It makes sense for them to keep the mill at a 5-day week until the mine output is at an adequate level to justify full 24/7 operation. Quite when that will be is a moot point!
On the basis that they milled 129,074t in the June qtr and also maintained development at 4,500m, I estimate that stope ore made up c. 70,000t and development ore made up c. 59,000t of that throughput.
As previously posted, I expect a reduction in development from now on due to the curtailment of 1,000 contractors (given that development is undertaken by contractors rather than permanent staff). So the question then becomes, what will the new level of development ore per qtr be, and can the stope miners up their level of ore production from the 100 stopes currently being worked?
One of the issues with Shrink Stoping is the inevitable delay of ore drawdown until the stope is fully worked. As, by definition, the miners need to stand on broken ore as they work up the full 50m vertical extent of the stope. Due to natural expansion of the ore they can draw down around 30-35% during mining but the majority (remaining 65-70%) has to wait until the miners have fully worked the stope up to the crown pillar and have exited that stope.
We could discuss the ore tonnage per stope panel and the estimated time for each panel to be mined out before drawdown but it would be somewhat speculative without definitive knowledge of actual work schedules at Co-O. However, it is reasonable to assume that part of the restriction on stope ore production may well have been this natural delay in drawdown which may take a few quarters to normalise.
Another issue is the level of skill required to mine narrow veins efficiently by shrink mining. It does require years of experience and with so many additional stopes on multiple levels and veins it is reasonable to assume that their permanent experienced miners are overstretched to both mine and train new air-leg operators.
Only time will tell if stope output can be raised consistently to target levels. They have been through these same difficulties with the phase 1 & 2 expansions in the past and did reach their target level of 25koz/qtr for 6 qtrs before embarking on this latest expansion. So my expectation is that they will eventually sort it all out and reach new higher production levels - but quite how long it will all take is debatable.
CPDLC
MML Price at posting:
$1.42 Sentiment: Buy Disclosure: Held
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