (50,800t) while maintenance issues reduced copper output to 76,500t (93,500t).

The strong recovery in global diamond markets have helped African producer Petra Diamonds deliver gross revenue of $US106M for the March qtr (Q3FY21), up from $91.3M in the corresponding period.
The result was achieved on total diamond production of 704,498ct (Q3FY20: 932,456ct), with the Cullinan mine in South Africa lifting its contribution by 9% to 436,703ct. Waste control measures and high rainfall reduced output at the Finsch mine by 43% to 253,607ct and Koffiefontein, also in South Africa, by 18% to 14,188ct.
Completion of Petra’s capital restructuring reduced consolidated net debt to $290.7M, from $700.4M at end-Dec 2020.

Diamond producer BlueRock has lowered its FY2021 guidance to 30,000-39,000ct after adverse weather conditions reduced March qtr (Q1) production from its Kareevlei mine in South Africa’s Kimberley region to 3,507ct, down from 15,371ct in the prior period.
Grade improved to 4.08cpht (Q4FY2020: 3.8cpht). Sales were also down to 4,004ct (16,290ct) although the significant market recovery saw average prices improve to $US446/ct ($295/ct).
Exec chairman Mike Houston says BlueRock’s new project team has reprioritised elements of the Kareevlei expansion project, and now expects the upgraded plant to be fully operational a month later than previously anticipated by end-July.

Top Australian pure play coal producer Yancoal has pinned its hopes of reaching its FY2021 production guidance on a recovery over the next 9 months after rain and floods particularly at its Hunter Valley mines in NSW slashed March qtr (Q1) ROM coal production by 17% to 14.3Mt, from 17.3Mt in the previous period.
Attributable saleable coal production was 8.7Mt (Q4FY2020: 9.1Mt). Production sales also declined to 8.6Mt (9.4Mt), comprising 7.2Mt thermal and 1.4Mt metallurgical, but the improving Newcastle coal index due to sector-wide weather disruptions on mining and rail operations and a damaged shiploader lifted realised prices to $A88/t ($72/t).
Yancoal predicts FY2021 saleable coal production of 39Mt but now expects cash operating costs to be at the top end of its $60-62/t range.

Russian gold major Petropavlovsk has seen total gold production from its operations throughout the country fall to 95,600oz in the Mar 2021 qtr (Q1 21) from Q4 20’s 113,500oz.
The only winner was Malomir up to 36,000oz from 29,400oz, with the others all down -- Pioneer to 24,000oz from 27,900oz, Albyn to 22,300oz from 28,200oz and 3rd-party concentrate (POX Hub) output plunging to 13,200oz from 28,00oz.
The company expects FY/CY 21 gold production of 430,000oz-470,000oz, comprising own gold output of 370,000oz-390,000oz and gold production from 3rd-party concentrate of 60,000oz-80,000oz.
The company finished Q1 21 a cash balance up to $US20.4M from $4.3M.

Developer Hastings has strengthened the economic viability of its Yangibana rare earths project in Western Australia with the signing of an exclusive global marketing and distribution agreement with thyssenkrupp Materials Trading.
Under the agreement, Yangibana will supply 70,000t mixed rare earth carbonate over 10 years to TK, the western world’s largest mill-independent distributor and service provider. TK will take 9,000tpa, representing 60% of annual production, for the first 5 years and 5,000tpa (33%) for years 6-10.
The deal allows Hastings to supply its established customers and direct uncommitted volume to the spot market.
Hastings aims to begin early earthworks within months at Yangibana, 270km NE of Carnarvon in WA’s Gascoyne region, heading for first production by late 2023.
Exec chairman Charles Lew says the TK deal will support Hastings’ efforts to secure credit approvals for the planned $A335M development.

The Mar 2021 qtr (Q1 21) mining of Phase 4b and Phase 6b of Turquoise Hill Resources’ Oyu Tolgoi operation in Mongolia has moved deeper into the higher grade ore zone lifting copper production to 45,449t, up 9% on Q4 20, gold output 66% better to 145,656oz and silver to 255,000oz from 231,000oz.
The result was on the 51% subsidiary of Rio Tinto lifting mill throughput 2% to 9.81Mt and average copper mill grades up to 0.56% from 0.50%, gold to 0.68g/t from 0.41g/t and silver to 1.29g/t from 1.16g/t. Access to higher copper/gold grades in Q1 21 is expected to continue through the remainder of the year.

Scheduled plant shutdowns for relines of the SAG and Ball mills, and the upgrade of the pebble crushing circuit has seen Gold Road Resources’ 50%-owned Gruyere project gold production in Western Australia's NE Goldfields, fall to 66,213oz (100% basis) for the Mar 2021 qtr (Q3 21) from Q2 21’s 70,794oz at AISC up to of $A1,386oz attributable from $1,265oz.
Gruyere ore tonnes processed was unchanged at 2.1 Mt, as was the head grade of 1.12g/t, with gold recovery easing to 91.2% from 91.8%. Gold sales fell to 32,100oz from 34,554oz, as did free cash flow to $15.1M from $28.2M.
However, Gruyere, 50% owned/operated by Gold Fields, is now well positioned to improve on plant utilisation and throughput in line with 2021 guidance of 130,000oz-150,000oz attributable and the 3-year outlook that sees production lifting to a sustainable ~350,000oz pa in 2023.
Gold Road finished Q3 21 with cash/equivalents up to $149.8M from $132.9M and no debt drawn.

Australia’s 2nd largest independent sulphide nickel miner, Western Areas’ 100%-owned Forrestania mine, 400km E of Perth in Western Australia, has had its best qtr year to date with Mar 2021 qtr (Q3 21) nickel mined jumping to 4,236t from Q2 21’s 3,518t as higher grade areas at Flying Fox were re-accessed and improved grades mined at Spotted Quoll.
Despite total ore mined easing to 117,613t from 124,459t, the grade rose to 3.6% from 2.8%, with total nickel-in-concentrate up to 4,267t from 3,535t following a lift in average feed grade and mill recoveries. Total nickel sales rose to 3,962t from 3,336t and the unit cash cost of nickel-in-concentrate fell to $A4.07/lb from $4.67/lb ($US3.15/lb from $3.41/lb).
The company finished Q3 21 with cash at bank of $A152.8M and no drawn debt.

Rio Tinto is maintaining full year production guidance at its West Australian Pilbara iron ore operations despite reduced March qtr (Q1) output attributed to wet weather and labour shortages affecting maintenance and fixed plant reliability, capped by last month’s tropical cyclone Seroja.
Total Q1 production was 76.4Mt, down from 86Mt in the previous period, and shipments also declined to 77.8Mt (Q4FY2020: 88.9Mt). The global iron ore No 2 says it will prioritise maintenance of the mine processing facilities for the rest of the year.
FY2021 shipments guidance remains 325-340Mt, although Rio cautions it’s subject to risks associating with tying in some 90Mt of replacement mine capacity as well as the perennial weather and market conditions.
Q1 bauxite production was 13.6Mt (13.3Mt) despite weather impacts in eastern Australia including a 2-week shutdown of the port at its Amrun mine at Cape York. Full year guidance remains 56-59Mt.
Lower recoveries and throughput at Escondida (Chile) and Kennecott (USA) cut mined copper production to 120.5Mt (132.5Mt), but guidance for the full year is unchanged at 500-550Mt.

Americas focused McEwen Mining has flagged a 20%-40% jump in gold/silver production for the current Dec 2021 year (FY/CY 21) from the previous year, despite Mar 2021 (Q1 21) gold output easing to 23,300oz from Q4 20’s 24,100oz and silver to 493,200oz from 532,400oz taking gold equiv production down to 30,600oz AuEq from 31,100oz
Following FY/CY 20 output of 92,100oz gold and 2.02Moz silver for gold equiv of 115,600oz, the FY/CY 21 guidance is for gold up to 110,500oz-127,90oz and silver to 2.3Moz-2.45Moz for gold equiv of 141,000oz-160,400oz.
Q1 21 saw gold equiv production from the San José mine in Argentina (49%) up to 16,700oz from 15,600oz and the Gold Bar mine, Nevada, US (100%) up to $7,400oz from 6,000oz, but with Fox complex, Timmins, Canada (100%) sliding to 5,200oz from 8,000oz and El Gallo, Sinaloa, Mexico (100%) down to 1,300oz from 1,500oz.

A blast misfire that restricted ore access may have ended its run of three successive 20,000oz-plus quarters at its Dalgaranga mine, but West Australian miner Gascoyne Resources is still on track for the upper end of its FY21 gold production guidance of 70,000-80,000oz at AISC of $A1,200-1,300/oz for the year to June 2021.
Work to clear the misfire area at the mine 65km NW of Mount Magnet lowered March qtr (Q3FY21) production to 19,203oz (Q2: 20,381oz) at $1,114/oz ($1,100/oz). Sales of 19,073oz (21,341oz) at $2,495/oz ($2,605/oz) generated $47.59M ($55.6M) revenue.
While ore grades were lower at 0.92g/t (1.03g/t) due to the misfire aftermath, MD-CEO Richard Hay says Dalgaranga’s processing plant continues to exceed design capacity at very low unit costs.
Gascoyne paid down $19M debt, ending Q3 with $9.5M ($0.8M) net cash and $27M ($37.3M) cash balance.

The migration of mining operations from Northern Vertex Mining’s 100% owned Moss Gold Mine in Mohave County, NW Arizona, US, from Center pit to the East and West Pits has come at a cost with Mar 31, 2021 qtr (Q3 21) gold equiv production down to 9,912oz AuEq from Q2 21’s 12,401oz.
The West Pit is now fully developed to support the use of large mining equipment allowing for more efficiency and lower unit costs. However, Q3 21 gold output was down to 8,787oz from 11,124oz, despite ore mined up to 705,653t from 571,703t and the grade easing to 0.48g/t from 0.55g/t.
The company finished Q3 21 with $US13.8M cash on hand.

Americas-focused Equinox Gold has sold its Pilar Gold Mine in Brazil to soon to be listed Canadian privateer Pilar Gold Inc for $US38M cash, a 9.9% stake in Pilar Gold and a 1% net smelter returns royalty on production from the Pilar mine.
The Pilar mine accounts for about 35,000oz or 5% of Equinox’ 2021 production guidance of 600,000oz-665,000oz. The guidance will be updated in May to reflect the Pilar mine sale and addition of the producing Mercedes Gold Mine in Mexico to Equinox’s portfolio that came with completion of its acquisition of Premier Gold Mines.
As part of its assets re-arrangement, Equinox also recently completed its $51M acquisition of an additional 10% in the multi-million-ounce, fully permitted, construction-ready Greenstone Gold Project in Ontario, Canada, bringing its total interest in the project to 60%. Greenstone will be advanced in a J/V with Greenstone seller Orion Mine Finance Group, bringing more than an annual 240,000oz attributable to Equinox when in production.

New West Australian iron ore producer GWR has plumped for a demerger of the gold resource at its Wiluna West project, planning to seek shareholder approval for a $A5-7M IPO and ASX listing for its wholly owned subsidiary Western Gold Resources.
The project has JORC mineral resources of 293,000oz (4.57Mt @ 2g/t) with significant exploration upside alongside its under-explored 22km of the Joyners Find greenstone belt.
Chairman Gary Lyons says GWR believes a standalone entity will attract better investor attention and capital for aggressive and systematic exploration. GWR aims to distribute 36.1M of the 20c WGR shares to its shareholders.
The demerger will allow GWR to focus on its Wiluna West iron ore project.

The ramp-up of its Yaouré mine in Côte d’Ivoire has lifted March qtr (Q3FY21) gold poured by African-focused producer Perseus Mining to 88,458oz, up from 68,614oz in the previous period. AISC has also improved to $US999/oz (Q2: $1,036/oz).
Gold sales grew to 87,215oz (66,644oz) at $1,628/oz ($1,687/oz) for notional cashflow of $41.7M ($44.6M).
After it completed commissioning during the qtr, Yaouré delivered 22,095oz (2,687oz) and achieved commercial production on Mar 31.
The Edikan mine in Ghana produced 40,824oz (39,105oz) at $1,202/oz ($1,266/oz) and Sissingué in CdI contributed 25,539oz (26,822oz) at $675/oz ($701/oz).
Australian-based Perseus maintained its FY21 forecast at 312,386-327,386oz at $970-1,067/oz.

A feasibility study for Roxgold’s 90%-owned, high-grade Séguéla Gold Project in Côte d’Ivoire, envisages an open-pit operation targeting a series of open-pit mines at 5 deposits feeding a central gold processing facility with an initial 9-years LoM producing 1.03Moz from an average output of 120,000oz pa.
This includes average annual gold production of 133,000oz over the 1st 6-years of production, peaking at 151,000oz in year-4 at average LoM cash costs produced of $567oz and AISC of $832oz.
The $US277M pre-production and sustaining capex project is flagged to begin with an initial nameplate 1.25Mtpa throughput rate, rising to 1.57Mtpa in year-3 through a series of optimisation/debottlenecking measures.
The FS ascribes Séguéla an after-tax NPV5%, attributable to Roxgold’s 90%, of $380M and 49% IRR, generating LoM after-tax net cash flow of $536M at a gold price of $1,600oz, based on initial proven/probable reserves of 12.1Mt at 2.8g/t Au containing 1.1Moz, putting the operation among the highest-grade open pit gold projects globally. Front-end engineering and design work is already well advanced.

South African vanadium producer Bushveld Minerals has suspended production at its 74%-owned Vametco opencast mine due to unprotected industrial action that began on the morning shift on April 16.
Bushveld says it has had not formal notice from the Association of Mineworkers and Construction Union, but understands the action relates to expectations of payments under a recently agreed employee participation plan.
The EPP is designed to establish a framework for employees to share in the company’s performance, but Bushveld says the workers’ expectations are not in keeping with the agreement.

Australian-based international miner Resolute is considering new development or sale options for its mothballed Bibiani gold mine in Ghana after Chinese buyer Chifeng Jilong Gold Mining terminated the $US105M purchase agreement signed in Dec 2020.
The deal was in doubt after the Ghanaian government revoked Resolute’s mining lease over the project, then reinstated the lease last week in a decision that did not recognise the Chifeng transaction.
Chifeng gave the revoking of the mining lease and its impact on the project value as the reason for pulling out. Chifeng has demanded the return of its $5M deposit.

West Australian explorer Middle Island Resources is pondering more organic growth opportunities after its feasibility study into recommissioning its 100%-owned Sandstone gold project delivered marginal, if cashflow positive, outcomes for a stand-alone development.
MDI says results are impacted by declining gold prices and unfavourable exchange rate movements, plus higher costs for some capital items and personnel, contract mining and fuel since mid-2020.
Recommissioning as a stand-alone project is not justified at the current $A2,300/oz gold price, particularly when inferred resources are excluded.
MD Rick Yeates says a 750,000tpa mill upgrade combining MDI’s openpit with third-party resources within trucking distance may render otherwise uneconomic projects viable.