Falls in commodity prices and rapidly changing market conditions have prompted two Perth miners, Minara Resources Ltd and Kagara Ltd, to explore cost cutting measures.
Falls in commodity prices and rapidly changing market conditions have prompted two Perth miners, Minara Resources Ltd and Kagara Ltd, to explore cost cutting measures.
Minara said it is further investigating cost reduction options after its first implemented a restructuring of operations over the last six months.
The reduction overview comes as the spot nickel price recovers slightly, up 7 per cent to $US9826 per tonne on the London Metal Exchange, however is well off its highs of some $US51,000 reached last year.
Over the past six months, the company has implemented a range of cost cutting measures including reducing the size of its workforce, cutting capital project work, initiating a lower cost mining plan and reducing the use of sulphur at its Murrin Murrin operation.
Adding to Minara's favour is the recent collapse of the price of sulphur, used to process nickel, to below $US100 per tonne.
"This will assist in reducing Minara's cost of production," Minara said in a statement.
"It should also be noted that the overall impact of the decline in the nickel price has been partially offset by the decrease in the AUD:USD exchange rate."
Minara added that the company is still investigating longer term funding arrangements using either debt and or equity.
"Whilst we are in a challenging period of a turbulent commodity market, and nickel has certainly been affected, we believe in the mid to longer term that prices will stabilise and then return to a more favourable outlook," chief executive Peter Johnston said.
"Because we started restructuring the business six months ago, we have already achieved real and substantial cost savings.
"Through we have made substantial progress, because of the prevailing market conditions, we are continuing to explore additional ways to reduce costs and these will be progressively implemented during the quarter."
Further comment from Mr Johnston was being sought at time of publishing.
Minara's share price jumped 23 per cent to an intraday high of 43c before cooling to close at 38.5c.
Meanwhile West Perth-based miner Kagara Ltd has initiated a review of its operations and expenditure after a deterioration in commodity prices.
The company said it was conducting a review of capital, operations, development and exploration expenditure to optimise its cash flows and profits.
Kagara, however, said its copper and zinc operations in North Queensland continue to be cash flow positive at today's metal prices.
The company said the results of the review would be released on Thursday, October 30.
Shares in Kagara closed down 18c or 24 per cent to 56c.
