JOHANNESBURG (miningweekly.com) – South African miner Metorex will complete an updated geologically constrained resource model, mine design and schedule for its flagship Ruashi mine, in the Democratic Republic of Congo (DRC), by mid-August, the group reported on Monday.

The full cost of the programme was estimated at around $1,88-million.

“The urgency of this project is driven by a need to gain certainty in the short-term plan, and to review the mine design using revised copper and cobalt consensus forecast prices to limit possibly unnecessary overburden stripping,” said Metorex CEO Terence Goodlace in a statement.

“Additionally, it will provide a foundation for reviewing the medium-term ramp-up and the Ruashi ore resource and mineral reserve statement, as at June 30, 2009, as required by JSE reporting regulations.”

In January, Metorex started an infill reverse circulation (RC) drilling programme at Ruashi, focusing on shallow mineralisation of the northern portion of the Ruashi 1 pit, in order to improve confidence in the geological and orebody interpretation and to enable moving the Ruashi 1 resource into the measured category.

About 47 RC holes have been completed for a total of about 1 620 m, and final assay results from this programme would be returned within the next month.

Metorex also started a diamond-core drilling programme of 5 160 m in early April, targeting areas of low confidence in the geological interpretation and grade estimation of the Ruashi 1, 2 and 3 pit resources.

The drilling prgoramme would be completed by the end of next month, with core logging, sampling and assay activities running concurrently, the miner reported.

COPPER, COBALT OUTPUT UP

In its operational update for the March quarter, Metorex reported that copper production had increased by 0,5% to 7 316 t, and that copper sales had risen by 1,7% to 7 534 t.

The improved performance was driven by increased production out of Ruashi, but was offset by lower output at the Sable mine, in Zambia, as a direct result of a lack of third party ore.

The tonnage milled at Ruashi increased by 40% to 143 000 t at an average blended copper head grade of 2,63% and a blended cobalt head grade of 0,59%. Tonnage feed was made up of ore from the open pits, stockpiles and old tailings facilities.

The company reported that the Ruashi mill circuit was affected by a ten-day planned shutdown for relining, which had a negative impact on tonnage throughput.

“Ruashi continued to improve output and it is pleasing to report that the mine produced 1 500 t of copper in April 2009, in line with actions that have been aimed at increasing plant availabilities and debottlenecking key areas of the metallurgical process.”

The mine tonnage volumes from the Zambian operation, Chibuluma, decreased for the quarter as a result of a safety and mining cycle review.

Metorex’s cobalt output rose by 92% to 165 t in the three-months ended March. The company stated that the Ruashi mine’s cobalt production continued to ramp-up and that the quality of the product continued to improve.

In April, Ruashi produced 150 t of contained cobalt at a quality, which Metorex said was approaching specification requirements.

However, cobalt sales declined in the quarter, as a result of timing differences.

Meanwhile, Metorex reported lower fluorspar production, owing to a drive to produce a higher-quality product and as a result of power outages in South Africa, where its fluorspar mine, Vergenoeg, is located.

Tonnage throughput remained at 150 000 t a quarter and feed grades were consistent at 40% fluorite, however, acidspar recoveries have reduced from 73% to 63% as a result of the new magnetic separation circuit commissioned, aimed at reducing iron contamination in the concentrate. The circuit was commissioned in the December quarter.

The company said that the market for fluorspar remained “tight” and that the Vergenoeg mine’s acidspar sales have not yet been fully committed for the 2009 calendar year.

Gold production at Consolidated Murchison, in South Africa, was also affected. Antimony production declined owing to the scaling back of operations, reduced output from the Beta shaft and poor recoveries at Consolidated Murchison.

The Beta shaft winder was affected by a lightning strike during January 2009, but this was rectified during March 2009. The poor recoveries for the quarter were primarily a result of a breakdown of one of the primary mills in the circuit as well as the high level of plant stoppages.

The company reported that the reopening of the Beta shaft, along with full mill availability would improve production. Consolidated Murchison was implementing a turn-around plan in an attempt to stave off closure, and sales of antimony have improved on the back of increased demand and improved pricing.

Meanwhile, Metorex has stated that Consolidated Murchison’s historic gold hedging contract losses have been crystallised at R41-million, down from a level of R52-million previously reported. This debt will now be repaid on November 30, 2009.

Chibuluma also had a $36-million term loan with Standard Chartered Bank and Metorex reported that the debt facility agreement has been successfully restructured. The first installment has now been deferred from March 31, 2009 to September 30, 2009, and the facility is repayable over nine semi-annual installments.

CRC RIGHTS OFFER

Further, Metorex stated that Copper Resources Corporation (CRC), in which Metorex owned a 50,3% stake, had pursued a rights offer to provide it with working capital. In addition to a very small number of shareholders, Metorex participated in the rights offer by converting a portion of its CRC loan into equity, which resulted in it holding 87% of the enlarged issued share capital of CRC.

However, the rights offer failed to inject sufficient fresh capital into CRC and an equity partner was now being sought for this project.

At the end of last month, Metorex announced at that it had started legal proceedings against Aim-listed Central African Mining & Exploration (Camec), in the amount of £86,3-million, for breaching Article 56A of CRC’s articles of association.

The company is suing Camec for failing to make a mandatory offer for CRC, but Camec bought a sizeable stake in the second quarter of last year.


In May last year, Camec bought shares in CRC that, at the time, represented 47% of the company.
 Under CRC's articles of association, any party that buys more than 30% of the firm's shares is required to extend an offer to the holders of the balance of the shares in the company. After Camec failed to make the obligatory offer, CRC announced on December 10 that it had disenfranchised Camec as a shareholder.

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