Headquartered in Australia, Metro Mining Limited (ASX: MMI) is an emerging bauxite explorer and mining firm. The company’s flagship project is the Bauxite Hills Mine, which is one of the largest independent projects within world renowned Weipa Bauxite Region.
The company retains a total tenement package of around 1,900 sq. km on Western Cape York, while holding one of the chief thermal coal resources in Queensland’s Surat Basin.
In a recent update on the ASX, the company notified about Bauxite Hills’ production and shipping results for the month of September. Let us take a look at September production results below:
September Production Results – Bauxite Hills
Metro Mining informed that September month’s production results were the strongest since the commencement of operations at Bauxite Hills, resulting in a very successful quarter. The company observed robust production levels across all the areas in September, surpassing the levels of July and August.
Along with the production results, the company highlighted the following achievements:
- More consistency and consequently improved productivity were apparent across all aspects of the logistics chain.
- Excellent machine availabilities are benefiting mining and haulage.
- The barge loading facility is sustainable at greater levels.
- The shiploading rates have been backed by improved productivity and returning vessels that have previously performed vigorously.
Metro Mining provided the production and shipping guidance of 3.3 - 3.5 million Wet Metric Tonnes (WMT) for Bauxite Hills Mine for 2019.
Bauxite Hills 2019 Sales Review
In its recently released half-year report for the period ended 30th June 2019, the company reported a revenue from contracts with customers of $48.4 million, which was around 91 per cent higher than the revenue in the prior corresponding period. The company mentioned that the entire production during the period was sold to Chinese clients, with deliveries within contractual specifications.
The company will sell about 2.2 million WMT to Shandong Xinfa Import and Export Co., Ltd (Xinfa) during the calendar year 2019 under its foundation contract for the delivery of 7 million tonnes over the period 2018-2021.
Subsequent to the half-year, the company entered into a new binding agreement with Chinese Aluminum Group, which possesses Alumina Refineries in the provinces of Guangxi, Shanxi, Shandong and Guizhou. The contract covered tonnage of 420k WMT that is to be delivered in the second half of 2019.
About 90 per cent of the company’s 2019 potential production of 3.3-3.5 million WMT was successfully sold under the contract with the state-owned Chinese Group.
About Bauxite Hills Mine
The Bauxite Hills Mine is situated at about 95km to the north of Weipa bauxite region on Western Cape York in Queensland. It is a Direct Shipment Ore (DSO) mining operation, holding total Resources of 138.2 million tonnes and an estimated ore Reserve of 109.5 million tonnes.
The mining operations began in mid-April 2018 at the project, and just in its first year of operations, the company attained its 2018 production guidance by shipping 2 million tonnes to five different companies of China. The mining operations at the project are conducted only in the dry season: usually from April to December.
The company has planned to increase production to 3.5 million Wet Metric Tonnes in the calendar year 2019 and expand the operations to 6.0 million tonnes per annum (Mtpa) by the calendar year 2021.
The company has commenced a Definitive Feasibility Study (DFS) for potential production target of 2021.The DFS has a strong focus on transhipping and ship loading functions as well as marketing aspects. As per the company, the study will update the Reserve and Resource and renew the mine plan while also critically evaluating operations so far and allowing for any identified improvements to be assembled into the expansion plan.
While initially focusing on near mine opportunities for the project, the company is further investigating its tenement holdings in Cape York.
Metro Mining Managing Director and CEO, Mr. Simon Finnis, believes that the Bauxite Hills Mine is ideally placed to retain existing levels for the remainder of the operating year and is on track to meet the 2019 production and shipping target.
Stock Performance: MMI closed the trading session at $0.125 on 10th October 2019, with a rise of 8.7 per cent relative to the last closed price. The stock has delivered a substantial return of 297.5 per cent in the last five years.
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