New Century Resources has met a milestone at the Century mine in Australia – 500,000 tonnes of zinc concentrate delivered since operations restarted in late 2018.
The company, which said it is anticipating an improvement in zinc prices from a boost in global demand as of late, will be making the most of the improved market by securing a zinc price hedging programme.
Set to extend through the end of the 2021 fiscal year, it will secure contracts with a guaranteed floor price of US$1.20 per pound, or US$2,645 per tonne. That will include 100% of its sales in the March quarter and half of its sales in the upcoming June quarter.
“The hedging of zinc at a guaranteed floor price of US$1.20/lb. captures strong tail winds within the industry (December ’20 quarter average zinc price was up 12% quarter-on-quarter to US$1.19/lb.), with New Century expecting to deliver material growth in its adjusted EBITDA for the December ’20 quarter compared to the reported A$13.2 million for the September ’20 quarter,” the miner said.
Managing Director Patrick Walta called the production and shipping milestone a significant achievement and spoke to his outlook on zinc.
“The company sees strong potential for zinc price upside, given the continued demand from growth within China and the likely near-term improved demand around the world as infrastructure-focused government stimulus packages are rolled out,” Walta said.
“This demand is in contrast to continued global supply challenges, with traditional underground miners facing additional operational difficulties in improving production while also implementing social distancing and Covid-19 mitigation practices.”
The Century mine is located in Lawn Hill, about 250 kilometres northwest of Mount Isa and the Lowe Gulf of Carpentaria, Queensland.