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Lumwana to produce 170,000 tons this year

Lumwana to produce 170,000 tons this year
Written by Kabanda Chulu
Monday, May 11, 2009 11:40:14 PM

LUMWANA Mining Company (LMC) has projected to produce 170,000 tonnes of copper metal in concentrates this year at the average operating cost of US $1.15 per pound.

And Equinox Minerals, Lunmwana’s holding company, has secured a US $25 million debt facility with FMO Development Funding Institution of Netherlands that would be channeled towards with the development of Lumwana town.

Releasing financial results for the quarter ending March 31 2009 and the expected outlook for the year, Equinox Minerals president Craig Williams last week stated that 23,966 tonnes of copper metal was sold during the quarter.

“During the quarter, 2,877,141 dry metric tonnes of ore producing 57,085 dry metric tonnes of concentrate at an average copper grade of approximately 39 per cent were produced at Lumwana and concentrate deliveries of 63,063 dry metric tonnes were sold to local and international off-takers containing a combined copper metal content of 23,966 tonnes,î Williams stated. ìAs anticipated, the Lumwana has not yet reached ëcommercial productioní and as a result, all copper sales, revenue and operating costs have been capitalised for the first quarter of 2009 but subject to final assessments and we expect that the Lumwana Mine will achieve commercial production from the commencement of the second quarter of 2009.”

Williams stated that Lumwana expected to produce 170,000 tonnes (375 million pounds) of copper metal in concentrates at the average operating cost of US $1.15 per pound for the year.

He stated that abnormally heavy rainfall in March negatively impacted the Lumwana mine, causing the mining and processing operations to be suspended on a number of occasions during the month.

“Within one 24-hour period, an estimated 120 mm of rainfall fell, representing about 10 per cent of the yearís average rainfall with a total of 440mm falling within a 30 day period. This event equated to a greater than one in 100 year incident, occurring within three months of starting the commissioning phase of the mine. Overall, this wet season has been reported in Zambia as being the wettest in 40 years,” Williams stated. “As a consequence, the ramp up of both mine and process operations was interrupted in March, but resumed by the end of the quarter and we continue to have an objective of completing Lumwana ramp up to full production by mid-2009.”

Williams stated there were significant opportunities at the Lumwana project to expand and optimise the concentrator and mine throughput rate and to assess and evaluate the additional near mine deposits discovered to date.

He stated that Equinox had also completed the uranium feasibility study (UFS) investigating the onsite treatment of discrete and high grade uranium mineralisation contained within the Lumwana copper pitshells.

On 14 April 2009, government through Zambia Development Agency (ZDA) approved the establishment of Multi Facility Economic Zone (MFEZ) within the Lumwana Large Scale Mining that would create an investment zone to attract both local and foreign businesses.

“Together with ZDA approval, it is anticipated that government will undertake to support the Lumwana MFEZ by giving explicit protection to Equinox’s cornerstone investments at Lumwana and will also undertake to promote and maintain new and existing investment agreements for businesses within the Lumwana MFEZ,” Williams stated.

The principle of MFEZ developments were incorporated through the ZDA Act of 2006 and its main objective is to catalyse industrial and economic development in the manufacturing sector to enhance domestic and export oriented business.

On the dispute with Zesco Limited over electricity charges, which is in the Lusaka High Court, Williams expressed optimism that the matter could be resolved in a reasonable manner.

Lumwana has since obtained a protective relief action in response to the Notice of Termination initiated by ZESCO and the matter was heard in the Lusaka High Court on March 17, 2009 and again on April 6, 2009 and has subsequently been adjourned by the Lusaka High Court to May 27, 2009, to allow the parties further opportunity to conclude negotiations.

Apart from developing the mines, LMC is also developing the Lumwana town development and with over 500 houses completed to date while commercial and retail developments were advancing and a self-sustaining modern town environment was being developed.

“To support this unique development the Company has established the Lumwana Property Development Company (LPDC) to act as a special purpose vehicle to own and manage the new Lumwana town. LPDC has secured US $25 million debt facility with Nederlandse Financierings-Maatshappij voor Ontwikkelingslanden N.V. (FMO), which is the Dutch government development funding institution, to cover some town infrastructure costs. Drawdown of this facility can commence once Equinox meets a number of conditions precedent,î stated Williams.

Equinox Minerals is an international mining and exploration company with dual listing on the Toronto Stock Exchange and the Australian Securities Exchange.

The Company is focused on operating its flagship and 100 per cent owned Lumwana Copper Mine in Zambia. The Lumwana copper mine is expected to produce an average of 172,000 tonnes per year of copper metal contained in concentrates for the first six years of its 37 year mine life.

Labels: COPPER, EQUINOX, LCM, LUMWANA MINING COMPANY

posted by MrK @ 10:42 PM