Photo by: Bloomberg
PERTH (miningweekly.com) – Heavy rainfalls in Queensland could likely see a quicker uptake of global miner Sibanye-Stillwater’s takeover offer for zinc miner New Century Resources, as operations at its namesake mine remain suspended.
New Century earlier this month suspended operations at the Century mine and at the Karumba port facility, following heavy rainfall in the region.
The company on Friday said that Century had received 1 756 mm of rainfall this financial year, including 752 mm in March to date alone. This was well above the average yearly rainfall of 568 mm in the region, and the previous record yearly rainfall of 1 290 mm in 2011.
The extreme rainfall has cut off access to Century by road, which has impacted the deliveries of production consumables. However, the airstrip remains open allowing for shift change charters and the delivery of necessary camp consumables.
New Century told shareholders that recovery efforts were progressing, however, production and non-essential activities remained suspended while dewatering operations continued. The company does not expect to resume production for a period of two to three weeks, at which time hydraulic mining activities would only operate at 75% of nominal capacity. The return to normal production levels is only expected by mid to late April.
New Century has warned of production losses of 15 000 t to 20 000 t of zinc metal for the 2023 financial year.
The company on Friday also warned that the production shortfall is likely to impact short-term liquidity. As such, the company is engaging with shareholder and suitor Sibanye-Stillwater on mitigating key operational and business risks, including short-term liquidity issues.
Sibanye has confirmed that it is committed to working with New Century to ensure New Century remains in a position to pay its debts as and when they become due and payable and subject to agreement on legal documentation, to providing or procuring a funding solution up to A$30-million, subject to New Century providing certain information and releasing the Target's Statement as soon as possible.
Sibanye’s offer for New Century will remain open, and the New Century board has again urged shareholders to accept the A$1.10 a share offer.