Mirabela Nickel Limited (Administrators appointed) - Quarterly Activity Report for the Period Ended 31 March 2014
PERTH, Australia, April 30, 2014 /CNW/ - Mirabela Nickel Ltd. (Administrators Appointed) (Mirabela or the Company) (ASX: MBN) announces its unaudited first quarter results for the period ended 31 March 2014.
Production Statistics
| Three months ended 31 Mar 2014 | Three months ended 31 Dec 2013 | % change favourable/ (unfavourable) | Year to Date 2014 | ||
| Mining | |||||
| Total Material Mined | Tonnes | 6,145,679 | 9,898,834 | (38) | 6,145,679 |
| Ore Mined | Tonnes | 1,191,754 | 1,794,129 | (34) | 1,191,754 |
| Nickel Grade | % | 0.42 | 0.47 | (11) | 0.42 |
| Processing | |||||
| Total Ore Processed | Tonnes | 1,380,704 | 1,517,220 | (9) | 1,380,704 |
| Nickel Grade | % | 0.42 | 0.45 | (7) | 0.42 |
| Copper Grade | % | 0.10 | 0.10 | - | 0.10 |
| Cobalt Grade | % | 0.01 | 0.02 | (50) | 0.01 |
| Nickel Recovery | % | 51 | 51 | - | 51 |
| Copper Recovery | % | 69 | 67 | 3 | 69 |
| Cobalt Recovery | % | 27 | 28 | (4) | 27 |
| Production | |||||
| Nickel in Concentrate | DMT | 2,938 | 3,433 | (14) | 2,938 |
| Copper in Concentrate | DMT | 915 | 971 | (6) | 915 |
| Cobalt in Concentrate | DMT | 53 | 63 | (16) | 53 |
| Sales | |||||
| Nickel in Concentrate(1) | DMT | 3,810 | 2,742 | 39 | 3,810 |
| Copper in Concentrate(1) | DMT | 1,197 | 838 | 43 | 1,197 |
| Cobalt in Concentrate(1) | DMT | 69 | 53 | 30 | 69 |
(1) Includes sales volume adjustments upon finalisation of assays.
Operations
Mirabela's three month moving average Lost Time Injury Frequency Rate closed the quarter at 0.30. Mirabela continues to target further improvements to this strong safety record through ongoing safety training and safety improvement programmes.
During December 2013 the company adopted a revised mine plan of 25Mt per annum of material mined for 2014 and 2015 respectively. Total mined material movement for the quarter was 6.1 million tonnes of material moved for 1.2 million tonnes of ore which is in line with this revised mine plan. During the quarter, the Company was able to maintain mining operations in accordance with the 25Mt plan despite challenging operational and business conditions. Material movement was impacted by low availability/productivity of a number of loaders and excavators. Mine grades of 0.42% were lower than the previous quarter primarily driven by limited availability of higher grade ore from the South zone of the pit due to high water levels and a number of wall fractures. During the quarter 1.4 million tonnes of ore was milled, at an average head grade of 0.42% nickel and achieving an average recovery of 51%. Plant performance was impacted by additional maintenance requirements on the Primary Crusher and SAG Mills. Recoveries were adversely affected by low water availability due to less reclaimed water from the tailings dam. As a result of the reduced water availability it was necessary to cease desliming and instead utilise a dispersant reagent, thus reducing the overall efficiency of the process.
Work is progressing on the tailings dam lift with U&M (the Company's contract mining operator) having been commissioned to perform the required work.
The primary exploration strategy currently comprises maintaining existing tenements in good standing and compliance.
During the quarter Mirabela produced 2,938 tonnes of contained nickel in concentrate, 915 tonnes of contained copper in concentrate, and 53 tonnes of contained cobalt in concentrate. During the quarter a total of 2,093 tonnes of nickel in concentrate was sold in country to an international trading house and 1,836 tonnes of nickel in concentrate was sold to Norilsk Nickel Harjavalta Oy.
Cash and Debt
Mirabela closed the first quarter with cash on hand and on deposit of US$18.02 million. The decrease in cash on hand from 31 December 2013 (US$30.74 million) was driven by a combination of factors including: negative cash flow from operations; the payment of outstanding creditors deferred from the previous quarter; capital expenditure of US$4.09 million; the repayment of US$3.00 million relating to the Banco Bradesco working capital facility; the finalisation of prior period nickel sales at an average finalisation price of US$6.48/lb compared to an average provisional price of US$6.78/lb (US$2.10 million); and the repayment of US$2.04 million and US$0.74 million relating to the Caterpillar and Atlas Copco finance lease facilities, respectively.
During the quarter the Company received US$35 million of the US$45 million loan from a consortium of holders of the Company's US$395 million 8.75% Senior Unsecured Notes due 15 April 2018 (Interim Loan). An utilisation notice for the remaining US$10 million was submitted on 23 April 2014.
Corporate
The Company appointed Martin Madden, Cliff Rocke and David Winterbottom of KordaMentha as administrators on 25 February 2014.
Board Changes
Mr Geoffrey Handley, Mr Colin Steyn and Mr Peter Nicholson resigned from the Board effective 11 January 2014.
Mr Ian McCubbing and Mr Nicholas Sheard resigned from the Board effective 7 April 2014.
Share Capital
As at 31 March 2014 the Company's issued share capital consisted of 876,801,147 ordinary shares. A balance of 400,000 unlisted options and no performance rights were outstanding. The 4,609,547 performance rights that were granted pursuant to the 2013 Mirabela Nickel Ltd. Long Term Incentive Plan (approved by shareholders on 30 May 2013) were subsequently cancelled by the Board on 10 January 2014.
The Company has remained in voluntary trading suspension on the ASX since 9 October 2013.
No options were exercised during the quarter.
Unit Cash Costs
| Three months ended 31 Mar 2014 | Three months ended 31 Dec 2013 | % change favourable/ (unfavourable) | Year to Date 2014 | ||
| Payable Nickel Production(1) | Lbs | 5,246,511 | 6,735,930 | (22) | 5,246,511 |
| Production Costs | |||||
| Mining Cost | US$/lb | 3.65 | 3.62 | (1) | 3.65 |
| Processing Costs | US$/lb | 1.92 | 1.56 | (23) | 1.92 |
| Administration Cost | US$/lb | 0.83 | 0.61 | (36) | 0.83 |
| Subtotal | US$/lb | 6.40 | 5.79 | (11) | 6.40 |
| Selling Costs | |||||
| Transport/Shipping Cost | US$/lb | 0.88 | 0.35 | >(100) | 0.88 |
| By-Product Credit(2) | US$/lb | (1.40) | (1.10) | 27 | (1.40) |
| Smelter Charges | US$/lb | 1.41 | 1.02 | (38) | 1.41 |
| Subtotal | US$/lb | 0.89 | 0.27 | >(100) | 0.89 |
| C1 Unit Cash Cost | US$/lb | 7.29 | 6.06 | (20) | 7.29 |
| Unit Royalty Cost | US$/lb | 0.39 | 0.20 | (95) | 0.39 |
| Realised Nickel Price(2) | US$/lb | 6.07 | 4.48 | 35 | 6.07 |
| Realised Copper Price(2) | US$/lb | 3.47 | 2.27 | 53 | 3.47 |
| Realised Cobalt Price(2) | US$/lb | 12.31 | 14.36 | (14) | 12.31 |
| Average US$/Real Exchange Rate | 2.36 | 2.28 | 4 | 2.36 |
(1) Average payability of 81% (Q1 2014) and 89% (Q4 2013)
(2) Including prior period QP adjustments
Mirabela recorded a C1 unit cash cost for the first quarter of US$7.29/lb. Unit cash costs for the first quarter of 2014 were higher than the fourth quarter of 2013 predominantly due to lower payable nickel production.
In absolute terms, production costs are lower than the previous quarter. However, due to the decreased nickel payability from 89% (Q4 2013) to 81% (Q1 2014) as a result of the Company's current blend of short and long term offtake contracts for nickel concentrate, and lower production in the current quarter, the resulting unit cash cost is higher in Q1 2014.
SOURCE Mirabela Nickel Ltd. (Administrators Appointed)
Contact
www.mirabela.com.au, Email: info@mirabela.com.au