Low grades hit Western Areas output
PERTH (miningweekly.com) – Nickel miner Western Areas has seen a slight decline in production for the quarter ended September.
Nickel mined in the three months under review reached 3 741 t, compared with the 4 911 t reported in the June quarter, with nickel sales declining from 4 147 t to 3 962 t.
Western Areas told shareholders that the lower production from the Forrestania mine reflected expected variability in grade from the mature Flying fox mine, and the inclusion of increased low-grade mining areas. Mill production was also impacted by lower average head grades and the treatment of some low-grade stockpiled ore.
“The operating result at Forrestania reflects the variability in grade at the Flying Fox mine, which was expected at this maturing operation, with mill production impacted by the lower average head grade and treatment of some low-grade stockpiled ore. However, the average realised nickel price increased to A$11.90/lb for the quarter, as demand from the stainless-steel market grows and the long-term fundamentals for the electric vehicle (EV) battery market become increasingly robust. This enabled us to increase our operating cashflow over 30%, relative to the prior quarter, and maintain a strong cash balance to further enhance our position to achieve long-term growth,” said Western Areas CEO Dan Lougher.
Following the end of the September quarter, Western Areas announced the first ore production at its Odysseus operation. The underground development of the mine is advancing as scheduled.
“The announcement of first ore production at Odysseus earlier this month, following substantial advancement of the project during the September quarter, marks a key milestone for the company’s new long-life nickel mine. Our focus is building on this positive momentum at Odysseus by methodically ramping up ore production and construction activities, continuing to bolster the high-potential AM6 and Mt Goode deposits and proactively progressing a competitive offtake tender for the upcoming nickel sulphide supply into the class 1 nickel market,” said Lougher.
Ore from the Odysseus project will be stockpiled during construction of the concentrator complex, which is due to produce first concentrate in the December quarter of 2022. Western Areas is also assessing options for potential ore tolling arrangements in the short term.
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