PERTH (miningweekly.com) – Metals miner Straits Resources was still pondering the demerger of its copper and gold businesses, but executive chairperson Andre Labuschagne said this would only occur once operations have stabilised.

“A demerger still remains the favoured method to unlock the unrecognised value that exists in Straits’ current portfolio; however, in order to demerge, we need to have stable operations that are appropriately capitalised and financed,” he said on Monday.

“This remains our key focus and we will not implement the demerger until the fruits of our current initiatives have materialised,” he added.

However, Labuschagne noted that the company would also not discount any alternative that had the potential to provide shareholders with a profitable outcome.

Straits on Monday reported that operations at its Tritton copper mine improved during the three months under review, with copper production up 25% on the previous quarter, to 5 580 t.

A record 92 000 t of ore was mined from the Tritton underground mine during March this year, as a result of improved truck haulage operations and stope scheduling.

Labuschagne said Straits’ focus at Tritton had been on improving productivity in the underground operations to increase ore to the currently under-used processing plant, thus improving unit costs.

“We are currently reviewing the life-of-mine plan and I am pleasantly surprised by the various options available to us by applying alternative mining strategies to our current resource base,” he noted.

Meanwhile, Labuschagne noted that the Mount Muro gold mine was not achieving either its cost or operational targets, with the company currently focused on the performance of the grade against the mine plan.

“Work continues to better understand the geological structures of the Serujan orebodies and we expect to be able to provide a more detailed update in May. However, from the work undertaken to date, we have been able to develop a new operating strategy, which we believe will significantly enhance the economics of the orebody, compared with the previous strategy.”

Labuschagne noted that the new mine plan was focused on reducing the overall waste mined between now and the completion of mining at the Serujan pit, which would result in around ten-million cubic metres less waste being mined, for the loss of only 20% gold-equivalent ounces of production.

“The reduction in volumes of waste removed has enabled a restructuring of our mobile fleet to occur with a large number of units currently being stood down. This will result in not only a significant reduction in the base monthly charges incurred for this equipment, but will also have flow-on reductions in the cost of fuel, tyres, maintenance and labour.”

The change in the mine plan would reduce the Serujan pit’s life by some nine months, but Labuschagne noted that this would be offset by improved economics.

“We do, however, have a portfolio of reserve/resource status projects from which to draw on and we will now bring forward our review and development processes for these projects, in line with a new five-year plan. This plan is currently being finalised,” he added.

Meanwhile, Labuschagne noted that, over the short term, the company would also cut back on exploration, with exploratory work being limited to leases immediately around the current operating mines.

“I don’t believe the market currently appreciates the inherent value in our remaining exploration portfolio, particularly the Temora project and, therefore, we continue to explore all options for these assets,” he said.