Mount Gibson shipped a total of 1.76 million wet metric tonnes in the September quarter, a 52% increase on shipments in the June quarter reflecting a catch up of shipments from Koolan Island and the successful commissioning of the Company’s upgraded export facilities at Geraldton Port.
Ore tonnes mined were lower at 1.64 million tonnes, as were total ore tonnes crushed at 1.93 million tonnes, compared to 2.2 million tonnes and 2.08 million tonnes respectively in the preceding quarter.
This largely reflected reduced mining rates at Extension Hill due to the build-up of stockpiles caused by Mid West port and rail constraints in the June half of 2012, tighter working areas in the final stages of the pit at Tallering Peak and higher waste stripping at Koolan Island.
weighted average realised fines price achieved by Mount Gibson during the September quarter was USD 110 per dry metric tonne Free on Board (FOB). The September quarter average Platts CFR price (where the iron ore supplier pays freight costs) for 62% Fe fines delivered to China was USD 113/dmt.
Koolan Island
Ore shipments from Koolan Island during the September Quarter were 53% above the previous quarter, reflecting some catch up on the lower shipping levels of the previous quarter.
Ore production was 42% lower and crushing was 30% lower than the previous quarter, reflecting decisions to increase waste stripping due to a build-up of post-crusher stockpiles of standard product in the previous quarter due to stronger ore production in the period.
At the end of September, these post-crusher stockpiles totalled approximately 670,000 tonnes of standard product. A further 160,000 tonnes of direct shipping ore was stockpiled ready for crushing. In addition, a parcel of mineralised waste was crushed in the quarter, and the first shipment was despatched in mid October.
Mining of ore from Mullet Pit advanced satisfactorily as did mining of waste in Main Pit. Installation of the high capacity pontoon pumps in the Main Pit in preparation for the wet season has commenced. The final clay topping for the seawall was installed, and pouring of the concrete slab for the new workshop commenced.
Mid West Operations
The September quarter was one of consolidation for Mount Gibson’s operations in the Mid West. Commissioning of the Company’s upgraded port and rail facilities at Geraldton Port was completed during the quarter, with the new rail unloader formally handed to the Geraldton Port Authority on achieving practical completion on 10 September.
The upgraded port facilities effectively double Mount Gibson’s nominal export capacity from Geraldton to approximately 6 million tonnes per annum.
The upgrade integrates a new dual-wagon common user rail unloader with Mount Gibson’s new Berth 5 Storage Facility, which has an ore storage capacity of 240,000 tonnes, and with the Company’s existing 120,000 tonne Berth 4 Storage Facility.
Rail availability also improved substantially as the third party upgrade of regional rail infrastructure for other mining projects moved closer to completion.
Tonnes railed from the Company’s Mid West mines to Geraldton port totalled 940,000 tonnes, a 33% increase on the preceding quarter. Total tonnes shipped from Geraldton during the quarter increased by 51% to 976,000 tonnes.
All major works for the regional upgrade are now complete, and the rail provider has indicated Mount Gibson will be able to fully utilise its contracted capacity by the end of October.
Extension Hill Hematite Mine
Ore mining for the September quarter totalled 530,307 tonnes, 26% lower than in the June quarter. This reflected the planned reduction in mining and crushing rates from July due to full utilisation of stockpiling areas at both the Extension Hill mine site and at the Perenjori rail siding. As indicated previously, this build-up of stocks was the result of port and rail constraints in the calendar year to date.
At the end of September, over 500,000 tonnes of standard product was stockpiled at the mine, either crushed or ready for crushing, and over 600,000 tonnes of crushed standard product was in stockpiles at the Perenjori rail siding.
Rail availability improved significantly during the quarter as the third party rail upgrade for other mining projects moved closer to completion. Tonnes railed to Geraldton port increased by 72% to 527,659 tonnes. A total of 469,493 tonnes of lump and 116,440 tonnes of fines were exported in the quarter.
Tallering Peak
Total material movement for the quarter was 15% below the previous quarter due to a reduction in production as the pit became smaller and clean-up work was undertaken around the slip area.
Ore mined was 5% higher than the previous quarter and in line with expectations as ore was exposed following the development of the southern cutback.
Radar monitoring of the southern pit wall continued during the quarter and no significant movement was reported. Further ground supports and geotechnical measures have been taken to stabilise the southern pit wall as mining progresses. Extension Hill Sept-11 Dec-11 Mar-12 Jun-12 Sept-12 Total Qtr Qtr Qtr Qtr Qtr 2012-13 000's 000's 000's 000’s 000’s 000's
Mining
Rail haulage was slightly above the previous quarter as stocks were drawn down from railhead stockpiles. Stockpiles of crushed standard product at the Mullewa rail siding totalled 290,000 tonnes at the end of September, with a further 178,000 tonnes at Geraldton port.
Shipping improved during the quarter and included two shipments of low grade lump material.
Exploration continued at the T1 prospect throughout the quarter. More detail on exploration progress at T1 is contained Exploration section of this report.
Mount Gibson Chief Executive Officer Jim Beyer said Mount Gibson’s improved operating performance in the September quarter was encouraging. However, decisive business optimisation measures were also necessary in light of the currently volatile market conditions. He said that “It is encouraging that iron ore prices have firmed in the past week or two, and we remain confident in the long term outlook for iron supply to Asia. However, the immediate market outlook remains uncertain. In these circumstances, the only prudent course of action is to implement comprehensive measures that control costs and enable our operations to remain cash positive across the price cycle, including the low points. The initiatives we have announced today will maximise our cash flow and preserve our financial capacity in volatile and challenging conditions. Nonetheless, it is always a difficult decision to reduce your workforce, and we will be providing as much assistance as we can to those people affected by the changes we have announced today.”
Source - Mount Gibson
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