WSA sets 10-year target at higher production rate
Mark Mentiplay, 26th Apr 2012
PERTH, Apr 26 – Record sales, recent resource upgrades and near future expansion plans bode well for Western Areas’ 12-year-old Forrestania nickel project, 400km east of Perth in Western Australia.
It seems the only stumbling blocks are the same facing all mineral producers – commodity prices and the exchange rate.
The company has just posted record March quarter sales, is looking to increase Spotted Quoll production by 5000tpa to 15,000tpa, expand its high grade Cosmic Boy concentrator from 550,000tpa to 750,000tpa and has launched an aggressive six month underground drilling program to lift the recently acquired Lounge Lizard’s indicated resource beyond 41,940t of nickel. The current drilling campaigns are designed to achieve a 10-year mine life and lift total mineral resources for Flying Fox beyond 2Mtpa, for 115,650t of nickel at an average 5.8%.
The March production record was largely down to improved shipping logistics that saw sales of 8,154t of nickel in concentrate, with second half concentrate sales predicted at around 15,000t contained nickel, 25% higher than the first half, and bringing nine month sales to 19,392t.
Combined mine production for the quarter was 7602t at 4.7% nickel. Flying Fox mine production, including Kagara ore from March 1, was 81,143t at 5.3% for 4278t, which was 28% lower than the December quarter due to stope backfilling and level preparation work in the upper T5 orebody levels, but offset by higher grades. The Tim King pit at Spotted Quoll produced 57,204t at 4% for 2280t, while Spotted Quoll underground production of development ore was 23,651t at 4.5% for 1044t.
Average cash costs (before smelting/refining charges) of nickel in concentrate were $A2.48/lb, a foreshadowed increase of $A0.33/lb reflecting the completion of the low -cost Tim King open pit at Spotted Quoll that delivered 28,502t of nickel in ore, well above the initial ore reserve estimate of 19,900t.
Western Areas says it is encouraged by the sheer size of the Spotted Quoll underground mineral resource, which currently stands at around 177,000t of nickel and still open in all directions. Current Spotted Quoll mine optimisation plans, expected to be completed in the June quarter, are aimed at increasing life of mine production from 10,000tpa to a potential maximum 15,000tpa.
At the end of the March quarter, 175,971t of ore at an average 4.2% containing over 7312t of nickel was stockpiled awaiting treatment at the Cosmic Boy concentrator. During the next six months, the company expects to draw down these stockpiles as the underground operations at Spotted Quoll ramp up. The current stockpile represents over three months of mill feed.
Approval of the Spotted Quoll LOM plan is also expected to require an increase in Cosmic Boy’s high grade concentrator’s capacity from 550,000tpa to 750,000tpa, a formal announcement on which is scheduled for late in the June quarter.
Western Areas has also launched an aggressive six month underground drilling program at its recently purchased, $A68M Lounge Lizard deposit beyond the current indicated resource of 41,940t within 724,900t at an average 5.8%.
Mark Mentiplay has shares in Western Areas.
Also in the April 18 - 24, 2012 edition
- AFRICA
- Canyon in on ground floor
- Galileo stuns market with resource
- ASIA DESK
- Tavan Tolgoi float now the bellwether
- CHINA
- China only ‘half built’
- ENGINEERING
- Engineering specialists combine
- EUROPE
- Counting Greek and Romanian chickens
- EVENTS
- Follow the money!
- EXPLORATION
- Looks like a turtle, but Helix sees beauty emerging
- SAM signs useful on road to gold production
- Talga's change of place
- Widubosh a puzzle worth solving
- FINANCE
- BMO takes fresh, positive view on base metals
- Copper faces flat road ahead
- Lea sees next Polaris on his radar
- FORUM
- Missing something
- West End feedback: Try sometimes
- FROM THE CAPITAL
- Missed timelines hit investment returns
- GOLD
- Gold’s new world
- One door leads to another
- INSIGHT
- Auto-mining's missing pieces
- INTERCEPTS
- Agnico makes a strong start to 2012
- Alacer Gold ups production guidance
- Alcyone gets bigger at Texas
- Altura doubles Kalimantan coal ground
- AME targets new Mali permit
- Andy Well first gold mid-2013
- Anglo American concludes asset sale
- Aquarius raps unions, government
- Atlas weathers the storm
- Atlas, QR link to offer Pilbara rail solution
- Atlas, Venturex on the same road
- Atlatsa, a new name for Anooraq
- Australia opening Woomera area to explorers
- Bauba lifts Bushveld PGM figures
- Beacon Hill price fails to track successes
- Beadell’s Brazil plant on schedule
- Beowulf faces reindeer objections
- BGC wins Roy Hill projects
- Boikarabelo coal mine moves closer
- Cashed-up Minotaur looks for ventures
- Cat on track for more records
- Centaurus sews up deal ahead of Jambreiro iron ore production
- Central Rand upgrade lifts production
- Chatree keeps Kingsgate on track
- Coalspur ups Vista coal production target
- Continental extends Ferreira coal production
- Copper Fox works on resource update
- Court date set for Flinders impasse
- CuDeco moves fast at Rockland
- Cuesta heads for ASX trade
- Delays force SACMH cutbacks
- Delays hit Molyhil study
- Drilling campaigns to start on Kalimantan
- Eastplats turning the Croc around
- Energio stays on resource schedule
- Environmental green light for Parker Range iron ore project
- Ferrexpo builds rail fleet
- First Vele coal leaves for port
- Fortescue production down, but plenty of upside
- Glass Earth chases another Macraes
- Glencore renews revolving credit facilities
- Globe on track with Malawi niobium study
- Gold One tackles labour, safety issues
- Golden Phoenix down but not out
- Government ownership now part of the Argentinian resources landscape
- Government, companies agree terms on Mbalam project
- GWR gets Wiluna West approval
- Herencia sets its succession plan
- Layne faces corruption penalties
- Leighton group wins Saudi bauxite job
- Lihir drags Newcrest production guidance
- Maiden production targets for Venturex’ Pilbara project
- Maiden resource for Uranex Tanzanian uranium project
- Matsa close to Norseman JV
- Metminco lifts Peru project resources
- Minco buys into Canadian properties
- More ore for Altona
- Mt Forrest iron ore project production in 2014
- Mt Gordon gives ABM a lift
- Mungana pushes mine studies
- Mutiny targets new year Gullewa gold start
- Ncondezi coal feasibility on track
- New bid emerges for Ezulwini
- New board for African Eagle
- New extraction technology may make marginal operations profitable
- New gold discovery in Azerbaijan
- New man heads Gryphon project
- New York fund comes waltzing Matilda
- Newcrest names Telfer EPC contractor
- Newmont threatens to dump big Peruvian gold mine
- Nord Gold bumps its gold reserves
- Northern Iron sets records at Norway mine
- Northern Star pushes aggressive Paulsens program
- One up-three down for Norilsk
- OZ splashes to Prominent performance
- PanAust steps up in Laos
- Panterra to begin tailings treatment
- Parties await a Mt Jukes attack plan
- Pesky taxes upset good quarter for Zimplats
- Phosphate miner finds a Russian buyer
- Plant changes cut Talvivaara production
- Polyus to sell Romanian projects
- Positive signs for Kentor’s Andash project
- Positive study boosts Metaliko
- Problems hamper Siberian mine
- Rain pours on Newcrest’s parade
- Rains dampen Mundo’s quarter
- Randgold hands over Mali food aid
- Rare profit for troubled UK coal firm
- Regency gets good news at Mambare
- Residents drop Buller coal objections
- Rio, Chinalco form Simandou team
- Royalty buy-out ahead of mine start
- SHM widens Chilean holdings
- Signature begins Ghana trial mining
- Smart shipping helps Western Areas record
- South Boulder finds more Eritrean potash
- South Gobi coal project in Mongolia for mid-year start
- Stars favourable for Aries prospect
- State cash funds Marathon project search
- Strong start for Sulawesi mine
- Study backs Universal’s coal development
- Sumatra coal study planned
- Sundance closer to West African iron ore mine
- Sylvania stays positive in time of troubles
- Taurus becomes substantial Ampella shareholder
- Tiger makes a fast start
- Top level changes at Alacer Gold
- Trouble at mill for Evolution Mining
- US listing for Nautilus
- Vale lodges $902M tax assessment bond
- Vendors want to buy back their rare earth projects
- Venturex nears feasibility completion
- Wanted: partner for 1.8bt coal project
- WDS fights contract termination
- Westgold grabs historic Fingall Deeps
- Wolf completes big tungsten off-take/loan deal
- WTR set to move on massive sands
- Yet another plan to streamline the approval process
- Zimbabwe mine revival moves closer
- Zinc producer holds the line
- ZYL picks Mbila financiers
- MINING INTELLIGENCE
- The lucky country, for now
- MINING IT
- Atlas Copco taps the app
- Gemcom releases Surpac 6.3
- Minemax software reboot built on new architecture
- MineRP promises smooth Mine2-4D transition
- Oracle improves enterprise systems
- Researcher says optimisation challenge solved
- PEOPLE
- People on the move: Wild Acre, Focus Minerals
- UnCUT
- Avoiding collision avoidance questions … and a gold road
- VIEW FROM THE WEST END
- Private lives