PERTH (miningweekly.com) – Canada’s Ivernia has announced that its Paroo Station lead mine, in Western Australia, will enter care and maintenance, citing weakening commodity prices.
The TSX-listed company said that the LME cash price for lead had fallen sharply over the fourth quarter of 2014, to trade at a 30-month low. Despite the company’s best efforts to save on cost and implement mine optimisation strategies, Ivernia has not been able to offset the impact of the decline in metal prices.
As a result, Ivernia would initiate a scaling back of operations as soon as possible, and would revert the operation to care and maintenance.
“Despite record production and sales in 2014 and the progress we have made to reduce costs and improve efficiencies at the mine, the current LME lead price has dropped well below sustainable levels and cannot support profitable ongoing operations,” said Ivernia president and CEO Wayne Richardson.
“In order to protect shareholder value and conserve the viable deposits of our orebody, the decision has been made to place the mine on care and maintenance until further notice.”
In the meantime, Ivernia would continue to progress its updated life-of-mine plan, which was expected to revise the resource and reserve estimates and estimated mine life at Paroo Station, in the context of various factors including depletion from mining activities, data from the in-fill drill programme, revised assumptions and methodologies for the geological model such as cutoff grade, a revised cost structure taking into account external cost drivers such as higher treatment charges and a lower lead price environment.
This work, once completed, would form part of a new independent technical report to be filed in the first quarter of 2015.
Richardson said that Ivernia’s management had also started discussions with the company’s lenders, employees, customers, mining contractor, suppliers and other key stakeholders in regards to the change in operations.
The company’s board was expected to re-evaluate the status of the Paroo Station mine as market conditions warranted.
The company was also awaiting the outcomes from its new independent technical report on its deposits to help it assess at which lead price it could sustainably resume operations.