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Friday, 12 April 2013
Orvana Minerals ends Bolivia mine strike; sees ongoing improvements ahead
Orvana Minerals (TSE:ORV) has quickly put a stop to a strike at its Don Mario open pit mine in Bolivia, where it is processing the copper-gold-silver Upper Mineralized Zone. The work stoppage lasted less than 24 hours and full production has already resumed.
The strike was reported on Thursday and was related to union demands for certain payments alleged to be owed to employees with respect to two periods between 2002 and 2012. The payments were not part of the labour agreement at those times, the company said.
"Orvana is pleased to have resolved the strike quickly with minimal disruption. The operation started ramping up yesterday afternoon and reached full production last night," said interim president and CEO Michael Winship, who stepped into the role after previous chief executive Bill Williams resigned last week.
Winship told Proactive Investors Friday that short disruptions are fairly normal with unionized operations.
"We treat it as a small bump in the road and keep moving. We expect to see good operational performance from the mine going forward."
Indeed, the company is focusing on improving operations at its Bolivia mine, as well as its flagship El Valle-Boinas/Carles (EVBC) gold-copper mine in northern Spain.
"We are ramping up production at EVBC and improving our grade situation. Operational improvements are ongoing."
Specifically, the interim chief, who has more than 30 years of experience in the mining industry and a background in mine operations and development, says the focus will be on the sequencing of stopes and dilution control, with work also designed to improve recoveries from both underground extraction and the mill.
"A number of technical improvements are underway at both of our mines, with this being our ongoing focus to drive increased cash flow," says Winship.
The company is also focused on advancing its Copperwood copper project in Michigan, where it recently was granted the key Wetlands permit - moving it one step closer to advancing the property to a production decision.
"The permit de-risked the project, and we are now looking at some enhancements to the feasibility study," Winship explains, adding that the next key milestone for the property will be to secure financing.
In February, Orvana announced it swung to a profit in its fiscal first quarter as revenue more than doubled on a sharp rise in production at its mines from a year earlier.
Cash flow provided by operations before changes in working capital was $8.2 million in the quarter.
Looking ahead, the company will look to increase cash flow from operations as a means to pay down debt, with work on this front "progressing reasonably well", says Winship.
Winship joined Orvana's board in early March, along with Ed Guimaraes. Stonecap Securities analyst Christos Doulis recently took note of the fact that both executives bring "considerable operating experience" to the company, saying the miner's recent focus on strengthening its team is geared toward the development of its Copperwood project.
"While Orvana’s working capital still concerns us, we believe that operations at EVBC and Don Mario have hit their stride and that cash flow from operations should be sufficient, albeit tight, to meet Orvana’s debt repayment obligations," the analyst said in a research report on Tuesday.