Minmetals Resources Limited (HKEx Stock Code 1208) (“MMR”) today announced its First Quarter Production Report for the three months ended 31 March 2012. The report covers the Company’s operations in Australia, Laos and the Democratic Republic of Congo (DRC).
- As previously announced, a tragic incident occurred on 28 February 2012 involving a contractor and compactor resulting in a fatality at our Sepon operation in Laos.
- Successful completion of the acquisition of Anvil Mining Limited with over 98% of shares tendered into the Company’s offer and the remaining shares acquired through compulsory acquisition.
- Production continues to benefit from the successful commissioning of Sepon’s expanded copper plant with cathode production nearing nameplate capacity in the first quarter 2012.
- Production at Kinsevere for the month of March was impacted by sudden and unexpected network-wide power supply disruptions impacting production ramp up.
- Favourable mining conditions, excellent plant performance and high throughput rates contributed to strong operating results at Century.
- Gold production at Sepon was 92% higher than the previous quarter due to the mining of high grade ore, good plant performance and excellent recoveries.
- Annual production and C1 cost guidance maintained at all sites.
Chief Executive Officer Mr Andrew Michelmore noted that the Company was saddened by the fatality at Sepon.
“Any incident is one too many and the Board, management and I commit this Company to doing better.”
Since completion of the acquisition of Anvil Mining Limited, sudden and unexpected network-wide power supply disruptions have occurred in the DRC, impacting production ramp up. These disruptions have resulted in the rescheduling of mining operations and a reduction in ore mining as there has been inadequate power to ramp up production to the designed nameplate capacity of 60,000 tonnes of copper cathode per annum.
A short-term solution is being progressed through the installation of temporary diesel generators on site. These are expected to be delivered in June and will provide a stable back-up power source during the second half of 2012. In addition, the Company has been successful in negotiating with Société nationale d’électricité, (SNEL, the national electricity company of the DRC) to acquire additional off-peak power to supplement current grid supplies from the Zambian power authority (Zesco). Production and operating costs will be impacted by the issues.
“We expect to produce 28,000 - 32,000 tonnes of copper cathode from March to December 2012, with a view to ramp up to nameplate capacity by the end of this year,” said Mr Michelmore.
The Company also reported strong zinc and lead production at its Century mine, and strong gold production at its Sepon.
“We saw an 18% increase in zinc production and 6% increase in lead production at Century compared to the first quarter 2011 which was impacted by severe wet weather,” said Mr Michelmore.
“Gold production at Sepon totalled 30,456 ounces and was 92% higher than the previous quarter due to the mining of high grade ore, good plant performance and excellent recoveries,” he said.
Annual production guidance of 60,000-65,000 ounces of gold is unchanged as ore availability is expected to decline in the second half of 2012.
The Sepon operation also continued to benefit from the successful commissioning of the expanded copper plant with cathode production nearing nameplate capacity in the first quarter 2012.
The Company continued to progress its Dugald River and Izok Corridor development projects.
“During the quarter, we submitted our Environmental Management Plan for Dugald River to the Queensland Department of Environment and Resource Management. We will work closely with the department with the objective of reaching a set of agreed terms in the second quarter 2012,” he said.
“In addition, we have commenced our project feasibility study for the Izok Corridor project and have formally initiated the permitting process with relevant regional authorities,” he said.
For further information, please download the First Quarter 2012 Production Report or visit www.minmetalsresources.com or www.mmg.com.
About Minmetals Resources Limited
Minmetals Resources Limited (MMR) is a mid-tier global resources company that mines, explores and develops base metal projects in Australia, and around the world. The company is headquartered in Melbourne, Australia and listed on the Hong Kong Stock Exchange under Stock Code: 1208. MMR owns the MMG group of companies and their operations after acquiring them on 31 December 2010.
MMR is uniquely positioned with an experienced international management team, public ownership on the Hong Kong stock exchange (28.28%) and support of its ultimate controlling shareholder China Minmetals Corporation (71.72%).
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