Australian miner New Century Resources released its quarterly activities report for the three months ending 30 June 2020. Operations delivered a significant production increase and lower costs, while due diligence continues at the Goro Nickel and Cobalt Mine in New Caledonia.
New Century posted a record 34.4kt zinc in concentrate produced in the June quarter, a 21 per cent increase in metal production over the previous quarter. The increased metal production was the largest factor in the successful reduction of C1 costs – a 17% decrease to US$0.79/lb., the lowest achieved since operations restarted.
Hydraulic mining operations delivered 2.46Mt at 3.09 per cent zinc in the June quarter, representing a 17 per cent increase in quarterly mining rate for the operations (March quarter was 2.10Mt at 2.93 per cent zinc). Average zinc recovery was 45.3 per cent for the June quarter versus 45.9 per cent in the March quarter.
Patrick Walta, managing director of New Century Resources, said: “New Century is pleased to have again delivered record production and lower costs from the Century operations. We have now declared commercial production, with Century re-established as a top-10 zinc producer just three years since being shut down for closure.
“Focus for the operations remains on increasing metal production and further lowering unit costs, providing a solid platform for EBITDA growth in the September quarter and beyond,” he said.
Mr Walta noted that the improving macro conditions in the zinc market “provide strong momentum for New Century, as the business remains highly leveraged to zinc macro-economic conditions.” There has been a significant drop in spot treatment charges (US$315/t down to <US$200/t) during the quarter), and the recent rise in zinc prices from its four-year low of US$0.82/lb. in March to now over US$1.00/lb.
During the quarter, the company entered into exclusivity for a 60-day period (mutually extended to 8 September 2020) with Vale Canada to complete due diligence and negotiate the terms of the potential acquisition by New Century of 95 per cent of the issued shares in Vale Nouvelle-Calédonie S.A.S., which owns and operates the Goro Nickel and Cobalt Mine in New Caledonia.
In regards to the agreement Mr Walta said, “The process has successfully outlined a logical and technically robust solution to simplify the operations, allowing for improved production and lower costs. Commercial negotiations to date have delivered an indicative Term Sheet including a substantial financing package for the funding of the simplification plan activities and general working capital of the operation.
“Subject to finalisation of due diligence and confirmation of the conditional financing arrangements, New Century anticipates progressing to a decision on making a binding offer for Goro within the September quarter,” he concluded.