In a statement today Metals X Limited reported further problems in the ramp-up to full production at its Renison mine in Tasmania and also suggested that a planned expansion there and the development of its Wingellina nickel project will be held back by low prices and financing issues.
The company did not give production figures, but said only that “concentrates are being produced and exported on a weekly basis and are generating regular cash flow”. It had originally expected to reach full capacity of approximately 9,000 tpy tin-in-concentrate by the middle of the current quarter, but had experienced various delays and bottlenecks and was temporarily mining lower grade ore. Net costs have also been adversely affected by the decision not to commission a circuit to produce by-product copper.
“The net effect of these delays in completing the ramp-up, will be in the short-term lower production and hence revenue, and higher than originally estimated costs. Despite these challenges and consequences, the viability of the mining operation is not under threat.”
Metals X will shortly complete a feasibility study on the treatment of tailings at Renison, but said that “in the current climate of debt and equity market demise, it is considered that this project will be difficult to finance.” Capital costs for the expansion are in the order of A$190 million.
