Monday, May 03, 2004 A NEW openpit nickel mine near its existing Silver Swan underground operation in Western Australia is expected to yield 2500 tonnes per annum of nickel in concentrate for MPI Mines from July this year.
The company said pre-stripping of the pit and other site work continued while engineering and procurement connected to plant modifications and related infrastructure changes were on schedule and within budget.
A feasibility study investigating expansion of the original Black Swan openpit production rate, to yield 5000tpa of nickel in concentrates, was in progress at the end of the March quarter.
The new mine will supplement output from Silver Swan, which produced 2728t of nickel in the three months to the end of March.
An average cash LME nickel price of US$6.64/lb received during the period generated strong margins on nickel sales, MPI said.
However, higher treatment charges pushed the company's total unit cost (before vendor royalties) of production up 26% on the previous three months to $US5.71/lb.
MPI said the higher costs were also due to increased mine development work during the quarter, while the increased smelting, refining and royalty costs were "directly related to the higher received nickel price".
Apart from Black Swan, MPI is completing a pre-feasibility study on the Wedgetail underground mine at Honeymoon Well in WA, which it believes can produce up to 10,000tpa of nickel in concentrate. Further resource definition drilling is in progress and MPI expects this to support work on a final feasibility study in the third quarter of 2004.
Meantime the company reported higher production costs at both its Australian gold operations.
At Stawell in Victoria, now 100% owned, an unscheduled ball mill shutdown which cost four days production, dented output to 23,820oz - compared with 26,278oz for the previous three months - and bumped cash costs to $508/oz from $406/oz in the December quarter. MPI's total production cost at Stawell leapt to $642/oz from $483/oz previously.
MPI is upgrading both the plant gravity circuit and the mining equipment fleet at Stawell.
At the 50%-owned Coolgardie operations in WA, production from the Empress underground mine and Lindsay's and Greenfields opencuts totalled 21,508oz compared with 20,448oz previously.
Cash costs hit $463/oz, up from $429/oz in the December quarter, but total production costs eased back to $602/oz from $621/oz previously.
Tertiary crusher repair costs and high stripping volumes in initial mining of the Greenfields pit adversely impacted cash casts at Coolgardie.
Shares in MPI were up 2c to $1.47 in morning trade.
MPI Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
