Magellan halts lead mining, processing

Magellan Metals has stopped all mining and processing in the wake of its lead contamination scare at Fremantle port.

Over the weekend, the State Government placed a stop order on all Magellan lead transport after lead particles were found in the sealed containers used to cart bags of lead through to the Fremantle port.

Now, Magellan's company Ivernia has announced Magellan will cease its operations until the outcome of a Department of Environment and Conservation inquiry is known.

A skeleton staff will oversee the shut-down of Magellan's mine near Wiluna, while the rest of the company's staff are being advised to stay home on full pay.

Magellan has also advised most contractors and suppliers that their services are not required for the time being.

Ivernia chief executive Alan De'ath said that Magellan would retain its current workforce so that operations could resume as quickly as possible once the stop order is lifted.

"We appreciate their (staff) loyalty and commitment as we continue to work towards fulfilling the requirements set out by the Minister for Environment to allow the resumption of transport of lead carbonate from the Magellan mine."

Investigations so far have found no evidence of lead contaminants outside the containers in which they are transported.

A team from DEC has spent the last two days conduction swab tests on all Magellan containers currently at the port of Fremantle.

The last shipment of Magellan lead from Wiluna arrived in the harbour-side town yesterday as it was already in transit when the stop order was announced.

Magellan contractor MACA said it had received word from the company declaring a force majeure.

MACA said Magellan was its smallest project by monthly revenue and it did not expect the suspension of activity to have any bearing on its future earnings.

See Ivernia's complete statement below:

Ivernia Inc is providing a further update on recent events in regard to the temporary cessation of transport operations by its wholly-owned subsidiary Magellan Metals Pty Ltd at the Magellan Mine, located near Wiluna in Western Australia.

Due to the current uncertainty surrounding the timeline to recommence shipments, the Company is commencing a temporary shutdown of mining and processing operations. Magellan Metals has also commenced the process of sending notices of force majeure to its suppliers, where appropriate. The mining and processing operations will be shutdown in a safe and thorough manner, such that operations can recommence rapidly once the stop order is lifted.

A small crew of employees will be kept at site to conduct the shutdown and ensure the integrity of the plant. The remaining Magellan Mine employees are being asked to stay at home and will be eligible for full pay and entitlements. Magellan Metals plans to retain its workforce intact to ensure that operations can be restarted rapidly when the order is lifted. Its ability to do so will depend on the duration of the shut down and when the order is lifted. Contractors at the Magellan Mine have also been informed that, in most cases, their services are not required during the temporary shutdown.

Alan De'ath, President and CEO of Ivernia commented: "Since the resumption of operations earlier this year we have built up a strong and experienced workforce at the Magellan Mine. It is important that we retain our overall team ready for a prompt restart as soon as possible after the Order is lifted. We appreciate their loyalty and commitment as we continue to work towards fulfilling the requirements set out by the Minister for Environment to allow the resumption of transport of lead carbonate from the Magellan Mine".

The temporary shutdown of mining and processing will commence immediately and follows the cessation of transport from the mine announced in an Ivernia news release of Dec. 31, 2010 and updated in an Ivernia news release of January 3, 2011. The key facts to note about this issue are:

- Container monitoring results clearly indicate no public risk. Airborne lead levels in sealed
containers are very low and are well below occupational health levels established by the
Australian National Occupational Safety and Health Commission,

- There is no evidence that any of the sealed bags containing lead carbonate from the Magellan
Mine have been damaged during loading or transport, and

- Extensive sampling of nearly 300 individual monitoring and sampling sites along the transport
route from the Magellan Mine near Wiluna through, to, and within the Port of Fremantle has
shown no trace of lead from the Magellan Mine in the environment since transport operations
commenced in September 2009.

Additionally, the Minister for Environment; Water of Western Australia announced on January 4, 2011 that no elevated lead levels were discovered as a result of recent testing by the Department of Environment and Conservation in the storage area used by Magellan Metals at Fremantle Port.
The temporary shutdown of mining and processing will be re-evaluated on a weekly basis or at more frequent intervals, as required.