Mirabela output slumps

Mirabela Nickel has reported a 14 per cent drop in nickel production for the March quarter as the cash strapped company seeks to undertake a complex restructuring.

Mirabela said it produced 2,938 tonnes of nickel concentrate for the three months ending March, down from 3,433t in the December quarter.

The produciton results represent a 14 per cent decline compared to the December period and a 30 per cent drop from the 2013 March quarter when the company produced 4,152t of nickel concentrate.

During the recent March period, the company said it was able to stick to its mine plan, which was revised down late last year, of mining 25 million tonnes of material annually throughout 2014 and 2015.

Mirabela said despite “challenging operational and business conditions”, including low availability and productivity of heavy machinery, low nickel grades and impacts on plant performance due to maintenance requirements, it was still able to mine 6.1mt of ore.

A 35 per cent jump in the average realised nickel price to US$6.07 per pound failed to offset rising C1 cash costs, which increased 20 per cent to US$7.29/lb during the March quarter.

The Perth-based company’s sole producing asset is the Santa Rita nickel mine in Brazil.

Mirabela announced in February that it would seek to complete a complex restructuring to recapitalise the company.

The plan involved placing the company into administration, raising new capital and implementing a debt-for-equity swap.

At the time Mirabela said it had the support of the ‘ad hoc group’ of lenders who hold US$395 million in unsecured notes, and appointed KordaMentha partners Martin Madden, Cliff Rocke and David Winterbottom as voluntary administrators.

Earlier this week, Mirabela cancelled forced leave for 350 employees, which was due to take effect today, after receiving a recommitment from its lenders that they would provide funding support.