Fourth Quarter Activities Report
Document date:
Tue 21 Jul 1998
Published:
Tue 21 Jul 1998 00:00:00
Document No:
119072
Document part:
C
Market Flag:
Y
Classification:
NORMANDY MINING LIMITED 1998-07-21 ASX-SIGNAL-G HOMEX - Adelaide +++++++++++++++++++++++++ MANAGEMENT DISCUSSION & OPERATIONAL ANALYSIS GOLD Attributable production was a record 371,650 ounces at a total cash cost of $311 per ounce (US$189/oz). GOLD PRODUCTION ('000oz) periods ended 30 June 1998 3 mths 12mths Western Australia 195.8 781.3 Northern Territory 76.5 292.6 Queensland 70.0 234.6 International 29.4 125.4 Total Attributable 371.7 1,433.9 AUSTRALIA At Kalgoorlie Operations, gold production exceeded 205,000 ounces. A higher Super Pit head grade and Gidji roaster cyclone convertor clean out offset reduced throughput due to SAG mill girth gear problems. Five production days were lost due to remedial work, with the mill currently operating at reduced power draw which may restrict throughput by up to 10 percent. Temporary and permanent cast girth gears have been ordered with 26 week and 42 week deliveries respectively. The effect on Normandy attributable production, after allowance for measures to alleviate the impact, is estimated at 800 ounces per week. Super Pit head grade is expected to average 2.4g/t in the September quarter. A seismic event at Mt Charlotte affected production for two days late in June, with some interruptions to normal production anticipated in July. At Boddington, throughput was maintained despite normal June quarter wet weather, with stockpiles used as supplementary feed. Overall head grade was lower, as predicted, contributing to a 12 percent decrease in gold production. Improvements in mining, milling and administration costs contained total cash cost increases to 4.8 percent. Hydraulic mining commenced at period end, with slurried feed expected to represent approximately 25 percent of mill feed during the trial. At Big Bell, throughput was maintained despite 13 days downtime for SAG mill reline, pinion and girth gear replacement. The Great Fingall open pit haulage contractor was demolished and the ore stockpile almost depleted at a cash flow cost of $248 per ounce. The adjacent Cuddingwarra deposit was acquired for $18 million and ownership of Big Bell Consolidated reverted to a 100 percent interest. Initial pit design and sterilisation drilling commenced. Mining is scheduled in the December quarter. At Kaltails, throughput and gold production were similar. Cash costs were 10 percent higher reflecting the more difficult metallurgy of the remaining dumps and 3.5 percent higher unit cost due to maintenance. At Tennant Creek, production was higher and costs lower reflecting an increased percentage of higher grade White Devil ore. Warrego tailings production was the second highest on record. At Pajingo Operations, improvements to tonnes milled, head grade and recovery lead to record production and the lowest cash cost per ounce to date. The Vera Decline was completed and Nancy North development advanced 959 metres. At Tanami Operations, lower throughput and grade reflected a transitional quarter ahead of treating Callie Underground ore. Commissioning of an additional ball mill and leach tanks lifts The Granites treatment plant capacity to 2Mtpa. At Mt Leyshon, production was a record and 15 percent higher than last quarter. Simultaneous mining of sections of both higher grade orebodies led to a higher head grade, improved recovery and lower total cash cost. INTERNATIONAL At Martha, throughput and production were similar. Stockpiles provided mill feed during June ahead of the July commencement of the new mine earth moving contract. Cost increases reflected leach tank and conveyor maintenance. African mine production was 56,136 ounces (Normandy LaSource share 24,006 ounces) at a cash operating cost of US$166 per ounce (plus US$19 per ounce royalties). Lero was sold effective 31 May 1998. At Ariab, full year production was 17 percent above the previous year at a record 163,381 ounces. As mining reached lower levels of the Hadal Auatib East and Baderuk deposits, the Talaiderut deposit was into production. Stacking rates were maintained at 600,000tpa. At Ity, production improved as predicted to a record 43.711 ounces for the year. Water drainage tests confirmed a conventional excavator/truck system to be appropriate when mining reaches below the water table toward the end of 1998. INDUSTRIAL MINERALS Earnings before interest and tax were 18 percent above the previous quarter and 12 percent lower than the corresponding quarter last year. Larvik Pigment recorded a 14 percent sales increase, with stronger demand for zinc dust in Europe, agricultural products in Australian and some recovery in Asian markets. The new Larvik furnace in Australia is fully operational. Commercial Minerals Division (formerly Industrial Minerals Group) continued to record low overall product demand. Magnetite sales improved marginally with resolution of some industrial disputes in the coal industry. Omya sales were down marginally, with higher agricultural sales offset by a decline in exports. MORE TO FOLLOW 1