PERTH (miningweekly.com) – Nickel miner Western Areas has downwardly adjusted its full year expectations for 2021 to take lower ore grades into consideration.
Nickel-in-concentrate production for the financial year is now expected at between 17 000 t to 19 000 t, down from the previous estimate of between 19 000 t and 21 000 t.
Unit cash costs of production are expected to increase in the full year, from the previous estimate of between A$3.25/lb and A$3.75/lb, to between A$3.50/lb and A$4/lb.
The revised guidance for nickel-in-concentrate production and unit costs of nickel in concentrate are owing to the inclusion of increased lower grade ore in the 2021 financial year, following some seismicity encountered at the Flying Fox mine.
MD Dan Lougher said that the issues encountered have impacted nickel production and costs to date in this financial year, and would require the remaining life-of-mine for Flying Fox to be rescheduled, which has resulted in the deferral of some higher grade material until later in 2021, and into 2022.
“Flying Fox has been an exceptional mine over its 15-year life to date, but unfortunately as it enters its final years there is limited flexibility in the mine plan when unexpected issues occur. While it is disappointing to lower our guidance expectations for 2021, we are continuing to work with our mining contractor to reduce operating costs and maximise cashflow generation over Flying Fox’s remaining life,” Lougher said.
Production guidance has also been impacted by lower grade material being mined at the Spotted Quoll mine during the September quarter, owing to an intrusive pegmatite unit encountered in the Stage Two zone of the mine, which increased waste dilution in the scheduled mining areas.
Western Areas on Friday reported that nickel-in-concentrate production during the September quarter was down to 3 756 t, from the 5 114 t delivered in the June quarter, with production impacted by the re-sequencing of the Flying Fox mine schedule and lower grades at Spotted Quoll.
Nickel sales for the quarter reached 4 064 t, down from the 4 777 t sold in the previous quarter, while the realised nickel price increased from A$8.64/lb to A$9.28/lb.
“The operating results at Forrestania were disappointing and reflect the maturity of the operation. As guided, reliability in the operating results will be evident as we transition to include more lower grade areas from Flying Fox into the plan and the ability to move between different working areas becomes constrained,” said Lougher.
Looking at the Odysseus mine, construction and development of the project continued during the quarter under review, with twin declines started with the underground rehabilitation and dewatering works essentially completed.
“Mining at the Odysseus project continues to gain momentum as we fired the first development cut to commence the twin declines towards the Odysseus orebody. Refurbishment of the hoist shaft infrastructure has been completed with shipping from South Africa expected in November, and the majority of the equipment delivered to the Cosmos site in December,” Lougher said.
A previously completed definitive feasibility study estimated that the Cosmos Odysseus project would produce on average 13 000 t/y of nickel in concentrate over an initial ten-year mine life, based on an ore reserve of 8.1-million tonnes, grading 2% nickel for 164 000 t of nickel.