PERTH (miningweekly.com) – Iron-ore developer Gindalbie Metals on Monday reported that the Karara project would require more funding as operator Karara Mining worked to re-engineer the tailings dewatering slurry system at the project.

Gindalbie told shareholders that construction of the nine key areas of the Karara concentrator had been completed and, while the individual areas had successfully operated at design rate, the ramp-up and optimisation programme had identified restrictions in the process that is used to extract water in the dry tailings dewatering system.

This has limited the plant’s ability to produce at nameplate capacity for sustained periods, the miner said.

The tailings dewatering slurry system needed to be re-engineered, Gindalbie said, to achieve design moisture content in the final tailings product, which would allow the tailings filtration circuit to operate at design throughput.

This engineering solution would likely take three months to complete and implement, the company estimated.

“We now have sufficient operational experience with the concentrator to confirm that all of the main components of the plant operate well and that the magnetite production process itself works as expected,” said Gindalbie MD Tim Netscher.

He noted that while the re-engineering work took place, the concentrator would continue to operate, albeit at a reduced rate.

“Karara Mining has also decided to reduce the magnetite concentrate product grade during this period to 62% iron. This will allow us to better manage the tailings system, while the solution is being implemented. Once fully tied in with the other areas of the Karara concentrator, we can ramp up the production rate,” said Netscher.

He noted that the reduction in concentrator throughput had resulted in Karara Mining re-estimating its working capital requirements through to the end of the year, adding that discussions were now progressing with Chinese banking partners on suitable funding solutions to fund this additional capital requirement.

Gindalbie’s share price declined by nearly 7% on Monday, with the company’s shares trading at a low of 13c a share.