Western Areas share price jumped 4.81 per cent on news the company's mine production has doubled in the June quarter and that it hopes to declare a final dividend next quarter.
Western Areas share price jumped 4.81 per cent on news the company's mine production has doubled in the June quarter and that it hopes to declare a final dividend next quarter.
At 11.00am Western Areas shares had risen 20 cents to $4.36.
In a statement Western Areas said that combined nickel production from its Flying Fox and Spotted Quoll mines rose from 3,210 tonnes in the March quarter to 8,610 tonnes in the June quarter.
The company said that it reinforces the potential for further production upgrades at Forrestania.
In the company's quarterly activity report, Western Areas said it had $65.3 million cash and $15.5 million receivables at the end of the June quarter.
In addition, the in situ metal value of ore and concentrate in stockpiles at current prices was approximately $112 million.
These stockpiles are subject to plant recoveries, processing, smelting and refining costs and carry a cost based value of $22.5 million.
The Company said it was also targeting to be in a position to declare a final dividend for the full year ended 30 June 2010 during the September quarter.
However, Western Areas said could not comment on the timing or size of any potential
dividend until the middle of August when the financial year end accounts have been completed and audited.
See full company statement below:
Combined mine production from the Flying Fox and Spotted Quoll mines doubled from 3,210 tonnes (7.1M lbs) nickel in the March Q 2010 to 6,810 tonnes (15M lbs) nickel in the June Q 2010. This is a significant achievement for any mining company and reinforces the potential for further production upgrades at Forrestania.
Half the combined mine production for June Q was achieved during the month of June.
Flying Fox mined a total 36,870 tonnes ore at 4.2% nickel for 1,560 tonnes (3.4Mlbs) nickel in June (72% above budget) and Spotted Quoll (in its first full month of production) mined a total 18,930 tonnes ore at 8.1% nickel for 1,520 tonnes (3.3M lbs) nickel in June (69% above budget).
The reconciled cash cost for the month of June was US$1.82/lb nickel in concentrate, a record low for the Forrestania Project to date.
Increased mine production coincided with the completion of construction and successful commissioning of the Stage Two concentrate plant in June. The plant now has a capacity for 550,000tpa ore and is designed to meet the sustained production target of 25,000tpa nickel from Flying Fox and Spotted Quoll.
June Q Highlights
1. Record production from Flying Fox mine with 91,437 tonnes mined at 4.0% nickel for 3,697 tonnes (8.1M lbs) nickel.
2. Record production from the Tim King Pit at Spotted Quoll with 46,258 tonnes mined at 6.7% nickel for 3,113 tonnes (6.9M lbs) nickel.
3. Record milled production with 83,639 tonnes ore treated at 4.5% nickel to produce 3,303 tonnes (7.3M lbs) nickel in concentrate.
4. Reconciled cash costs for the June Q were US$2.22/lb nickel, 11% below long term guidance targets of US$2.50/lb nickel.
5. Current stockpiles of 5,188 tonnes (11.4M lbs) nickel in ore and concentrate should make a significant contribution to profits in the December half 2010.
6. Transport of concentrate in containers to Esperance Port is well advanced with the first shipment to Jinchuan expected to leave around 25th July.
7. Total Ore Reserves at Spotted Quoll and Flying Fox (excluding Lounge Lizard) are currently 3.3Mt @ 4.7% nickel for 153,640t (339M lbs) nickel.
8. Significant new disseminated nickel zone discovered 200m north of New Morning deposit. Drilling now testing for high grade sulphides below granite.
9. Ongoing drilling in the Finland joint venture has confirmed widespread nickel/ zinc/copper sulphide mineralisation of similar type to Talvivaara Mine.
September Q Targets
- Declaration of final dividend for the year ended 30 June 2010
- Sustained high grade production from Tim King Pit and Flying Fox
- Completion of feasibility study for the Spotted Quoll underground mine
- Further drilling results from New Morning and Spotted Quoll extensions
Western Areas had A$65.3M cash and A$15.5M receivables at the end of the June Q.
In addition, the in situ metal value of ore and concentrate in stockpiles at current prices was ~A$112M at the end of the June Q. These stockpiles are subject to plant recoveries, processing, smelting and refining costs and carry a cost based value of A$22.5M.
