«Level 3 256 Adelaide Terrace Septimus Roe Square Perth Western Australia 6000 Australia PO Box 3074 East Perth Western Australia 6892 ASX RELEASE ...»
Aditya Birla Minerals Limited
Aditya Birla Minerals Limited
ABN 37 103 515 037
256 Adelaide Terrace
Septimus Roe Square
Western Australia 6000
PO Box 3074
Western Australia 6892
T: +61 8 9366 8800
F: +61 8 9366 8805
For the Quarter ended 30th June 2015
For Further Information
Aditya Birla Minerals Limited Neel Patnaik – Managing Director Shanti Dugar – Chief Financial Officer Peter Torre - Company Secretary Telephone +61 8 9366 8800 Facsimile: +61 8 9366 8805 Email: firstname.lastname@example.org
ADITYA BIRLA MINERALS LIMITEDFirst Quarter Ended 30th June 2015 Highlights The Company advised during the quarter that a contractor had died from fatal • injuries he received in an accident in the Nifty underground mine. The Board was deeply saddened by the news and the thoughts and prayers of the Company remain with the family of the deceased.
On sequential basis for the quarter compared to previous quarter:
• Nifty Ore mined decreased by 7%. Ore mined during the quarter was 329,253 tonnes. The unfortunate fatal accident at the Nifty underground mine on 11 May 2015, subsequent mining restrictions under a Prohibition Notice issued by the Department of Mines and Petroleum (DMP), and a higher percentage of ore being remotely bogged due to draw point control measures as per DMP’s advice have impacted the ore mining rate during the quarter.
Nifty Ore processed during the quarter was 355,254 tonnes, a decrease of 1%.
Nifty Copper production during the quarter was 5,831 tonnes, an increase of 24%.
Birla Mt Gordon Operations (BMGO) continued to remain under Care and • Maintenance (C&M) since April, 2013.
The Company had a balance of cash and cash equivalents of $53.07 million as at • 30 June 2015 with a further $21.05 million (classified as trade and other receivables in the balance sheet) in a security deposit against finance facilities.
As announced on 29 July 2015, an additional amount of $28.787 million is being • placed into a security deposit as per terms of new Finance Facilities, with total cash as at that date of approximately $20 million and total funds placed as a security deposit of $49.834 million.
There was no Copper production during the corresponding quarter in 2014 as a result of the suspension of mining operations at Nifty as a consequence of the unforeseen sinkhole incident and BMGO being under C&M.
Cash and Cash equivalent / Security Deposit The Company had a balance of cash and cash equivalents of $53.07 million as at 30 June 2015. In addition to this, a security deposit of $21.05 million exists as at 30 June 2015 as security against finance facilities from the bank accounted as for as ‘trade and other receivables’.
As reported in an ASX release dated 29 July 2015, the Company has refinanced its financing facilities through the Australia and New Zealand Banking Group Limited (“ANZ”). The new facilities consist of Standby Letter of Credit or Guarantee Facilities (“SBLC Facilities”) totalling AU$58 million and a Trade Finance Loan Facility of US$ 10 million. Pursuant to the terms of the new SBLC Facilities, the Company is required to place a security deposit with the bank equivalent to the amount of the facility limit utilised. In compliance with these terms, the Company places a total of AU$49.834 million (an additional $28.787 million from prior security deposits) into interest bearing security deposits with the bank with varying maturity dates.
Subsequent to placing the funds on security deposit as mentioned above, the Company’s unencumbered cash position is $20.0 million (appox) as at 29 July 2015.
Strategic Review As previously advised, the Company's Board of Directors has resolved to undertake a review of the Company's strategic options with a view to maximising value for all shareholders (Strategic Review). The Strategic Review will consider corporate and operational strategies, and include a review of ownership options available to the Company. The Company is in the process of evaluating various proposals from Corporate advisors to assist with the Strategic Review process.
The Company will continue to operate as usual during the Strategic Review, and will keep shareholders advised of any material developments as the Strategic Review progresses.
20 2.0 15 1.5 10 1.0 5 0.5 0.0 0
The Company advised during the quarter that a contractor had died from fatal injuries he received in an accident in the Nifty underground mine. The Board was deeply saddened by the news and the thoughts and prayers of the Company remain with the family of the deceased.
Counselling services were made available to affected workmates and other employees and have been extended to family and friends.
Nifty remained committed and continuously focused on safety practices. During the quarter, Nifty operations recorded a Lost Time Injury (LTI) frequency rate of
2.5 compared with metalliferous UG industry average of 2.7.
Environment All environmental obligations have been complied with.
Mining and Production
Nifty Sulphide Operation Ore production was 329,253 tonnes at 1.78% Copper Grade in the current quarter. Ore processed was 355,254 tonnes and copper production was 5,831 tonnes. Copper recovery was 92.34%.
As informed in an ASX Release dated 12 May 2015, the Nifty underground mining operations were suspended due to the unfortunate fatality mentioned above.
Subsequent restrictions were put in place under a Prohibition Notice issued by the DMP.
Subsequent to the lifting of the Prohibition Notice, the mining rate was impacted by a higher percentage of ore being remotely bogged due to draw point control measures as per advice of DMP.
As informed in an ASX Release dated 16 July 2015 the Company advises that total copper production from the Nifty operations for the full year to 31 March 2016 is now expected to be in the range of 24kt – 27kt.
Nifty Oxide Operation The Nifty Oxide operations continued to be under care and maintenance.
Metallurgical bulk samples were prepared from 2014 and 2015 RC drill samples.
The bulk sample has been sent to an overseas laboratory for the stage - 1 metallurgical test work. The metallurgical test work is underway.
Costs The mining and processing cost during the quarter was A$95.86 per tonne of ore mined and processed as against A$105.25 during the previous quarter. The cost was lower by 9% due to various cost reduction initiatives implemented resulting in substantial savings in costs during the quarter.
The total site cash cost at Nifty for Q1 FY16 was A$32.46m as against the previous quarter A$37.40. This does not include Tc/Rc, transportation and royalty costs. The site cost guidance (excluding Tc/Rc, transportation and royalty costs) for Q2 FY16 is in the range of A$33-A$36m.
Safety During the quarter, there were no loss time incidents at BMGO.
Environment The net reduction to the water balance in the Esperanza pit from April to June 2015 was 11ML. The application to amend Esperanza Pit Mandatory Reporting Level (MRL) was successful and new Environmental Authority (EA) issued with Pit MRL amended to 217.5RL, with DSA 204RL. Consequently Court Order No 3267 of 2013 has become dormant.
Production The Mt Gordon operations continued to remain under care & maintenance during the quarter.
Costs The total care & maintenance cost at Mt. Gordon for Q1 FY16 was A$1.45m.
Strategic Review The Company continues to review non-binding offers for BMGO and will move to finalise any option which delivers the most value to shareholders. The Company continues to engage ANZ Corporate Finance to assist with this process.
Exploration Activities Nifty Copper Project The Nifty and Maroochydore Copper Projects lie approximately 300km and 400km respectively south-east of Port Hedland.
This figure shows the current sulphide mineralisation at Nifty with locations for future mineral resource upgrade drilling.
Nifty and Maroochydore Exploration No field exploration activity was undertaken on mining and exploration tenements.
A desktop study was undertaken to improve our understanding of the geological setting, controls to mineralisation, enrichment processes and to assess all historic data for untested areas of copper anomalism between the oxide deposit and the Coolbro Anticline southwest of the deposit.
A new metallogenic interpretation of the entire Nifty and Maroochydore drilling database was completed which resulted in the delineation of three regional scale corridors defined by predominance of copper, lead-zinc and copper-gold metal associations.
Based on the recent metallogenic interpretation at Nifty and Maroochydore tenements the Company is reviewing the current tenement status and has surrendered the following tenements which are not within the metallogenic zones.
E45/3405, E45/3406, E45/3407, E45/3629, E45/3761 and E45/4023.
These tenements do not contain any material which forms part of the current mineral resource inventory nor any identified prospects.
Mt Gordon Copper Project The Mt Gordon Copper Project is located in northwest Queensland approximately 120 km north of Mt Isa.
Mt Gordon Project Location Plan The Mt Gordon copper deposit locations, including the location of the most recently identified high grade H Lens mineralisation, are shown in the figure below.
Mt Gordon Exploration No field exploration activity was undertaken on mining and exploration tenements.
A regional prospectivity model was developed by the interrogation, interpretation and assessment of the geological, geochemical and geophysical database over the entire regional tenement area.
In this environment the criteria critical to the development of economically significant, structurally hosted copper resources include well-defined soil, rock, radiometric and electromagnetic conductors occur within 5-15 km from the mine site within prospective zones that have undergone only minor drill-testing.
In the highest priority areas a good correlation exists between copper in soils, copper occurrences, presence of copper weed and radiometric anomalism.
Electromagnetic anomalies are also present in some areas but it is unclear whether these are formational (carbonaceous shales) or sulphidic responses.
Drill Max ppm and Cu Soils on Prospectivity Plan Market Outlook In the backdrop of subdued commodity market, Copper prices also remain stressed and are currently prevailing in the range of US$ 5200-5500/MT. The price has fallen sharply in last few weeks on the concerns of slowdown in Chinese growth, which accounts for ~ 40% of world’s total copper consumption, and slow recovery in Europe. The fall in price is in spite of LME copper inventories remaining at low levels. Copper fundamentals appear to be supportive of range bound LME in the short term. However downside risks from the macro economic factors still persist.
Aditya Birla Minerals (ASX: ABY) is a copper mining company in Australia with operations in Western Australia and Queensland. ABY is currently conducting copper mining at the Nifty Copper Operations located in the Great Sandy Desert, Western Australia. The Mt Gordon Copper Operations near Mt Isa, Queensland is currently under care and maintenance.
Copper concentrates produced from its copper mines are shipped to Hindalco Industries Limited’s (Hindalco) copper smelter in India. Hindalco is a member of the Aditya Birla Group, one of India’s largest industrial conglomerates.
Hindalco has a 51% shareholding in ABY and is Asia’s largest integrated aluminium producer and growing copper producer.
Both Aditya Birla Minerals and Hindalco have a reputation for efficient copper operations, providing copper investment opportunities that exceed and extend mining capabilities.
Aditya Birla Minerals has a team of highly skilled mining and copper exploration industry professionals, each adhering to the Company’s values: commitment, integrity, speed, seamlessness and passion.
Competent Person’s Statement The Information in this report that relates to exploration results is based on information compiled by Sean Sivasamy, a Member of the Australasian Institute of Mining and Metallurgy, who is a full time employee of Aditya Birla Minerals Limited (ABML). Mr Sivasamy have the necessary experience relevant to the style of mineralisation, the type of deposit and the activity undertaken to qualify as a ‘Competent Person’ under the JORC Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (2012 Edition). Mr Sivasamy has given his consent to the inclusion of the material in the form and context in which it appears.
The information in this report that relates to Mineral Resources for the Nifty, Mt Gordon and Maroochydore deposits is based on and accurately reflects reports prepared by Mr Peter Ball and Mr Sean Sivasamy from 2013 to 2015.
Mr Ball is a member of the Australasian Institute of Mining and Metallurgy (CPGeo) and Mr Sivasamy is a Member of the Australasian Institute of Mining and Metallurgy. Mr Ball and Mr Sivasamy have the necessary experience relevant to the style of mineralisation, the type of deposit and the activity undertaken to qualify as a ‘Competent Person’ under the JORC Code for Reporting of Mineral Resources and Ore Reserves (2012 Edition). Mr Ball and Mr Sivasamy have given their consent to the inclusion of the material in the form and context in which it appears. Mr Ball is Principal of DataGeo Geological Consultant (an independent geological consultancy). Mr Sivasamy is a full time employee of Aditya Birla Minerals Limited (ABML).
The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce the Ore Reserve. In all Resources tables, significant figures do not imply precision. Figures are rounded according to JORC Code guidelines.