TORONTO (miningweekly.com) – Base metals miner Mercator Minerals this week reported lower copper-equivalent production as a result of mill maintenance downtime, reconfiguring the semi-autogenous (SAG) ball mills and mining through harder areas of the Mineral Park copper/molybdenum mine in Arizona.

The company produced 20.4-million pounds of copper equivalent in the quarter ended March 31, which was 15% lower quarter-on-quarter. This was comprised of 8.3-million pounds of copper in concentrates, 800 000 lb of cathode copper, 2.4-million pounds of molybdenum and 152 100 oz of silver.

The company in March said since the start of the year, Mineral Park had taken additional maintenance downtime to reinstall the natural gas turbine. The company also said it was currently mining through harder sections of the mineral reserves.

As a result, the company expected production in the first quarter to be lower than in the fourth quarter, owing to lower throughput and grades.

However, recent changes to the grinding circuit had resulted in sustained throughput increases of about 20% to average 54 700 t/d. This was about 9% above the nameplate capacity of 50 000 t/d of the operation.

"We are very encouraged with the grinding circuit optimisations made in the mill late in the first quarter. The improvements have increased grinding efficiency by passing grinding load from the SAG mills to the previously underutilised ball mills and by optimising the internal configuration of the SAG mills.

“Early results indicate average throughput rates have increased by about 20% over the expected ore grind index assumed in our 2013 mine plan, while maintaining metal recovery rates at above design rates,” president and CEO Bruce McLeod said.

"Our strategy of working safely, increasing productivity, and reducing costs throughout the entire company is starting to deliver benefits as our financial position stabilizes," continued McLeod. "Productivity improvements and cost reductions are positioning us to unlock shareholder value."

At Mineral Park mine, average mill throughput rates have recently increased owing to the optimisation of the internal configuration of the two SAG mills and the changing of the pebble handling processes by feeding a higher proportion of the recycled pebbles directly into the four ball mills.

Mercator reiterated its production guidance for the year of 41.5-million to 46.5-million pounds of copper, consisting of 38.5-million to 42.5-million pounds copper in concentrates and 3-million to 4-million pounds of copper cathode, 11-million to 12-million pounds of molybdenum, and 600 000 oz of silver.

However, molybdenum prices remained low thus far this year. Spot prices hovered at about $11/lb this week.

Laurentian Bank Securities Equity Research mining analyst Christopher Chang in a recent note to clients said: “While the company’s balance sheet has improved, we estimate that the company could seek additional capital by year-end should molybdenum prices remain below $12.00/lb”.

Despite lower metals prices, he maintained a ‘buy’ rating with a target stock price of 75 Canadian cents a share.

Mercator’s TSX-listed stock on Thursday traded 1.47% higher at 34.5 Canadian cents apiece. The company’s stock had lost 73.85% of its value in the past year.