Source: www.smh.com.au/news/business
Tanami shares dive over WA delays
October 23, 2006 - 2:19PM
Tanami Gold shares tumbled more than 20 per cent after mining operations were suspended at its troubled Coyote project in Western Australia following delays in bringing the treatment plant on stream.
Tanami said it suspended open pit mining in order to minimise costs until the treatment plant is fully operational.
"Due to these delays and in order to minimise mining costs until the treatment plant is fully operational and gold production increases, the open pit mining operations have been suspended," Tanami said.
"Consequently, forecast gold production has been delayed.
"Suspension of mining operations will not have any impact on the commissioning of the plant and treatment of ore during the remainder of the December 2006 quarter, as the company has over 96,000 tonnes of ore on stockpile."
Tanami executive chairman Denis Waddell said the plant should be fully operational "within a few weeks".
"There's just been a frustrating period of getting people and equipment," Mr Waddell said.
"I'm sick of making excuses ... but there is a huge demand for people and we are competing in the same pool as the big boys like BHP and Rio."
Tanami has also indicated it will require additional funds to complete the commissioning.
Tanami has been forced back to the market on two separate occasions during the year to raise additional funds after an initial $20 million raising in March.
In July, Tanami raised $15 million to cover a shortfall before raising a further $10 million two months later.
Nestled on the Northern Territory border in the remote Tanami desert, the project has been dogged with delays since last year when it was forced to scr ap its original mine plan due to rising costs.
Tanami is looking to produce about 70,000 ounces per annum from an open pit operation at Coyote, with an underground operation mooted for the future.
The underground operation is expected to increase the production profile to 100,000 ounces per annum.
Tanami shares lost five cents or almost 24 per cent to 16 cents.
© 2006 AAP
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