Mirabela Nickel Limited - Quarterly Activity Report for the Period Ended 31 December 2012

Mirabela Nickel Limited - Quarterly Activity Report for the Period Ended 31 
December 2012 
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       Three       % change
                      months      months     favourable/   Year to Date
                      ended        ended    (unfavourable)     2012
                    31 Dec 2012 30 Sep 2012

Mining                                                                 

Total        Tonnes   8,823,363   8,947,179            (1)   38,531,233
Material
Mined

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    Tonnes   1,691,798   1,798,040            (6)    6,472,895
Processed

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            %          59          59              -           58
Recovery

Copper            %          70          75            (7)           72
Recovery

Cobalt            %          34          36            (6)           35
Recovery
                                                                       

Production                                                             

Nickel in       DMT       5,291       5,441            (3)       19,253
Concentrate

Copper in       DMT       1,507       1,704           (12)        5,858
Concentrate

Cobalt in       DMT          91          96            (5)          335
Concentrate
                                                                       

Sales                                                                  

Nickel in       DMT       5,044       5,381            (6)       19,367
Concentrate 
((1))

Copper in       DMT       1,454       1,780           (18)        6,253
Concentrate 
((1))

Cobalt in       DMT          88          92            (4)          344
Concentrate 
((1))
                                                                       

((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      Three      % change
                            months      months   favourable/     Year to
                             ended      ended   (unfavourable)     Date
                             31 Dec     30 Sep                     2012
                              2012       2012

Payable Nickel        lbs 10,381,534 10,675,850            (3) 37,777,448
Production((1))
                                                                         

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     US$/lb       0.48       0.43           (12)       0.53
Cost

Subtotal           US$/lb       4.26       4.67              9       5.14
                                                                         

Selling Costs                                                            

Transport/Shipping US$/lb       0.14       0.20             30       0.19
Cost

By-Product Credit( US$/lb     (0.91)     (1.17)           (22)     (1.17)
(2))

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    US$/lb       7.30       6.54             12       7.46
Price((2))

Realised Copper    US$/lb       3.27       3.27              -       3.43
Price((2))

Realised Cobalt    US$/lb      11.00      12.00            (8)      12.00
Price((2))

Average US$/Real                2.06       2.03              1       1.95
Exchange Rate


((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 beachieved.

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 aboutfuture 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.



CONTACT DETAILS

Chris Els Chief Financial Officer & Company Secretary Telephone: +61 439 930 
333 shanik@mirabela.com.au

Ian Purdy Chief Executive Officer & Managing Director Telephone: +61 410 491 
908 shanik@mirabela.com.au

SOURCE: Mirabela Nickel Ltd.

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CO: Mirabela Nickel Ltd.
NI: MNG FIELD 

-0- Jan/21/2013 23:06 GMT


 
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