Nickel prices continued to decline through FY2016, reaching a 14-year low in the March 2016 quarter. In response, the Company executed a staged and controlled wind-down of its operations and ceased production in February 2016. The nickel mines are now on care and maintenance at a cost that is sustainable over the long term.
Bankable-level feasibility studies were subsequently completed at Durkin North and Miitel/Burnett. The results cement the core of Mincor’s future nickel option, and provide a clear path back to production once nickel prices recover.
The two studies outline a base production potential from reserves of some 28,200 tonnes of nickel metal (refer to ASX Announcement dated 10 March 2016 - click here). Mincor’s Nickel Ore Reserves increased by 89% over the June 2015 position, to 28,200 tonnes of contained nickel, their highest level in nearly five years.
The Company has allowed the controlled partial flooding of the Miitel mine until the water level approaches the main pumping station. Mincor has the option to commence dewatering, based on engineering calculations, in early FY2017 before the main infrastructure in the mine is flooded. Underground inspection thus far has confirmed the water level rises are broadly in line with expectations.
The Care and Maintenance Plan for Miitel and Mariners nickel mines was submitted to the DMP. Surface works completed in line with the plan include the securing of site infrastructure from unauthorised entry and clean-up and general environmental management as per the Prescribed Premise Licence.
All of Mincor’s nickel is marketed through long-standing offtake agreements with BHP Billiton (Nickel West). Mincor’s ore is processed via a tolling arrangement with BHP Billiton (Nickel West) at the central Kambalda Mill, and the resulting concentrate sold to that company. These offtake agreements have been in place since 2001 and expire in February 2019.