Delays slow Compass Kate Hayc$ck Friday, 20 April 2007
COMPASS Resources has handed down its results for the quarter ended March 31, 2007, with the company reporting on delays in commissioning at its Browns oxide mining operations in the Northern Territory due to power supply problems, and a slower-than-expected exploration program during the wet season.
Compass Resources' Browns polymetallic deposit, Northern Territory Compass hopes to produce lead, copper, cobalt and nickel via a combination of technologies.
The commissioning of the company's oxide mining processing plant was originally targeted for midway through this year but the supply of power to the site by Northern Territory Power and Water has been pushed out until September or October.
The Sydney-based company had reported previously this month that it had looked at diesel generation but the costs were "prohibitive" and so the commissioning date for the plant has been pushed back to October to reflect the delay in power.
Otherwise, Compass said the wet season had limited impact on the oxide operation and other commissioning and construction, including refurbishment of the grinding mill, was "progressing well".
Compass also said it had prepared ahead for the wet at the site, with a focus on site drainage and pouring concrete foundations ahead of the wet season allowing construction to continue "albeit with some interruption in the most extreme periods of wet weather".
China's Hunan Nonferrous Metals is funding the development of the Browns project in return for a 50% interest.
The oxide component of Browns is expected to produce 10,000 tonnes per annum of copper cathode, 2.2 million pounds of cobalt and 700t nickel a year.
The wet season did, however, have an adverse affect on Compass' further exploration program in the NT, with only one drill rig operational during the quarter, as wet ground conditions made rig movement "almost impossible".
The company said the "lull allowed all 2006 exploration data to be compiled and analysed with detailed planning of the 2007 program undertaken" with results to date "encouraging".
Further drilling at the Browns east deposit is planned to bring the resource to a confidence level to allow mine planning to go ahead, Compass said, with further drilling also planned at Browns Deep.
Compass also has other exploration prospects prospective for uranium in the NT, as well as further exploration holdings across other commodities in New South Wales and overseas in Peru.
Shares in the company fell 9c on the back of the quarterly announcement yesterday to $5.35 and were down another 17c (3%) to $5.18 in morning trading.
CMR Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
