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NQ Minerals Plc

NQ Minerals Plc Hellyer Gold Mines Pty Ltd realised sales of A$23million

NQ Minerals Plc (NEX: NQMI), a mineral processing, exploration and mining company today announced its first half production and operating results for the six month period ended June 30, 2019.     

Hellyer Gold Mines

NQ Minerals saw improved plant performance and output in the second quarter (“Q2”) compared to the first quarter (“Q1”), and a continuing positive trend is forecasted for the third quarter.  H1 production was as follows:

Concentrate Output – 2019 H1

Reconciled ProductionQ1Q2H1
Lead (Pb) Concentrate4,712 t5,452 t10,164 t
Zinc (Zn) Concentrate3,015 t4,416 t7,431 t
Pyrite Concentrate18,488 t28,375 t46,863 t

During H1 (unaudited), its 100% owned subsidiary Hellyer Gold Mines Pty Ltd realised sales of A$23m, Gross Profit of A$7m and an Operating Profit of A$3.6m.  The current financial results anticipate a positive trend for the second half (“H2”) of 2019. 

Processing Throughput and Availability

Combined plant and dredge availability, including both planned and unplanned maintenance, shut downs and process upgrades averaged 91.7% (in line with the Company’s 92% internal forecast target). The average throughput of processed tailings was 98.7 tonnes per operating hour (“tpoh”) (ahead of the Company’s 89 tpoh internal forecast) translating into a total mill tonnage for the period of 392kt (ahead of the Company’s 360kt internal forecast).

Base Metal Recovery and Concentrate Grades

During the period production emphasis was placed on concentrate grades and metallurgical recovery was managed to realise these qualities.

·    Pb grade in Pb concentrate averaged 36.92% (37% forecast) with 760 g/t silver and 5.4 g/t gold.

·    Zn grade in Zn concentrate averaged 43.9% (45% forecast) with 225 g/t silver and 2.3 g/t gold

In general, H1 base metal recoveries were lower than forecast and this reflects the challenges of fine grind flotation resulting from both the underlying mineralisation and the initial grind and regrind operations used to ensure effective liberation.

Actual recovery results for H1 were as follows:

·    Pb recovery to Pb concentrate averaged 33.2% (steady state forecast 47%)

·    Zn recovery to Zn concentrate averaged 28.3% (steady state forecast 37%)

However, these average values mask a trend of continued improvement over the period. This trend indicates an improvement in recovery for lead of 1.9% per month and for zinc of 2.4% per month. A continuation of these trends will see forecast recovery performance achieved during H2.

During July, recovery improvements were realised with current (August) ‘month to date’ figures yielding an increase in lead recovery to 41.9% (off a forecast 47%).  As of August 12th the daily actual recovery was 49.4%, whereas current zinc recovery month to date is 29.5% (off a forecast of 30%), with daily actuals currently at 43.5% off a forecast zinc recovery of 28.63%.

In large extent these improvements were due to increased familiarity with the flotation processing characteristics of the tailings and adaptation of specific plant operating conditions to these characteristics.

While the flotation process currently employed at Hellyer broadly replicates the flow sheet used for processing of the originally mined ore, the flotation characteristics of the tailings differ due to factors such finer particle size; particle oxidation; and feed pH, as well as their variability. The latter two factors (pH and oxidation) are, in major part, a result of the recent tailings storage conditions.

The immediate focus in respect to recovery performance is on enhancing short cycle adaptive control in respect of each of these factors. In December 2018 & February 2019, high intensity conditioners were incorporated into the lead circuit to improve fine particle conditioning.

Medium to longer term initiatives to improve metallurgical performance will consider:

·    Active management of particle oxidation;

·    The potential for separate size flotation;

·    The potential for complimentary separation techniques including multi-gravity separation.

Pyrite/Precious Metal Recovery and Concentrate Grades

Pyrite production performance received a lesser focus of management attention during the period as resources were focussed on the higher (per tonne) value base metal concentrates. Furthermore, as pyrite is produced in the final stage of the sequential float process strong metallurgical performance of pyrite flotation is predicated on effective performance of the prior base metal circuits.

Sulphur grade in pyrite concentrate averaged 43% (45-48% forecast) with 136g/t silver and 3.8g/t gold. Overall mass recovery of tailings to pyrite was 14% (50% forecast) as the result of only running the pyrite flotation circuit in product recovery mode for part of the period.  NQ Minerals is exploring further enhancements to its sales from pyrite through its initial investments in Tasmania Energy Metals (TEM). 

Loan Refinancing

In March 2019, discussions commenced to enable the refinancing of acquisition and project start-up debt secured over the Hellyer assets. This refinancing reflects Hellyer’s transition to an operating status and the opportunity to reduce interest costs and better align the maturity of financing with operating cash flows.

Due diligence in this regard proceeded with a detailed technical and operation review at the Hellyer site during the July with commercial discussions are ongoing.

General Manager Appointment

Mr Phil Stirling joined Hellyer in the capacity of General Manager. Phil has extensive experience in the operation and management of mineral processing business on a global basis (Australia, S America and Africa). During his career he has worked for Vale, BHPBilliton, MMG and WMC.

Complementing a strong technical background Phil has proven competence in initiating and sustainably delivering operational improvement.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.