MMG unlikely to meet Dugald River development schedule
PERTH (miningweekly.com) – Hong Kong-listed base metals miner MMG has warned of a delay in the development of the Dugald River zinc/lead/silver mine, in Queensland, as the company has to investigate alternative mining methods.
MMG had planned to ship its first concentrate from Dugald River in the fourth quarter of 2015, but said in its third-quarter production report, released on Monday, that this schedule was unlikely to be met.
The company explained that initial findings of a project review – announced in September – had indicated that alternative mining methods were required for Dugald River. MMG said it would undertake additional analysis to further optimise the mining methods.
“The MMG board will consider the final review, and the results from the trial ore processing in making an investment decision on the Dugald River project,” the company stated.
In September, MMG deferred most of the surface work activities at Dugald River, including bulk earthworks, the construction of a permanent accommodation camp and a A$290-million engineering, procurement and construction contract with project house Forge Group to allow the company to complete the review.
Dugald River has a mineral resource of about 53-million tons, at 12.5% zinc, 1.9% lead and 36 g/t silver. The mine is expected to process an average of two-million tons a year of ore initially, to produce between 200 000 t to 220 000 t of zinc concentrate, between 27 000 t and 30 000 t of lead in concentrate and about 900 000 oz of silver a year.
As of June, MMG had sole funded some A$390-million of the Dugald River project, with the miner securing a $1-billion finance facility from the China Development Corporation and the Bank of China.
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