Avebury mine review

23 Jun 2011 12:00 AMMedia Release

MMG is nearing completion of its review of the Avebury nickel mine.

The review included technical analysis of geology, mine planning, process plant engineering and metallurgy, in addition to surface drilling work. The results of this are being analysed in combination with near-mine exploration results, economic modelling and MMG’s internal long-term commodity price forecasts.

In recent months MMG has received interest from other potential partners and operators with a stated interest in the mine. As a result, MMG will conduct a formal expression of interest process for participation in, or potential sale of, Avebury.

Meanwhile, MMG will continue to develop a comprehensive restart and operating plan for the mine and continue to model the economic benefit and strategic impact of operating it under MMG ownership.

MMG will consider all proposals to develop or acquire Avebury and believes this will increase the likelihood and accelerate the timing of the mine being re-commissioned in the medium-term.

“The expression of interest process will provide potential partners or acquirers with the results of our review and a complete understanding of the feasibility and operating requirements of Avebury,” said Mr John Lamb, General Manager of MMG’s Rosebery and Avebury mines.

“We believe this process will be a valuable further input toward restarting the mine as soon as possible.”

Avebury, located near Zeehan on Tasmania’s West Coast, was placed on care and maintenance in February 2009. Current nickel prices remain substantially below those when the mine was developed.

Following the expected conclusion in the third quarter 2011 of an expression of interest process, MMG expects to be in a position to make a more informed decision on the future of the Avebury mine.

Mr Lamb said the company understood the importance of the re-opening of the mine to the local community and would provide regular updates throughout the ongoing analysis and expression of interest process.

West and North-West Tasmania and the Mount Read volcanics remain an important area of focus and investment for MMG’s operations and exploration programs.

MMG’s Rosebery mine recently celebrated 75 years of continuous operation, the company is exploring in over 206 square kilometres of tenements in Tasmania and has commenced a program to process ore from the South Hercules deposit on Mount Hamilton through the Rosebery mine plant.