Mirabela Nickel Limited - Quarterly Activity Report for the Period Ended 30
PERTH, Australia, July 23, 2013 /CNW/ - Mirabela Nickel Limited ("Mirabela" or
the "Company") (ASX: MBN, TSX: MNB) is pleased to announce its unaudited
second quarter results for the period ended 30 June 2013.
-- Production for the quarter of 4,080 tonnes of nickel in
concentrate (Q1 2013: 4,151 tonnes)
-- Sales for the quarter of 4,168 tonnes of nickel in concentrate
(Q1 2013: 3,907 tonnes)
-- Unit cash costs of US$5.84/lb for the quarter (Q1 2013:
-- First half production of 8,231 tonnes of nickel in concentrate
at an average unit cash cost of US$5.48/lb
-- Average mined nickel grade of 0.50% for the quarter (Q1 2013:
0.48%) and total mining material movement of 10.4 million
tonnes (Q1 2013: 8.5 million tonnes)
-- Processing plant throughput of 1.7 million tonnes (Q1 2013: 1.6
-- Average processing plant nickel recovery of 51% (Q1 2013: 56%)
and average nickel feed grade of 0.47% (Q1 2013: 0.47%) for the
-- Cash on hand and on deposit of US$108 million at quarter end
(Q1 2013: US$141 million)
Mirabela's second quarter saw the open pit material movement return to
expected levels with the successful reconfiguration of the excavator fleet.
Remediation works on the primary crusher and the remediation of the
geotechnical fault zone, between the central zone and south zone of the open
pit, progressed to plan during the quarter. Nickel production continued to be
restricted by ore quality limitations.
The Company provided updated guidance for 2013 with production expected to be
17,000 to 18,500 tonnes of nickel in concentrate; capital expenditure,
exploration and study costs at between US$35 million and US$45 million; and
unit cash costs expected to average between US$5.00/lb and US$6.00/lb for the
Mirabela's strong safety performance continued with no lost time injuries
during the quarter. The Company's 12 month moving average Lost Time Injury
Frequency Rate closed the quarter at 1.12. Mirabela continues to target
further improvements to this strong safety record through ongoing safety
training and safety improvement programmes. The Company completed a
comprehensive safety review and third party audit with DuPont during the
quarter. The audit has highlighted areas for further improvement which will be
implemented with the assistance of DuPont.
Three Three months % change
months Year to Date
31 Mar 2013 (unfavourable)
30 Jun 2013
Material Tonnes 10,387,040 8,498,282 22 18,885,322
Ore Mined Tonnes 1,661,192 1,164,561 43 2,825,753
Nickel % 0.50 0.48 4 0.49
Total Ore Tonnes 1,695,559 1,579,963 7 3,275,522
Nickel % 0.47 0.47 - 0.47
Copper % 0.10 0.10 - 0.10
Cobalt % 0.02 0.02 - 0.02
Nickel % 51 56 (9) 53
Copper % 65 71 (8) 68
Cobalt % 27 29 (7) 28
Nickel in DMT 4,080 4,151 (2) 8,231
Copper in DMT 1,125 1,169 (4) 2,294
Cobalt in DMT 71 72 (1) 143
Concentrate DMT 4,168 3,907 7 8,075
Concentrate DMT 1,143 1,119 2 2,262
Concentrate DMT 71 69 3 140
((1) )Includes sales volume adjustments upon finalisation of assays.
Total material movement for the quarter was 10.4 million tonnes of material
moved for 1.7 million tonnes of ore. Material movement was in line with
expectations with the result driven by improved excavator performance
following the outsourcing of excavator services to U&M during April 2013. The
higher excavator availability and volumes were achieved using U&M's two
Hitachi 2600 excavators which were fully commissioned during the quarter. Both
machines have performed above expectations in terms of tonnes mined per hour
and total material movement, and realised additional benefits such as savings
on ground engaging tools, fuel and lubrication. The improved excavator
performance allowed the Company to park-up its underperforming O&K excavator
fleet during the quarter. The removal of the excavators from the open pit
has resulted in less congestion and larger mining areas.
Mine grades of 0.50% were marginally higher than the previous quarter although
ore quality remained below expectations due to elevated levels of MgO, (over
30%), continuing in the central zone ore. Remedial works to remove the
geotechnical fault between the South and Central zones advanced as planned
during the quarter with access to the South pit re-established for the second
half of the year.
In late June 2013, a disruption to the supply of nitrate in Brazil restricted
the supply of explosives to the Company, severely limiting material movement
and ore production in the open pit. Restricted mining operations have
continued during July with a return to normal nitrate deliveries expected
towards the end of July.
During the quarter 1.7 million tonnes of ore was milled, at an average head
grade of 0.47% nickel and achieving an average recovery of 51%. Ore quality
limitations were the most significant limitation on nickel production levels.
Recovery performance remained in line or above the expected grade vs. recovery
algorithm for processed ore quality due to continued improvements in the
process plant setup and the reagent regime.
The marginally lower than target processing plant throughput was primarily
driven by ongoing remediation work on the primary crusher. The Company
continues to work with Metso Brazil and Lycopodium to improve the performance
of its gyratory crusher and resolve stress problems in the civil footings.
During the quarter the primary crusher was stood down for 72 hours to inspect
and repair the pinion end float. Metso supervised the repair of the pinion
which has now been rectified and reinstalled. An inspection of the crusher
casings was also undertaken, revealing no cracks but with some remediation
work required to remove potential stress raisers. Inspection of the civil
footings revealed that some redressing of the concrete footings would be
required and that this work could be done insitu with no existing concrete
required to be removed. The remaining remediation work on the primary crusher
is estimated at 30 days and is planned to be performed via two shutdowns of 15
days each during the third and fourth quarters of 2013. The Company plans to
optimise throughput during this time by maintaining sufficient crushed ore
stockpile prior to the shutdowns and maximising the throughput of the second
During the quarter Mirabela produced 4,080 tonnes of contained nickel in
concentrate, 1,125 tonnes of contained copper in concentrate, and 71 tonnes of
contained cobalt in concentrate. 4,168 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.
Exploration & Studies
Exploration activity for the quarter continued to focus on tenement
maintenance only. Growth activities remain deferred in order to preserve cash.
Unit Cash Costs
Three Three % change Year to
months months Date
ended ended 2013
30 Jun 13 31 Mar 13
Payable Nickel Lbs 8,005,416 8,144,726 (2) 16,150,142
Mining Cost US$/lb 3.44 2.50 (38) 2,98
Processing Costs US$/lb 1.69 1.69 - 1.69
Administration US$/lb 0.65 0.57 (14) 0.61
Subtotal US$/lb 5.78 4.76 (21) 5.28
Transport/Shipping US$/lb 0.16 0.13 (23) 0.15
By-Product Credit( US$/lb (1.42) (1.23) 15 (1.33)
Smelter Charges US$/lb 1.32 1.44 8 1.38
Subtotal US$/lb 0.06 0.34 82 0.20
C1 Unit Cash Cost US$/lb 5.84 5.10 (15) 5.48
Unit Royalty Cost US$/lb 0.33 0.40 18 0.36
Realised Nickel US$/lb 7.27 7.82 (7) 7.54
Realised Copper US$/lb 2.99 3.49 (14) 3.23
Realised Cobalt US$/lb 10.83 9.49 14 10.11
Average US$/Real 2.07 2.00 3 2.03
((1)) Average payability of 89%
((2)) Including prior period QP adjustments
Mirabela recorded a C1 unit cash cost for the second quarter of US$5.84/lb,
taking the average unit cash cost for the first half of the year to US$5.48/lb.
Unit mining costs per payable pound were higher in the second quarter
primarily due to the higher level of mining activity during the quarter and
lower capitalised mining costs. Total mining costs per tonne were steady
quarter on quarter, (Q2: US$3.03/tonne versus Q1: US$3.06/tonne). Higher
explosive costs, (due to higher nitrate prices), mining staff redundancies and
higher usage of tyres were offset by improved efficiencies associated with the
new excavators. Selling costs for the quarter were favourably impacted by PGM
The realised nickel price for the quarter was favourably impacted by the
finalisation of prior period sales invoices which were subject to arbitration
for a period of time.
Cash and Debt
Mirabela closed the second quarter with cash on hand and on deposit of
US$108.12 million.The decrease in cash on hand from 31 March 2013 (US$140.80
million) included an unfavourable foreign exchange movement of US$10.99
million upon the conversion of closing BRL and AUD held cash into the
Company's presentational currency (USD). The remaining decrease in cash on
hand was driven by: an interest payment of US$17.28 million on the senior
unsecured notes; budgeted capital expenditure of US$8.32 million; and the
repayment of US$2.04 million relating to the Caterpillar finance lease
facility. This cash outflow was offset in part by the finalisation of nickel
sales that occurred in August, November and December 2012 at an average
finalisation price of US7.96/lb compared to an average provisional price of
US7.45/lb (US$2.42 million) and positive cash flow from operations.
As at 30 June 2013 the Company's issued share capital consisted of 876,801,147
ordinary shares. A balance of 4,150,000 unlisted options and 5,091,810
performance rights were outstanding.
The Company issued 36,053 shares during the quarter as a result of the
conversion of 36,053 performance rights into shares. During the quarter
1,166,434 performance rights were cancelled and 5,832 performance rights were
forfeited in accordance with the Mirabela Nickel Ltd performance rights plan.
Additionally, 4,609,547 performance rights were issued pursuant to the
Mirabela Nickel Limited 2013 performance rights plan, approved by shareholders
on 30 May 2013.
No options were exercised during the quarter.
SOURCE Mirabela Nickel Ltd.
Chris Els Chief Financial Officer & Company Secretary Telephone: +61 439 930
Ian Purdy Chief Executive Officer & Managing Director Telephone: +61 410 491
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