The R462-million cash mining profit of the JSE-listed Metorex indicates the growing strength of the formerly troubled diversified mining company.

“We’ve got through most of the woods,” Metorex CEO Terence Goodlace told Mining Weekly in a video interview last week – a year to the day after he took over the reins of the then heavily cash-strapped business.

The R462-million in the six months to the end of December is nine times more than the R47-million of the corresponding period last year and the margin of profit is now 33%, compared with the 8% of last year.

“That cash mining profit just shows that we’re in a much stronger position than we were before,” Goodlace added.

The cash mining profit was also indicative that the company’s Chibuluma and Ruashi copper/cobalt operations were coming to the fore.

The far better cash mining profit performance was achieved in spite of the onerous hedges that fall away in four months, Goodlace said.

Shareholders have given strong support in the $100-million capital raising and clawback arrangement, with $78-million cash from the clawback expected during the second week of March.

Negotiations with Standard Bank on the revised Ruashi debt package have been concluded.

“The minute we get that money from the clawback, we’ll trigger the revised Ruashi debt package,” Goodlace told Mining Weekly.

The company was prioritising the mobilisation of its exploration and feasibility work on major Kinsenda, Lubembe and Musonoi copper/cobalt projects in the Democratic Republic of Congo (DRC), while simultaneously expecting to continue Ruashi, Chibuluma and Sable production at December-quarter levels. Ruashi has continued its positive trend, with quarterly copper production having increased by 32,1% to 7 518 t, and cobalt by 21,9%, to 812 t. Ruashi milled 328 078 t of ore in the December quarter; Chibuluma 138 491 t; and Sable produced 1 270 t of copper.

Since its recapitalisation, Metorex has had to dispose of its fluorspar and gold assets and refocus the company on base metals.

“The situation in the group has improved tremendously. We’ve got some very good assets in the DRC.”

With Ruashi up and running, Metorex needs to move quickly to bankable feasibility study stage with its three very prospective projects.

“We’ve been looking at technical excellence and we’ve now completed our first resource numbers for the Dilala East project, which is one of the prospective projects, and we are very excited about the numbers we’ve seen in that project,” Goodlace said.

Dilala, with 19,1-million tons of potentially good-grade copper, has the makings of possibly becoming a very good mine.

Metorex believes strongly in the fundamentals of copper, the supply of which is stressed and the demand for which continues to grow.

“We’re really well positioned with the assets that we have,” he says.

Metorex is still in negotiations with Bernard Swanepoel’s To The Point (TTP) on the future of its troubled Consolidated Murchison antimony/gold operation.

“We’ve always looked at trying to save the mine rather than closing it or putting it on care and maintenance and thus we’ve kept it open.

“We’ve brought in TTP to assist with that, and we’re at an advanced stage of negotiations with them,” Goodlace told Mining Weekly.

Optimisation of the Ruashi, Chibuluma and Sable operations will continue, with Goodlace focusing intensely on volume, value, quality and what he calls ‘3C’ – costs, capital and cash flow.

Of the three projects, the first on Metorex’s list is Kinsenda, an underground mine that was operated in the 1980s and which has nearly 5% copper grade.

“We’re dewatering that mine at the moment; we are paying holding costs, we’ve got a workforce and we’ve got power supply. We rapidly need to drill some infill drilling holes and we have already started mobilising towards doing that.”

A code-compliant resource number is expected soon for the Lubembe deposit, where $3,5-million has been spent on drilling.

Drilling work will continue at Musonoi (Dilala East), where a start on engineering work is expected. “We’ve released that resource and it has pretty good grades and we need to get the technical team into the feasibility study and advance that,” he said.

Major South African engineering consultants have been invited to submit requests for quotations to start feasibility work.

In the six months to December, Metorex lifted revenue 114% to R1,4 billion, despite the $3 900/t.

Adjusted headline earnings for the period were 12c a share and copper sales increased to 24 723 t and cobalt sales to 1 505 t.

Noncore asset disposals substantially restored the balance sheet with group debt having been reduced by 29% to R1,5-bil- lion.

“We’ve entered a new phase,” said Goodlace, with the company moving out of the survival mode and into the growth mode.

Group quarterly copper production increased by 3,5% to 12 634 t, compared with figures for the previous quarter, and group quarterly cobalt production increased by 21,4% to 823 t.

Quarterly copper production costs net of by-products from Ruashi and Chibuluma were well controlled at $2 929/t.

To watch a video in which Metorex CEO Terence Goodlace tells Mining Weekly Online’s Martin Creamer the company will obtain $78-million in claw-back cash imminently, click here.

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