PERTH (miningweekly.com) – Australian nickel miner Mincor has exceeded its production target of 8 500 t, producing 8 632 t of nickel-in-ore during the financial year ended June 30.

For the quarter ended June, nickel sales reached 1 468 t, compared with the 1 651 t sold in the previous quarter, as the Mariners mine, in Western Australia, delivered lower grades.

Mincor told shareholders that cash costs for the quarter also increased to A$7.78/lb, compared with A$6.81/lb in the previous quarter, on the back of the lower grades from Mariners.

For the full-year, cash costs rose to A$5.93/lb, compared with the A$4.96/lb reported in 2014.

Mincor noted that the lower grades and the resulting lower metal production, combined with sharply falling nickel prices during the year, generated operating losses for the second half of the year.

The company pointed out that while near- and medium-term nickel price forecasts remained positive, Mincor’s operations could not be sustained at current spot prices without substantial changes.

As a result, the miner launched a revised mining strategy in April this year, to build on its unusually flexible operating model in the Kambalda district, which gave the company the ability to tailor production levels to suit the prevailing conditions.

The strategy was designed to protect Mincor’s operational capability and ore reserves through the price downturn, while optimising short-term cash flows and preparing for a transitional period of suspended production, if necessary, during which Mincor’s resources would be focused on exploration and development of its suite of growth projects.

As part of this strategy, Mincor earlier this year also stopped capital development at both its Mariners and Miitel mines, resulting in some 50 redundancies. Further adjustments were made in July, which resulted in a further 38 redundancies.

For the first six months of the 2016 financial year, Mincor was expecting to produce between 2 000 t and 3 000 t of nickel-in-ore, subject to an ongoing review.

The company said the decision could be made to keep both its mines offline during the second half of 2016, to preserve ore reserves, adding, however, that the company would retain the capacity to ramp up production if circumstances warranted.