A Quick Look at Gold Producer, Millennium Minerals Limited

Millennium Minerals Limited (ASX: MOY), headquartered in Belmont, is an Australia based metals & mining sector player that is into the exploration & production of gold at its 100% owned Nullagine Gold Project situated in the Pilbara Region in Western Australia. The company sources gold production from the project from six mining locations. These centres are spread over a strike length of more than 40 k. Currently, the company mines from Bartons, which is now completely operational. The second mine is due for development in the third quarter of the year 2019.

The company released a presentation on 6 August 2019, under which MOY highlighted developments related to the Nullagine project. The company announced key growth initiatives that are ramping-up the project. The initiatives, which are sulphide plant expansion and underground mining, are focused on boosting head grade and recovery efficiency.

Let us have a broader look at these two initiatives. Before that let us travel through the company’s production during the month of July 2019.

Production Update for July 2019:

In the month of July 2019, the company produced 7,017 ounces of gold at its Nullagine mine compared with the production of 6,575 ounces in June 2019, according to a company announcement on 6 August 2019. The growth was attributed to ramp up of Bartons underground mine and Stage 1a sulphide plant expansion. For the past four months, the company has delivered increased production from the project.

Overall, in June and July, MOY produced 13,592 ounces of gold, which means that the company has met the required production hurdle of producing more than 13,500 ounces of gold set by major shareholder, IMC Group to release a further $ 5 million (third and final drawn-down) of funding from the mezzanine debt facility. The company has sent a notice to IMC for completing the draw down.

Source: Company’s Report

 

Sulphide Plant Expansion:

MOY is ramping the Stage 1 of the expansion of Sulphide plant to unlock large sulphide resource. The plant is planned to undergo expansion in three phases. The Stage 1a comprises of upgradation of concentrator and fine grinding circuit, which is now operational, and the company has delivered the production of first gold from sulphide ore in late June 2019. The company has achieved the concentrate grades of 3-6g/t Au from CIL tailings of ~0.3 0.4g/t Au and the gold recoveries are in line with the company’s expectations.

The second stage of expansion is Stage 1b. In this stage, the company would treat mill oxidation (INOX) with blended pyrite/arsenopyrite ore and the company expects commissioning in the third quarter or fourth quarter of 2019. The company has planned the installation of Stage 1b expansion (in mill oxidation INOX) to start in September 2019. The ability to apply the combination of ultra fine grinding, INOX and PINOX will provide the company with processing flexibility for the optimisation of recoveries and cash flow from different ore types. In the Stage 2 (third phase of expansion of Sulphide plant), the company would perform pressurised in mill oxidation (PINOX) for treating arsenopyrite dominant ore. The company projects commissioning for the stage 2 development in the fiscal 2020, which is however subject to mine schedule.

Sulphide Resources – Processing Breakthrough (Source: Company’s Report)

Moreover, during the initial production from the Sulphide plant, the concentrate grades were high, which will eventually decrease slowly during the ramping up. This is due to increase in the mass of concentrate for suiting the Ultra-fine grind milling capacity and both UFG mills operate simultaneously as per design. The expansion in the capacity of concentrate mass will lead to the improvement of gold retrieval. The company has already started feeding of stowed concentrate back into the circuit. It had planned to continue the feeding through the month of July 2019 until the stockpiled material gets finished.

Ramp-up of Bartons Underground:

Bartons, which is the company’s first underground mine at Nullagine, has a resource of 750,000t @ 4.1g/t Au for 99,400oz. The company got the mineralisation open at depth and along strike. All deeper holes at the mine have now successfully intersected the main ore zone. The company has completed the first phase of underground drilling and is currently targeting depth extensions. Meanwhile, Bartons Ore Reserve is now extending approximately 300 metres from the surface and is open at depth. The company is working on plans related to the second phase of depth and strike extension.

Bartons-The First Underground Mine at Nullagine (Source: Company’s Report)

Meanwhile, the company has revised its production guidance from 90 koz – 100 koz to 80 koz – 90 koz for 2019. Its other underground targets (pipeline of organic growth) involve the commencement of development of the Golden Gate mining centre in late 2019, with several other targets to follow.

Q319 Planned Activities: 

During the quarter ending September 2019, Millennium Minerals Limited would focus on concluding the ramp-up of the Stage 1a sulphide plant expansion as well as optimising mill throughput, grind size and circuit operating costs. It is expecting in-mill oxidation (INOX) to start in the later part of the concerned quarter, enabling MOY to treat higher levels of arsenopyrite-dominant ore.

The company expects nearly half of ore processed from sulphide ore sources over the remaining of 2019.

On 15 August 2019, the company appointed Mr Warren Hallam a veteran from the mining industry as its Managing Director and CEO, effective post the EGM on 27 August 2019. With this development, Peter Cash would step down as CEO culminating his four- and half-year service with Millennium. Mr Hallam is vastly experienced ranging from board to senior management roles in the mining industry, including publicly traded companies like Metals X Limited (ASX: MLX) and Western Mining Corporation. He holds a Master of Science – Mineral Economics, a Bachelor of Applied Science- Metallurgy and a Graduate Diploma in Business.

Stock Performance:

With a market cap of A$ 111.4 million and ~ 891.19 million outstanding shares, the stock of MOY was trading at A$ 0.125 on 15 July 2019(AEST: 2:31 PM), flat as compared to previous closing price. It has given a positive return of 13.36% and 2.04% in the last one month and three months, respectively, while the YTD return stands at a negative 27.78%.


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