Aureus defers declaring commercial production after last-minute plant problems

TORONTO (miningweekly.com) – TSX- and Aim-listed Aureus Mining has run into some last-minute commissioning trouble with the the gravity and carbon-in-leach (CIL) circuits of the New Liberty mine’s plant, in Liberia, resulting in a decision to defer declaring commercial production, despite having achieved the required criteria.

Aureus on Friday reported that the problems were related to plant recoveries, resulting in lower cash flows.

“…therefore Aureus does not feel it is prudent to officially declare commercial production at this point,” the company stated.

Aureus was looking at various options that were being systematically implemented to improve overall plant performance; the company expected that plant performance would improve to design levels by the end of the first quarter.

"The commissioning phase of New Liberty has brought some unexpected challenges. However, the recent progress being made and improved performance of the process plant are encouraging. I am confident that the various process improvements that our experienced operations team are systematically implementing will continue to improve the overall plant performance towards design specifications,” said president and CEO David Reading in a statement.

The comminution circuit, comprising the primary and secondary crushers and a ball mill, was now operating at design throughput capacity.

Aureus advised that mining operations at New Liberty were progressing, with fresh ore run-of-mine (RoM) stockpiles currently standing at 83 509 t at a grade of 2.78 g/t and oxide and transitional stockpiles of 75 248 t at a grade of 1.35 g/t.

The operation produced 17 172 oz in 2015, against a target of 27 000 oz; 3 663 oz of gold had been produced so far in 2016, said the miner.

To date, the New Liberty process plant had processed 386 262 t of RoM fresh sulphide ore and lower-grade oxide material resulting in 19 shipments of gold doré from New Liberty for smelting and refining at the MKS PAMP refinery in Switzerland, totalling 20 835 oz of gold.

The average achieved price for gold sold was $1 113/oz.

Aureus advised that, as a result of the plant problems, and its impact on cash flow, the company was in talks with its lenders about deferring the first debt repayment, which was scheduled for the end of this month, as it did not have enough cash resources available to pay both the first debt repayment and continue to make payments to suppliers as they fell due.

It expected that revenue generated from future gold output would ensure that suppliers continued to get paid and that operations could continue at New Liberty.