Gindalbie Metals shares slipped on the ASX today after the iron ore producer said it would need extra working capital to see out the end of the year, having run into more issues at its Karara project in the Mid West.
Gindalbie said today the Karara project’s processing facility was unable to run at capacity for extended periods, caused by restrictions in the process used to extract water from dry tailings.
The company said the tailings de-watering slurry system needed to be partially rebuilt to achieve the desired moisture content in the final tailings project.
Gindalbie said its subsidiary Karara Mining had identified a solution, which would take around three months to rectify the issue.
“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,” Gindalbie managing director Tim Netscher said.
“I emphasise this is specifically a tailings issue and is not related to the magnetite concentrating process.”
He said the concentrator would continue to operate at a reduced rate while the refurbishment is completed.
As a result of the issues, Mr Netscher said Karara Mining would need extra working capital above its estimates released in May.
The company said discussions were at an advanced stage with its funding partners regarding a potential solution.
At close of trade today, Gindalbie shares were down 10 per cent, at 13.5 cents.
