JOHANNESBURG (miningweekly.com) – Aim- and ASX-listed Beacon Hill Resources produced 194 343 t of run-of-mine (RoM) thermal coal and 54 432 t of saleable coal in 2012.

The company stated that mining and processing operations were kept at a minimum throughout the fourth quarter of the year to accommodate the access and preparation required to start the Phase 2A 1.8-million-ton RoM wash plant upgrade at its flagship Minas Moatize mine, in Mozambique.

During the year, the company invested £5.9-million in the development of Minas Moatize, including the upgrade of the existing wash plant.

In February 2012, the company published the definitive feasibility study (DFS) for Minas Moatize. The DFS was based on a four-million-ton-a-year RoM operation producing, on average, 2.2-million tons a year of saleable coking and thermal coal during its mine life, and had a projected estimated capital cost of $166-million.

However, owing to the materially lower capital cost of $16-million required for phases 2B and 2C of thr wash plant upgrade, which had the potential to achieve 70% of the targeted RoM output of the Phase 3 expansion at 2.8-million tons a year of coking coal, the Beacon Hill board had decided not to proceed with the Phase 3 expansion that would bring the plant’s capacity to four-million tons a year, as originally envisaged in the DFS.

The optimised scenario increased the life-of-mine from 10.5 to 15 years, which could potentially be extended further.

Beacon Hill chairperson Justin Farr-Jones said the company had a number of upcoming critical milestones in the first half of 2013, including the completion of the Phase 2A wash plant upgrade and the company’s first production and export shipment of coking coal.

“The next value trigger for Beacon Hill will be the construction and commissioning of the Phase 2A wash plant to commence maiden coking coal production in the first quarter of 2013,” he noted.

The next phase of development, being the Phase 2B upgrade, was scheduled to start in the second quarter of 2013 and was expected to result in an increase in coking coal yields by up to four percentage points, lifting the coking coal output.

The final Phase 2C upgrade was scheduled to start in the fourth quarter of this year, which was expected to result in an increase in plant capacity to 2.8-million tons a year.

Meanwhile, the miner recorded a loss before tax of £28.1-million on a turnover of £700 000, compared with a loss of £7.4-million on a turnover of £1-million in 2011. This included exceptional write-downs of £12.6-million in respect of the carrying values of the Tasmania magnesite project, in Australia and the Changara coal project, also in Mozambique.

Equity and loan capital raised during the year under review amounted to £14.9-million and the company had £1.2-million in cash, and net assets of £35.5-million, at the end of December.

OUTLOOK

Farr-Jones stated that, during the months ahead, Beacon Hill would also be developing its logistics chain to establish an economically attractive infrastructure solution to link the Minas Moatize mine to the Port of Beira.

“As coking coal production commences in the first quarter of 2013, we will continue to truck our coking coal product for export as an interim measure until rolling stock is delivered in the third quarter of 2013.

“Once we take delivery of the rolling stock, we intend to commence transporting the coking coal by rail to near Beira,” he said.

The final steps to establishing a linked infrastructure chain would be loading at the Carbonmoc facility at Minas Moatize and unloading at the Dondo siding for a final 30 km haul to the Port of Beira, in the fourth quarter of this year, as the plant capacity expanded to 2.8-million tons a year by the end of 2013, following Phase 2B and Phase 2C plant expansions.