Millennium dampens forecast

Millennium Minerals will take on more debt after revising production guidance at its Nullagine gold project to include increased costs and lower output.

In a statement, Millennium said it had reached an in-principle agreement for a $20 million mezzanine debt facility from its major shareholder, IMC group, to provide interim working capital while the ramp-up of both the Bartons underground and the sulphide plant expansion are completed.

It said delays in the ramp-up were due to unplanned dilution at the underground operation.

It also blamed a reduced availability of underground equipment and personnel.

“This is an issue which is being experienced across the industry and reflects a tightening market for labour and equipment supplies in the WA mining sector,” Millennium said.

As a result, annual production guidance for this calendar year was revised from between 90,000 and 100,000 ounces, to 80,000 and 90,000oz.

Millennium chief executive Peter Cash said the shortfall in production would be restricted to the March and June quarters.

“Based on our guidance, production for the first half will be restricted to 34,000 and 36,000oz,” he said.  

Its all-in sustaining costs are now anticipated to be in the range of between $1,370 and $1,450/oz, compared with $1,300 and $1,375/oz previously.

Shares in Millennium were trading at 11 cents each at 12.30pm AEST, a fall of 8.33 per cent from its previous close.