TORONTO (miningweekly.com) – TSX-listed Orvana Minerals on Friday reported intermittent work stoppages at its openpit Don Mario Upper Mineralised Zone (UMZ) mine, following the suspension on Wednesday of operations at the leach-precipitation-flotation (LPF) plant at the mine, amid the yearly union wage negotiations, as mandated under Bolivian law.

The work stoppages at UMZ started after the local union gave notice of a formal strike for a “set short period of time”. The Canadian gold and copper producer said it was focused on finalising the wage contract and bringing operations back to normal as soon as possible.

Management said it expected to book a pretax impairment charge of about $6.5-million for the third quarter on the UMZ mine as a result of the suspension.

"We expect to resolve these annual mandated wage negotiations in a timely manner and will provide an update once negotiations are complete," interim president and CEO Michael Winship said in a statement.

Orvana stressed that it was handling the work stoppages according to Bolivian labour laws and was negotiating with the union in an “orderly manner”.

LPF consumables and labour costs had risen “substantially” at the plant and the recoveries and maintenance of LPF oxide feed were found to be inconsistent and, more recently, “well below” forecast.

The oxide-ore process’ acid consumption had also increased recently, owing to the physical characteristics of the ores changing.

The company said the LPF campaigns cost significantly more than the flotation only campaigns on a unit cost per tonne basis, adding that the projected long-term metal prices were lower than expected.

Orvana, in April, also suspended operations for a day, after the union demanded certain payments allegedly owed to union employees for two periods between 2002 and 2012. The company said the payments were not part of the labour agreement at those times.

Transition ore processing consisting of both copper-in-oxide minerals and copper-in-sulphide minerals would, however, continue by a flotation only process. The acid plant and other process areas of the LPF plant would be placed on care and maintenance.

The UMZ mine would now focus on optimising the flotation process, with more metallurgical and engineering testing on alternate methods of oxide treatment under way.

Further, the company also recently conducted positive additional tests to determine whether oxides could be processed by flotation only, using different reagents.

Positive preliminary results were completed in preparation for the next full plant campaign tests, considered in coming months. The company intended to continue to stockpile oxides that are stripped for access to the sulphide ores.