Processing takes a rest while Valence seeks cash for efficiency...

Processing takes a rest while Valence seeks cash for efficiency improvements

http://www.adelaidenow.com.au/busin...k=b4b74006b6d718aef6bf16932174c7aa-1449811594

December 8, 2015 11:20am
LUKE GRIFFITHSThe Advertiser


Valence Industries’ first graphite export at its Uley site. The company has currently ceased processing while it raises capital.

THE suspension of on-site processing will save a South Australian company almost $300,000 a month as it hones in on efficiency improvements.

Valence Industries last week informed the market of its “extremely difficult decision” to indefinitely cease graphite production and processing at its Uley mine near Port Lincoln. It will instead focus its efforts on raising much needed capital.

A trading halt on company shares — currently valued at 11.5 cents each, down from 49.1 cents at the same time last year — will remain until the capital raising is completed early in the new year.

Negotiations with financiers will be jeopardized if the company comes out of voluntary suspension prior to this time, Valence said in a statement.

At its recent annual general meeting, Valence chairman Graham Spurling blamed operational events, a lack of professional management techniques, inadequate scoping of work, poor selection of the initial group of consultants and the failure to recognise the deficiencies early enough for the “loss of value”.

Last week, recently installed managing director Robert Mencel said suspending processing was not an easy decision, but existing production was uneconomical and plant upgrades had to be made.
"The immediate focus is on rebuilding the capital of the company and to re-establish it as a quality graphite producer,” he said.

Over the next 12 months, more than $40 million is required to improve the efficiency of the Uley processing plant, pay creditors and settle debt. Ultimately, it is hoped 21,000 tonnes of graphite will be produced at the site.

Another SA miner with an interest in graphite took a much more positive tone at its recent AGM.

Archer Exploration chair Greg English highlighted the potential of the company’s Eyre Peninsula graphite project, which had “defined Australia’s largest graphite JORC resource”.

It is thought that ultra-pure, agribusiness, and flake graphite products can be produced from this resource.

“Over the past two years, Archer has undertaken a rigorous program of metallurgical testing, environmental assessment and community engagement on the Eyre Peninsula,” Mr English said.


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