Independence to cease mining at Long nickel mine in May

1st February 2018 By: Mariaan Webb - Creamer Media Senior Researcher and Deputy Editor Online

JOHANNESBURG (miningweekly.com) – The Long nickel mine, near Kambalda, Western Australia, is set for closure this year, Independence Group announced in its December quarter results.

Mining will cease on May 31, after which the underground mine will enter care and maintenance. The Long mine produced 1 374 t of contained nickel and 86 t of contained copper in the second quarter, compared with 1 572 t of nickel and 117 t of copper in the first quarter.

While the half-year production performance was in line with the company’s guidance, cash costs exceeded its A$4.40/lb to A$4.90/lb target. Half-year cash costs amounted to A$5.10/lb, with second-quarter costs at A$5.47/lb.

Overall, Independence reported a strong quarter, with the Nova operation, in the Fraser Range, and the Tropicana joint venture, on the western edge of the Great Victoria desert,  delivering production and costs within or better than the company’s guidance.

The Nova mine delivered better-than-nameplate production rates from the underground mine and processing plant in the month of December, which compensated for a softer start to the quarter, during which it produced 4 565 t of nickel and 2 011 t of copper at cash costs of A$3.84/lb nickel.

“With the benefit of two quarters of commercial production behind us and having demonstrated the ability to meet design on a consistent basis, the Nova team has commenced the process of fine tuning the operation,” MD and CEO Peter Bradford said.

The Tropicana mine’s production increased by 19% quarter-on-quarter to 135 224 oz of gold at an all-in sustaining cost of A$939/oz. Half-year production of 249 284 oz at Tropicana exceeded the pro-rata full-year guidance of 220 000 oz to 245 000 oz.

The Jaguar mine produced 6 885 oz of zinc and 591 oz of copper at a cash cost of A$1.37/lb of zinc. The production was lower than the first quarter output, owing to scheduled lower grades mined, but remained within the year-to-date guidance.

Bradford commented that the production and cost improvements at Nova and Tropicana, combined with robust commodity prices, had boosted the company’s balance sheet, with net debt having been reduced from A$164-million at the start of the 2018 financial year, to A$120-million.

Unaudited underlying earnings before interest, taxes, depreciation and amortisation were in line with the previous quarter at A$65-million, while cash from operating activities was lower owing to delayed shipments.