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29Metals Limited Reports Q2 Results, Progress in Production Restart, and Good Outlook
29Metals Limited (‘29Metals’ or, the ‘Company’) has released its results for the June 2023 quarter (‘Jun-Qtr’), showcasing significant progress and positive developments in its operations. The Australian mining company reported on key points related to safety, production, costs, and future prospects.
Safety Performance
In terms of safety, 29Metals reported a group total recordable injury frequency rate (TRIFR) of 9. 0 at the end of the quarter, slightly higher than the previous quarter's rate of 8. 1. The group lost time injury frequency rate (LTIFR) stood at 1. 7, compared to 1.
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6 in the previous quarter. The company remains committed to maintaining the highest safety standards in its operations.
Golden Grove Operations
29Metals reported significant improvements in copper and zinc production at the Golden Grove mine during the quarter. Copper production reached 4. 2kt, compared to 3. 2kt in the previous quarter, while zinc production increased to 13. 4kt from 8. 7kt. However, costs of production also saw an increase due to stockpile movements and lower by-product credit contributions.
The company made considerable progress in the Booster fans project, which aims to increase air flows into the Xantho Extended area of the mine. The commissioning of this project is expected to conclude during the September quarter, unlocking higher mining rates and contributing to lower unit costs.
29Metals also achieved milestones in lifting the constraint on milling rates, previously implemented to manage available tailings capacity. This was made possible by the approved lift of the tailings storage facility (TSF) 3, which is expected to drive higher copper and zinc production and lower unit costs in the second half of the year.
Capricorn Copper Operations
During the quarter, operations at the Capricorn Copper mine remained suspended due to the impact of an extreme weather event in March 2023. The company, however, remains on track for the phased production restart, with plans to restart from mid-August 2023 and recommence mining from Esperanza South from mid-H1 2024. Recovery and other expenditures during the quarter were in line with expectations.
Efforts to reduce and manage water, including the preparation of an interim water treatment solution and increasing mechanical evaporation capacity on-site, have progressed well. The company is also assessing options for tailings storage capacity to transition to a new life-of-mine facility.
Corporate and Financial Updates
29Metals drew the full amount of its US$40 million working capital facility during the quarter. The company secured covenant relief from its lenders, considering the impact of the extreme weather event at Capricorn Copper. Positive engagement with insurers is ongoing regarding property damage and business interruption resulting from the weather event.
Unaudited available cash at the end of June 2023 stood at $127 million, reflecting the company's financial position.
Outlook and Managing Director's Comments
Looking ahead, 29Metals expressed optimism for the remainder of the year. The company highlighted the progress made during the quarter in positioning its assets for positive outcomes. The approvals for TSF 3 and the debottlenecking projects at Golden Grove are expected to drive production growth for the rest of 2023 and beyond.
Regarding Capricorn Copper, the company remains committed to delivering the recovery plan and realising the asset's upside potential. Excellent drill results during the quarter showcased the potential for new discoveries and significant extensions to existing Mineral Resources estimates.
In conclusion, 29Metals Limited has reported positive developments in its operations during the June quarter, with progress in production restart, improvements in copper and zinc production, and a positive outlook for the future. The company remains dedicated to maintaining high safety standards and maximising the potential of its assets.
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