PERTH, Australia, Jan. 22, 2013 /CNW/ - Mirabela Nickel Limited
("Mirabela" or the "Company") (ASX: MBN, TSX: MNB) is pleased to
announce its unaudited fourth quarter results for the period ended 31
December 2012.
HIGHLIGHTS
-
Full year production within guidance at 19,253 tonnes of nickel in
concentrate
-
Production for the quarter of 5,291 tonnes of nickel in concentrate (Q3
2012: 5,441 tonnes)
-
Sales for the quarter of 5,044 tonnes of nickel in concentrate (Q3 2012:
5,381 tonnes)
-
Unit cash costs of US$4.91/lb for the quarter (Q3 2012: US$5.38/lb)
-
Average mined nickel grade of 0.55% for the quarter (Q3 2012: 0.52%) and
total mining material movement of 8.8 million tonnes (Q3 2012: 8.9
million tonnes)
-
Processing plant throughput of 1.7 million tonnes (Q3 2012: 1.8 million
tonnes)
-
Average processing plant nickel recovery of 59% (Q3 2012: 59%) and
average nickel feed grade of 0.53% (Q3 2012: 0.52%) for the quarter
-
Cash on hand and on deposit of US$143 million at quarter end (Q3 2012:
US$160 million)
OPERATIONS
Safety
Mirabela's strong safety performance continued with no lost time
injuries during the quarter. The Company's safety performance remains
strong with the 12 month moving average Lost Time Injury Frequency Rate
closing the year at 0.69, improving from 0.82 at the end of Q3. The all
injury frequency rate continued to fall and ended the year at 4.82 (Q3:
5.71). Mirabela is continuing to target further improvements to this
strong safety record through ongoing safety training and safety
improvement programmes.
Production Statistics
|
|
|
|
|
|
|
|
Three months ended 31 Dec 2012
|
Three months
ended 30 Sep 2012
|
% change favourable/ (unfavourable)
|
Year to Date
2012
|
Mining
|
|
|
|
|
|
Total Material Mined
|
Tonnes
|
8,823,363
|
8,947,179
|
(1)
|
38,531,233
|
Ore Mined
|
Tonnes
|
1,764,245
|
1,748,416
|
1
|
6,790,642
|
Nickel Grade
|
%
|
0.55
|
0.52
|
6
|
0.50
|
|
|
|
|
|
|
Processing
|
|
|
|
|
|
Total Ore Processed
|
Tonnes
|
1,691,798
|
1,798,040
|
(6)
|
6,472,895
|
Nickel Grade
|
%
|
0.53
|
0.52
|
2
|
0.51
|
Copper Grade
|
%
|
0.13
|
0.13
|
-
|
0.13
|
Cobalt Grade
|
%
|
0.02
|
0.01
|
100
|
0.01
|
Nickel Recovery
|
%
|
59
|
59
|
-
|
58
|
Copper Recovery
|
%
|
70
|
75
|
(7)
|
72
|
Cobalt Recovery
|
%
|
34
|
36
|
(6)
|
35
|
|
|
|
|
|
|
Production
|
|
|
|
|
|
Nickel in Concentrate
|
DMT
|
5,291
|
5,441
|
(3)
|
19,253
|
Copper in Concentrate
|
DMT
|
1,507
|
1,704
|
(12)
|
5,858
|
Cobalt in Concentrate
|
DMT
|
91
|
96
|
(5)
|
335
|
|
|
|
|
|
|
Sales
|
|
|
|
|
|
Nickel in Concentrate (1) |
DMT
|
5,044
|
5,381
|
(6)
|
19,367
|
Copper in Concentrate (1) |
DMT
|
1,454
|
1,780
|
(18)
|
6,253
|
Cobalt in Concentrate (1) |
DMT
|
88
|
92
|
(4)
|
344
|
|
|
|
|
|
|
(1) Includes sales volume adjustments upon finalisation of assays.
Mining
Total material movement for the quarter was 8.8 million tonnes of
material moved for 1.8 million tonnes of ore. The material movement was
at the low end of expectations due to restricted loader and excavator
availabilities. The mine schedule was running approximately one month
behind schedule at the end of the year. Mined grades improved from
0.52% during the third quarter to an average of 0.55% during the fourth
quarter, in line with expectations.
Mining activity for the quarter continued to be predominantly in the
Central zone, delivering 81% of the ore mined. The remaining ore was
sourced from the South and North pit zones. Access to the better
quality ore in the South pit has been restricted due to geotechnical
instability in the temporary pit wall between the higher central zone
and lower south zone. Remedial works are underway. Reconciliation
between mined grades and the new resource model was on expectations for
the quarter and the mine, plant and maintenance rolling six week
schedule and plans remain fully integrated into the operational
production cycle.
Loader and Excavator availabilities continue to remain the key mining
focus area for operational improvement. Two of the 120 tonne
excavators were shut down for an extended period to assist in clearing
a backlog of maintenance works on the machines. The third excavator is
undergoing an extended shutdown during January 2013. Steady
improvements in availability have been achieved post shutdown.
Additional contractor excavator capability has been secured to assist
in increasing material movement in the short term. The drilling and
truck mobile fleets performed at expectations.
Processing
During the quarter 1.7 million tonnes of ore was milled, at an average
head grade of 0.53% nickel and achieving an average recovery of 59%.
The plant throughput was marginally lower than target due to the
performance of the crushing circuit. The first crushing line is
scheduled for major maintenance during the first half of 2013 with the
new second crushing line performance improving during the quarter.
Recovery performance remains in line with the grade recovery algorithm
and the quality of ore feed to the plant. The de-sliming plant was
fully operational for most of the fourth quarter with a minor shut down
due to mechanical adjustments slightly impacting on the recovery
performance. De-sliming continues to stabilise operations, recoveries
and product qualities, as well as reducing reagent dosage rates and
consequently costs.
Recovery optimisation test work for the quarter included an industrial
test of new reagents in the plant. Early results are indicating
improved recoveries and concentrate quality. The new reagents regime
has been introduced into the plant and optimization of the process is
continuing. MgO levels in the ore feed continue to be the most
significant limiting factor on processing plant recoveries. Further
test work is being undertaken in the laboratory and pilot plant as part
of the ongoing recovery improvement program.
During the quarter Mirabela produced 5,291 tonnes of contained nickel in
concentrate, 1,507 tonnes of contained copper in concentrate, and 91
tonnes of contained cobalt in concentrate. 5,044 tonnes of nickel in
concentrate was sold to Mirabela's off-take partners, Votorantim Metais
Niquel S.A. and Norilsk Nickel. One export shipment to Norilsk Nickel
was completed during the quarter with steady deliveries to Votorantim
continuing.
Sales for 2012 were split 56% to Votorantim and 44% to Norilsk. Both
customers work cooperatively with Mirabela to decide on the
prioritisation of concentrate deliveries. With the agreed focus on
Votorantim deliveries over the last three years it is expected that the
Norilsk Nickel off-take will extend beyond the end of 2014. The current
Votorantim off-take will finish at the end of 2014.
Exploration & Studies
Exploration activity for the quarter was focused on tenement maintenance
only.
The Company has appointed expert consultants, Optiro and Lycopodium, to
assist with its operational optimisation and expansion studies. The
Company's current priority is continued optimisation and low capital,
incremental expansion. As such, the 9Mt pre-feasibility study has been
re-prioritised behind this work with the pre-feasibility study now
expected to be completed late in 2013.
Unit Cash Costs
|
|
|
|
|
|
|
|
Three months ended 31 Dec 2012
|
Three months
ended 30 Sep 2012
|
% change favourable/ (unfavourable)
|
Year to Date
2012
|
Payable Nickel Production(1) |
lbs
|
10,381,534
|
10,675,850
|
(3)
|
37,777,448
|
|
|
|
|
|
|
Production Costs
|
|
|
|
|
|
Mining Cost
|
US$/lb
|
2.41
|
2.90
|
17
|
3.00
|
Processing Costs
|
US$/lb
|
1.37
|
1.34
|
(2)
|
1.61
|
Administration Cost
|
US$/lb
|
0.48
|
0.43
|
(12)
|
0.53
|
Subtotal
|
US$/lb
|
4.26
|
4.67
|
9
|
5.14
|
|
|
|
|
|
|
Selling Costs
|
|
|
|
|
|
Transport/Shipping Cost
|
US$/lb
|
0.14
|
0.20
|
30
|
0.19
|
By-Product Credit(2) |
US$/lb
|
(0.91)
|
(1.17)
|
(22)
|
(1.17)
|
Smelter Charges
|
US$/lb
|
1.42
|
1.68
|
15
|
1.66
|
Subtotal
|
US$/lb
|
0.65
|
0.71
|
8
|
0.68
|
|
|
|
|
|
|
C1 Unit Cash Cost
|
US$/lb
|
4.91
|
5.38
|
9
|
5.82
|
Unit Royalty Cost
|
US$/lb
|
0.37
|
0.35
|
(6)
|
0.39
|
Realised Nickel Price(2) |
US$/lb
|
7.30
|
6.54
|
12
|
7.46
|
Realised Copper Price(2) |
US$/lb
|
3.27
|
3.27
|
-
|
3.43
|
Realised Cobalt Price(2) |
US$/lb
|
11.00
|
12.00
|
(8)
|
12.00
|
Average US$/Real Exchange Rate
|
|
2.06
|
2.03
|
1
|
1.95
|
(1) Average payability of 89% (2) Including prior period QP adjustments
|
The C1 unit cash cost improved for the third consecutive quarter,
reducing from US$5.38/lb during Q3 to US$4.91/lb during Q4. The
improvement from the third quarter was driven by: favourable tax credit
adjustment (US$0.13/lb); write-back of stores provision created earlier
in the year (US$0.09/lb); lower than normal mining waste strip-ratio
for November and December (US$0.12/lb); continued cost reduction and
optimisation initiatives; the BRL softening slightly against the USD
(Q4 2012: 2.06 versus Q3 2012: 2.03); and lower sales, offset by
marginally lower nickel production (down 3% from Q3).
The fourth quarter cash cost included a favourable adjustment relating
to tax credits not previously claimed. As part of its optimisation
program, the Company has been working with independent tax advisors to
determine the claimability of certain Brazilian input tax credits on
its production costs. The work was finalised during the fourth quarter
and adjusted accordingly.
CORPORATE
Cash and Debt
As at 31 December 2012, Mirabela held balances of cash on hand and on
deposit of US$143.01 million. The decrease in cash on hand from 30
September 2012 (US$160.19 million) was driven by: an interest repayment
of US$17.50 million on the senior unsecured notes; finalisation of
nickel sales that occurred between February 2012 and July 2012 at an
average finalisation price of US$7.69/lb compared to an average
provisional price of US$8.13/lb (US$8.00 million); and capital,
exploration and study costs of US$7.01 million. This cash outflow was
offset by positive cash flow from operations.
Share Capital
As at 31 December 2012 the Company's issued share capital consisted of
876,582,736 ordinary shares. A balance of 4,150,000 unlisted options
and 2,144,857 performance rights were outstanding. No options were
exercised during the quarter.
2013 GUIDANCE (Please refer to the Disclaimer - Forward Looking Information below)
Mirabela is targeting production of 22,000 to 24,000 tonnes of nickel in
concentrate for 2013. Production is expected to be stronger in the
second half of the year due to improved access to higher quality South
Pit ore during the second half of the year and scheduled maintenance
work on the primary crusher during the first half of the year.
Unit cash costs are expected to average between US$5.00/lb and
US$6.00/lb for the year. The spread in the average unit cash cost
guidance is due to the large number of factors impacting on unit cash
cost outcomes, including nickel price, copper price and the Brazilian
Real / US dollar exchange rate. The Company will provide more specific
unit cash cost guidance during the course of the year if possible.
Capital expenditure, exploration and study costs for 2013 is forecast at
between US$40 million and US$50 million. Major items include: mobile
equipment rebuilds; tailing storage facility wall lift; general
sustaining capital; and capitalised mining costs. Exploration tenement
holding costs and operational optimisation study costs will be charged
to Other Expenses in the Statement of Comprehensive Income as incurred.
The Company is not anticipating material expenditure on growth
activities for 2013.
Disclaimer - Forward Looking Information
Certain information in this document, including all statements that are
not historical facts, constitutes forward-looking information within
the meaning of applicable Canadian & Australian securities laws. Such
forward-looking information includes, but is not limited to,
information which reflects management's expectations regarding
Mirabela's future growth, results of operations (including, without
limitation, future production and capital expenditures), performance
(both operational and financial) and business prospects (including the
timing and development of new deposits and the success of exploration
activities) and opportunities. Often, this information includes words
such as "plans", "expects" or "does not expect", "is expected",
"budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates" or "does not anticipate" or "believes" or variations of
such words and phrases or statements that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur or
be achieved.
In making and providing the forward-looking information included in this
document, the Company has made numerous assumptions. These assumptions
include among other things: (i) assumptions about the price of nickel
and other base metals; (ii) assumptions about operating costs and
expenditures; (iii) assumptions about future production and recovery;
(iv) that the supply and demand for nickel develops as expected;
(v) that there is no unanticipated fluctuation in interest rates and
foreign exchange rates; and (vi) that there is no material
deterioration in general economic conditions. Although management
believes that the assumptions made and the expectations represented by
such information are reasonable, there can be no assurance that the
forward-looking information will prove to be accurate. By its nature,
forward-looking information is based on assumptions and involves known
and unknown risks, uncertainties and other factors that may cause the
Company's actual results, performance or achievements, or results, to
be materially different from future results, performance or
achievements expressed or implied by such forward-looking information.
Such risks, uncertainties and other factors include among other things
the following: (i) decreases in the price of nickel and copper;
(ii) the risk that the Company will continue to have negative operating
cash flow; (iii) the risk that additional financing will not be
obtained as and when required; (iv) material increases in operating
costs; (v) adverse fluctuations in foreign exchange rates; (vi) the
risk that concentrate produced will not meet certain minimum
specifications; (vii) production estimates may not be accurate; (viii)
environmental risks and changes in environmental legislation; (ix) and
failure to comply with restrictions and covenants under the Unsecured
Senior Notes.
The Company's MD&A and the Annual Information Form contain information
on risks, uncertainties and other factors relating to the
forward-looking information. Although the Company has attempted to
identify factors that would cause actual actions, events or results to
differ materially from those disclosed in the forward-looking
information, there may be other factors that cause actual results,
performances, achievements or events not to be anticipated, estimated
or intended. Also, many of the factors are beyond the Company's
control. Accordingly, readers should not place undue reliance on
forward-looking information. All forward-looking information disclosed
in this document is qualified by this cautionary statement.
SOURCE: Mirabela Nickel Ltd.