Consolidated Minerals has announced its updated Resources and Reserves Schedule as at 30 June 2007.
The updated manganese resource inventory at Woodie Woodie, after mining depletion, is 15.42 Mt at 41.5% Mn (previously 15.84 Mt at 41.8% Mn). Manganese ore reserves have increased by 175,328 t to 8.71 Mt at 41.5% Mn.
The updated resource inventory for the Kambalda Nickel Operations is 1.98 Mt at 3.7% Ni for 73,300 t of contained nickel, reduced from 2.09 Mt at 3.8% Ni for 78,560 t of contained nickel. The total reported ore reserves at Kambalda have been reduced by 6,770 t of contained nickel to 10,141 t (contained) nickel.
The company is continuing to review the resources and reserves for the Widgiemooltha Nickel Operations (including the Carr Boyd deposit), which was previously quoted by Titan Resources at 129,000 t of contained nickel. An updated Resource-Reserve schedule for Widgiemooltha will be provided in due course.
As part of an ongoing review of operations and technical standards, a revised methodology for calculating resources and reserves, involving the refinement of input parameters and mine designs, has been adopted at all the company’s operations.
Commenting on the 2006/2007 results, Managing Director, Rod Baxter, said: “We are pleased with the financial and operational turnaround for the Company, which positions the Company for an exciting period of growth.”
“Unlike many other resource companies, through much of FY2007 we did not benefit from soaring commodity prices, with only a marginal (4%) increase in received manganese prices seen during the year and nickel prices constrained by existing hedging positions,” he said. “The turnaround in our financial performance was driven by a combination of cost containment, increased investment in improving our businesses and productivity improvements.”
“The Company is well placed to capitalise on the improving prices and opportunities for each of its core business units and will also have the financial capacity to unlock new growth opportunities.”
The manganese business is expected to benefit from much higher prices in FY2008, with recent price increases leading to prices as high as $7.50/dmtu CIF for August-October 2007, reflecting tightening of the global market.
“With a targeted increase in manganese production of up to 5% and some A$20 million of new capital investment budgeted for FY2008, we are encouraged by the prospects of being able to capitalise on our position as a premium supplier to world markets,” Baxter commented. The cost control evident in FY2007 is expected to be maintained in FY2008, with any increase in unit costs driven largely by increased sales royalties.
The nickel business will continue to be a key growth area, with production in FY2008 targeted to increase by up to 50% over FY2007 levels. Unit costs are expected to remain comparable with those achieved in FY2007. Development work for the Twin Decline Exploration project at Kambalda is expected to commence shortly. Significantly, the company’s first new mine development at Widgiemooltha has commenced.
The chromite market continues to be underpinned by Chinese stainless steel production and it is expected that the chromite business will continue to contribute to the strong operational cash flow of the company as steady state production of chromite is maintained in FY2008.
“We have budgeted A$23 million for exploration across the company for FY2008, mostly on manganese and nickel, which highlights our commitment to increasing our resource portfolio to support long-term growth,” Baxter added. “With our core production businesses experiencing a positive market outlook, Consolidated Minerals is well placed to enjoy a strong year in FY2008.”