Following a disruption to mining activities,Aus Tin Miningwill review itsGranvilleoperation and its ongoing strategy. The disruption comes during a key period for the mining operations.
Mining at theGranvilleproject initially begin in February with the first mining block grading around 2.1% tin. Since then,Aus Tin Mininghave switched from contractor mining to owner mining to reduce costs at the project. However, now that Aus Tin own and operate all the on-site equipment, this means that they are now responsible for maintenance.
Unfortunately, issues with the transmission on the mine truck have necessitated repairs, meaning that ore can no longer be moved to the crushing and processing plant. This follows the recent failure of the mine excavator; while a smaller excavator was acquired to continue operations in the interim, the loss of both pieces of key equipment means that the company can no longer continue mining operations at normal throughput.
However,Aus Tin Miningare taking the break from mining activities as an opportunity to critically review the mining operations. According to CEO Peter Williams, “The Company has invested heavily inGranvillebut is yet to achieve selected KPIs [Key Performance Indicators], so changes are required and the strategic review is intended to identify these.”
The break from mining activities comes at a time when the operations have been improving. The highest-grade ore sampled to date is currently ready for extraction, and pre-concentrate production at the processing plant has been steadily improving. However, the target concentrate production has not yet been achieved.
As a result of the hiatus atGranville, delays have been passed ontoAus Tin Mining’s other project,Taronga. It was initially anticipated thatTarongaStage 1 development would be funded by the cashflow fromGranville, but further work atTarongahas now been shelved. However,Aus Tin Miningare considering an interim program that will progress the project towards a Definitive Feasibility Study but will not be as capital-intensive.
Part of this work will aim to better constrain the resource grade in selected resource blocks using reverse circulation (RC) drilling. Around 100 RC drill holes, as well as two diamond drill holes are planned. Following this work, the company is hopeful that the Mineral Resource estimate can be updated and the upside of by-product recovery (notably copper and silver) can be evaluated.
Our view:Although maintenance of key equipment at theGranvilleoperation has come at a bad time for the company, the scheduled strategic review and interim programme atTarongashould helpAus Tin Miningto progress both projects much more rapidly once the cashflow fromGranvilleresumes. On top of this, the potential upside from by-product credits at theTarongaproject should help to reduce costs, particularly at a time when the silver price is doing well – hitting a one-year high during the last few months.
