THE BOURSE WHISPERER: Mincor Resources (ASX: MCR) announced a new mining plan for the company’s nickel mines in Kambalda Western Australia, which will result in the loss of around 50 jobs.
Workers at the company’s Miitell and Mariners mines will be retrenched of the revised mining plan, which Mincor said was part of a new strategy to maximise operating margins and the development of its new growth projects following a recently completed review of the company’s mining operations.
The company said the review was in response to the weakness in the nickel price, which it indicated had fallen sharply through the financial year and remains at multi-year lows.
Mincor will suspend capital development at its Miitel mine, having already stopped it at the Mariners mine and proceed with stoping-only operations at both mines.
On this basis, Mincor expects to produce approximately 120,000 tonnes of ore at 2.8 per cent nickel between June and November 2015, and to achieve its previously stated production target for FY2015 of approximately 8,500 tonnes of nickel-in-ore.
Mincor will be reviewing operations at Miitel and Mariners through the second half of the year in respect to the current nickel price with a view to recommencing capital development and ramping up production from those mines or reducing production after November to focus primarily on the development of its new growth projects at Burnett, Cassini, Voyce and Durkin.
The company expects the revised mining plan will optimise mining cash flows while the initial studies are completed on these new projects.
This will also leave substantial undeveloped Ore Reserves available for future mining at both Miitel and Mariners when the price picks up again.
Mincor stressed the plan is reversible at any time, should the nickel price improve.
Detailed resource modelling is currently underway on the Voyce, Durkin and Burnett projects, while Cassini is undergoing conceptual scoping studies in order to determine drilling priorities for the recommencement of diamond drilling.
In addition, planning for an aircore drilling program over the un-explored northern half of the Cassini magnetic anomaly is well-advanced.
“Our revised mining plan will optimise cash flows and allow us to re-build production at both mines in due course, while giving us the scope to complete the drilling and evaluation of our four exciting new growth projects,” Mincor resources managing director David Moore said in the company’s announcement to the Australian Securities Exchange.
“Based on our strong ore reserve position and these new discoveries, the future outlook for Mincor remains compelling.
“Consensus forecasts for the nickel price are very strong and the changes announced today will give us a solid foundation on which to build our next decade of profitable nickel mining in Kambalda.”