TIDMMTL
RNS Number : 1682F
Metals Exploration PLC
25 October 2018
METALS EXPLORATION PLC
QUARTERLY UPDATE TO 30 SEPTEMBER 2018
Metals Exploration plc (AIM: MTL) ("Metals Exploration" or "the
Company"), the natural resources exploration and development
company with assets in the Pacific Rim region, today provides a
quarterly update on matters relating to the development of its
Runruno gold-molybdenum project (the "Project") in the
Philippines.
AIM Code: MTL Summary:
At: 30 Sep 2018 The BIOX(R) circuit, after having established
Shares in Issue: 2,071,334,586 full operations early in the quarter,
Warrants: 100,000,000 was operated continuously at reduced
throughput rates to match the availability
Directors: of sulphide concentrate feed. No material
Ian Holzberger, Executive power issues were experienced during
Chairman the period. Unfortunately an error in
Guy Walker the software used in mine scheduling
Eduard Simovici caused the under-estimation of the volume
of waste to be removed, with the effect
Management: of delaying access into the ore positions
Ian Holzberger, Executive in stage 2 of the mine. As a consequence,
Chairman ore feed to the processing plant has
Liam Ruddy, Company Secretary been adjusted to compensate for the
Andrew Rodgers, CFO reduction in ore tonnages available
John Barnes, COO for processing. It is expected that
Ian Moller, GM Operations full processing operations will re-commence
(Acting) & Country in December.
Manager
Roland Taganas, Legal Mining Operations
Counsel * Overall mining operations continued to improve in Q3.
Tommy Alfonso, Financial
Controller
* The mine scheduling software error identified during
For further Information the quarter has been resolved, verified and
please contact: re-scheduling commenced.
Metals Exploration plc
Ian Holzberger: +61 41 * Ore production was restricted to around 70% of
888 6165 forecast due to the scheduling errors.
Liam Ruddy; +44 7904
200857
Andrew Rodgers; +61 412 * Tullingan waste dump is fully operational.
429 856
Nominated Adviser & Broker:
Canaccord Genuity Limited Processing Operations
Martin Davison; James * BIOX(R) operations have been stable throughout Q3 and
Asensio +44 (0) 207 523 4689 design criteria has been demonstrated.
Public Relations:
Tavistock * Throughput feed into BIOX(R) has been reduced to
Jos Simson; Barnaby Hayward below 65% to compensate for the restricted tonnage
+44(0) 207 920 3150 available and reduced sulphur in ore mix.
Finance
* Discussions are ongoing with current lenders and
external parties exploring possible ways to refinance
the Group's overall debt position.
* The Company remains in productive discussions with
its senior lenders seeking clarification on the
status of the grant of a waiver.
Production Summary
Key Metric Unit of Quarter Year to Period Period
measure ended 30 date 2018 to 31 Dec to 31 Dec
Sep 2018 2017 2016
Mining activities
Ore mined tonnes 367,385 1,129,229 1,815,669 490,558
Waste mined tonnes 2,418,393 5,689,822 7,644,821 7,920,205
------------- ---------- ----------- -----------
Total material movements 2,785,778 6,819,051 9,460,490 8,410,763
---------- ----------- ----------- -----------
Strip ratio waste/ore 6.58 5.04 4.05 15.15
Au grade mined grams/tonne 1.55 1.59 1.62 1.42
------------- ---------- ----------- -----------
Ctd(1) ounces
gold mined ounces 18,325 57,688 92,363 22,396
------------- ---------- ----------- -----------
S(2) grade % 0.62 0.81 0.82 0.29
------------- ---------- ----------- -----------
Processing activities
Tonnes milled tonnes 458,254 1,318,082 1,688,254 468,170
S(2) feed grade % 0.70 0.86 0.82 0.53
------------- ---------- ----------- -----------
Au feed grade grams/tonne 1.27 1.36 1.38 1.29
------------- ---------- ----------- -----------
Gold recovery % 75.3% 66.6% 47.9% 51.0%
------------- ---------- ----------- -----------
Gold poured ounces 11,665 34,617 36,006 8,166
------------- ---------- ----------- -----------
Gold sold ounces 10,522 35,353 35,697 6,489
------------- ---------- ----------- -----------
Notes: (1)Ctd = Contained (2) 'S' represents
the element Sulphur
Mining Operations
An overall improvement in the mine production performance over
the quarter was unfortunately overshadowed by the discovery of
errors in the software used to schedule the mining operations. The
scheduling errors manifested in the underestimation of the volume
of waste to be stripped from above the orebody in Stage 2 of the
mine. As a consequence, ore positions expected to be mined during
the second half of the quarter were not accessed as forecast
(announced by Regulatory News Service on 9 October 2018). It has
now been established that the errors in the software set-up caused
a class of waste material to be missed in the waste mining schedule
and an underestimation of the total volume of waste material to be
stripped to access the ore positions. The software errors have been
corrected and its function verified.
The life of mine operations are now being rescheduled with the
remainder of 2018 and 2019 completed. This work forecasts that ore
supply out of the mine will be restricted to around 70% of design
during October and November with full ore production scheduled to
resume in December and to be maintained during 2019.
The delay in accessing ore in Stage 2 of the mine, restricted
the majority of ore production to deeper levels in Stage 1 with
minor contributions from Stage 1.5 and limited high level Stage 2
ore positions. Stockpiled ore won in the early stages of the mine
were used to supplement the ore feed to the processing
operations.
The mid- life maintenance on the Company's Komatsu mine fleet is
ongoing and will be continued into 2019.
Process Plant
Full BIOX(R) operations were established early in the quarter,
with the circuit displaying flexibility and resilience in
operation. However, in response to the restricted ore supplies and
the mix of transitional to fresh ores consequential to the mining
issues, feed to the circuit has been limited for most of the
quarter. In management and to maintain the optimum circuit health,
the feed rate has been varied between 50-80% of design to match the
weekly forecast availability of the sulphide concentrate produced
from the flotation circuit. No power related issues have been
experienced during the quarter.
The restricted ore supplies available from the mine, a change in
the mix of transitional to fresh ore supplies and the requirement
to supplement those supplies with ore stockpiled from earlier in
the mine life required a modified operational focus in the
processing plant. Currently the plant is being fed at around 65% of
design rate with a near equal mix of transitional to fresh
ores.
It is forecast that full feeding of dominantly fresh ores will
be resumed in December at which time it is expected that on the
basis of the current health the BIOX(R) circuit will re-establish
full operations within the month.
Residual Storage Impoundment ("RSI")
Normal operations with the RSI build proceeding as planned and
the Tullingan waste dump is fully operational.
Occupational Health & Safety
The Runruno gold mine has maintained an impressive occupational
health and safety record. No lost time accidents have been reported
during 2018. The Company is fully committed to providing a safe and
healthy workplace for everyone in its operations.
Environment and Compliance
The operations maintained compliance with all environment and
regulatory requirements. No material incidents recorded. The
Runruno gold mine maintains very high environmental standards.
Community & Government Relations
Productive relations with both the community and the government
continue.
Finance (Unaudited)
-- 10,522 ounces of gold were sold during the quarter at an
average realised gold price of US $1,333.32 per ounce;
-- Interest payments of US $1.263 million were made to the senior lenders in the quarter;
-- Capital payment due to senior lenders on 29 December 2017, 29
March 2018, 30 June 2018 and 30 September 2018 totalling US $27.54
million have not been made and discussions are productive and
ongoing with the lenders on these payments;
-- The Company continues its discussions with financial lenders
to restructure the Group debt facilities;
-- Total interest-bearing liabilities as at 30 September 2018 were US $96.9 million;
-- Total short term shareholder loans included in the US $96.9
million as at 30 September 2018 were US $6.0 million; and
-- Cash at bank at 30 September 2018 was US $2.54 million.
The movement in cash balances during the quarter is summarised
as follows:
Cash movements & balances Quarter
(unaudited) ended 30
Sep 2018
US$M
Receipts from gold sales 14.029
Operating expenditure (15.639)
Short term loan facility
proceeds 4.000
Corporate costs/receipts (0.552)
Cash flows before finance
costs 1.838
Interest and financing costs
paid (1.263)
Gold hedge and interest rate
swap settlements 0.015
Net movement for quarter 0.590
Cash balance at start of
quarter 1.949
Cash balance at end of quarter 2.539
----------
The Company's discussions to obtain a waiver on the outstanding
capital payments have been productive with its senior lenders and
further information will be provided in due course.
- END -
Mr Ian Holzberger, a director of the Company, who has been
involved in the mining industry for more than 45 years, is a Member
of the Australasian Institute of Mining and Metallurgy and the
Australian Institute of Geoscientists, has compiled, read and
approved the technical disclosure in this regulatory
announcement.
Forward Looking Statements
Statements relating to the estimated or expected future
production, operating results, cash flows and costs and financial
condition of Metals Explorations, planned work at the Company's
projects and the expected results of such work are forward-looking
statements. Forward-looking statements are statements that are not
historical facts and are generally, but not always, identified by
words such as the following: expects, plans, anticipates,
forecasts, believes, intends, estimates, projects, assumes,
potential and similar expressions. Forward-looking statements also
include reference to events or conditions that will, would, may,
could or should occur. Information concerning exploration results
and mineral reserve and resource estimates may also be deemed to be
forward-looking statements, as it constitutes a prediction of what
might be found to be present when and if a project is actually
developed.
These forward-looking statements are necessarily based upon a
number of estimates and assumptions that, while considered
reasonable at the time they are made, are inherently subject to a
variety of risks and uncertainties which could cause actual events
or results to differ materially from those reflected in the
forward-looking statements, including, without limitation:
uncertainties related to raising sufficient financing to fund the
planned work in a timely manner and on acceptable terms; changes in
planned work resulting from logistical, technical or other factors;
the possibility that results of work will not fulfil
projections/expectations and realize the perceived potential of the
Company's projects; uncertainties involved in the interpretation of
drilling results and other tests and the estimation of gold
reserves and resources; risk of accidents, equipment breakdowns and
labour disputes or other unanticipated difficulties or
interruptions; the possibility of environmental issues at the
Company's projects; the possibility of cost overruns or
unanticipated expenses in work programs; the need to obtain permits
and comply with environmental laws and regulations and other
government requirements; fluctuations in the price of gold and
other risks and uncertainties.
For further information please visit or contact
www.metalsexploration.com
Ian R. Holzberger (Executive Chairman) +63 (0) 9189 795 992
+61 (0) 418 886 165
Liam A. Ruddy (Company Secretary) +63 (0) 918 979 2931
+44 (0) 7904 200857
Andrew Rodgers (Chief Financial Officer) +61 412 429 856
Nominated Adviser and Broker: CANACCORD GENUITY LIMITED
Martin Davison, James Asensio +44 (0) 207 523 4689
Public Relations: TAVISTOCK
Barnaby Hayward, Jos Simson +44 (0) 207 920 3150
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
DRLGIBDGUDDBGIU
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October 25, 2018 04:31 ET (08:31 GMT)
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