SINCE acquiring the Century Zinc mine from MMG in 2016, New Century Resources has brought the site back into production and is set to ramp up to 12mtpa by March 2020.
The focus has been on the existing ore reserves to produce zinc in the lowest cost quartile globally – with substantial mineral resources on the mining leases (including more than 2,200,000t of JORC compliant zinc metal equivalent resources located within mineralised tailings, and around 1,000,000t of JORC compliant zinc and lead resources in the Silver King, South Block and East Fault Block base metal deposits) offering a the potential for mine life extension and metal production increases from the mine’s operations.
The mine concentrate continues to achieve relatively low impurity penalty rates.
This is despite spot treatment charges rising over 200pc since the start of operations and representing more than 30pc of New Century’s C1 costs, which are continuing to reduce in line with increasing metal production.
Treatment charges received for Century concentrate remain in line with standard market pricing and are also competitive with other global zinc miners.
In the medium term, treatment charges are expected to fall in line with increasing smelter utilisation rates – especially in China.
To date, 100pc of New Century’s concentrate has been sold with all forecast production for the remainder of the year contracted and scheduled for delivery.
Operational performance
Looking back over the course of the year, the mine has also delivered strong zinc recovery improvement and continued to report record metal production rates, with more than a 30pc increase in average daily metal production and decreased C1 costs of around 24pc from May through August.
As part of the ramp up to 12Mtpa operations, New Century initiated slurry commissioning and optimisation of cleaners 2B, 3B and 4B in August, which has allowed the full cleaner circuit of the processing plant to be incorporated into operations for the first time.
The upgraded cleaner circuit has also contributed to improving Century zinc concentrate product quality, with operations now regularly achieving average zinc grades of 49-50pc zinc and to a seven-day moving average of 55pc (up from 52pc) during September.
For the month of September, the company reported record performance across all production parameters, with operations delivering around 50pc recoveries for 30 days straight.
Essentially, the upgrade removed bottlenecks for continued recovery improvement and increasing metal production, which was evident in an overall zinc metal output increase of 28pc, with 26,171t of zinc metal produced in 53,500t of concentrate grading 49pc zinc (compared to 20,450t zinc metal in 42,500t of concentrate at 48.1pc zinc during the March quarter).
Silver content of 150g/t in concentrate remained in line with previous quarter.
From a mining perspective, the overall average mining rate increased 17pc quarter-on-quarter (1.87mt in September vs 1.6mt in March.
The average mined grade during the quarter was 2.96pc Zn, which continues to reconcile strongly with the Ore Reserve model and mine plan.
Stable operation has been achieved in hydraulic mining, at a rate above 8mpta during the month of September.
This stability has continued into October and the mining rate is now being progressively increased to 9mtpa over the course of the December quarter.
For the December quarter the company expects guidance of 27,000t – 33,000t zinc metal at C1 costs of US$0.87/lb-US$0.98/lb (payable metal basis including treatment charges).
With improved production throughput, company’s C1 costs could potentially reduce by approximately a further US$0.15/lb outside of any production increase or cost savings, should treatment charges revert to a 10-year average.
Expansion upgrades
New Century anticipates further improvements to metallurgical recoveries and metal production rates during FY20, through the expansion to 12Mtpa plant capacity.
Improvements during the December 2019 quarter are set to be achieved from the continued optimisation of the upgraded cleaner circuit and the implementation of the new scavenger circuit upgrade.
On October 24, New Century announced the initiating of slurry commissioning of the upgraded scavenger circuit to allow the full capacity of that section of the processing plant to be incorporated into operations for the first time.
The circuit upgrade was the second stage in optimising throughput, recoveries and concentrate quality and recent operational rates are sitting at around 9mtpa, meaning only around an additional 25pc increase in throughput is required to meet New Century Resources goals for the site of 12mtpa in FY20.
The company reports that capital expenditure program for the expansion is on schedule and budget, at 55pc complete with $18m ramp up expenditure remaining of a total $40m.
New Century also expects to incur a further $9m in sustaining capital expenditure in FY20, predominantly associated with the five-yearly survey of the company’s transhipment vessel, the MV Wunma, and the annual dredging of the Norman River.
The third and final stage – upgrading the rougher circuit – is on track for completion in March 2020.
Ramp up royalties
The mine expansion will also be supercharged by the Queensland Government agreeing to a royalty deferral agreement, supporting more than 260 construction and 240 operation roles on site.
Premier Annastacia Palaszczuk said the royalty agreement was an important step in her government’s commitment to open up the North West Minerals Province.
“We know the North West Minerals Province is rich in minerals like copper, cobalt, zinc and gold, as well as potential deposits of rare earth minerals that will play an increasing role in renewable electricity generation and battery technology,” Ms Palaszczuk said.
“We want to see new projects in the North West Minerals Province, but also new technologies that can extract more value from former projects like this.”
The agreement is the first Royalty Deferral and Repayment Agreement to be negotiated under the Resources Regional Development Framework (RRDF) and will provide a precedent for similar arrangements in the future.
Deputy Premier, Treasurer and Minister for Aboriginal and Torres Strait Island Partnerships, Jackie Trad, said New Century was a great example of what the RRDF can achieve.
“We said when royalties were deferred, they would have to be repaid in full, with interest and with security of payment in place,” Ms Trad said.
“We said investors would have to meet a financial assurance model to ensure compliance with environmental conditions to cover rehabilitation costs.
“New Century has satisfied all these conditions through an exhaustive process and has also committed to employ a significant proportion of local indigenous workers through the additional jobs being created by the project.
“The company has set a great benchmark for future proponents wishing to engage in a Royalty Deferral and Repayment Agreement.”
The reinvigoration of the Century Mine has the additional benefit of continuing the operation of a 304km slurry pipeline between the mine site and Karumba, and the continued dredging of the port of Karumba, making the site available for other commercial users.
