Millennium Minerals has announced it would update its production guidance in October following recent delays in open-pit mining approvals and production at its Nullagine gold project.
The company said delays in ramp-up earlier this year were due to unplanned dilution and reduced availability of underground mining equipment and personnel at the Bartons underground mine and at the sulphide plant.
Recent results from an optimisation study initiated in June have confirmed the potential to enhance operational performance and improve cash flow.
The review found that 80,000 ounces per annum was the optimum production rate for the Nullagine mining and processing operation, based on sustainable operating parameters.
However, Millennium said it would not make-up the production shortfalls incurred in previous quarters.
As a result, annual production guidance for the calendar year was revised to between 70,000oz and 75,000oz, previously between 80,000oz and 90,000oz.
Production for the September quarter is expected to be 18,000oz and will increase to the optimum 20,000oz in December.
Millennium managing director Warren Hallam, appointed to the role last month, said the updated guidance reflected a conservative and sustainable approach to the mine plan.
“Having now spent some time at site, I am encouraged by the strong fundamentals of the Nullagine project in terms of the quality of infrastructure, the people on site and the enormous exploration upside in the field,” he said.
“My first priority will be to optimise our existing production base and implement the outcomes of the strategic operational review … (and) reduce the cost base and introduce a number of other operating efficiencies.”
Millennium said it would focus on cost-reduction measures to help offset the impact of lower production costs, including a switch to an owner-operator business model for open pit mining and haul productions next month.
With mining under way at Bartons underground, the company said it would also continue its focus on reducing unplanned dilution.
