PERTH (miningweekly.com) – Operational challenges at ASX-listed Western Areas’ Forrestania operations continued to impact results during the December quarter, with the company reviewing its production and cost guidance for the 2021 financial year.

Mined nickel production fell from the 4 147 t reported in the September quarter to 3 518 t in the three months to December, while nickel-in-concentrate production over the same period fell from 3 756 t to 3 535 t.

“We had planned to deliver improved quarter-on-quarter results, however, average head grade across the operation remained lower than expected at Flying Fox due to continued mining of lower grade areas and continued pegmatite dilution being encountered at Spotted Quoll,” said Western Areas MD Dan Lougher.

“Access to the remaining higher grade areas at the Flying Fox mine was re-established during December and looking ahead, we believe that production will improve across Forrestania as we mine sequentially through higher grade areas of the mines.”

Nickel sales for the December quarter were down to 3 336 t, from the 4 064 t sold in the September quarter, while cash costs for nickel-in-concentrate increased from A$4.44/lb to A$4.72/lb.

Nickel West will be reviewing its production and cost guidance for the full 2021 financial year, given the operating results of the first half. The company said on Thursday that production would likely be at the lower end of the last guidance range of between 17 000 t and 19 000 t of nickel-in-concentrate, with costs expected to be at the higher end of the last guidance of between A$3.50/lb and A$4/lb.

Meanwhile, Lougher on Thursday noted that significant progress was made with the Odysseus underground development, with 506 m of decline development and a total underground advance of 998 m made for the quarter under review.

“Its excellent to see the significant progress that is being accomplished at our Odysseus project. Strong development advancement rates have been attained in the Odysseus decline for the quarter and the safe delivery of the shaft and winder equipment to Western further de-risks the installation of the shaft haulage system as we move forward.

“Great progress has been achieved on the shaft civil works with the winder house construction now progressing at full speed.”