Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London.
Wednesday, 17 July 2013
Orvana suspends LPF plant operations at UMZ
Orvana Minerals Corp. (TSE:ORV) announced Wednesday, via its wholly-owned subsidiary, Empresa Minera Paititi, the suspension of operations of its leach-precipitation-flotation (LPF) plant at its UMZ deposit in Bolivia for the foreseeable future, as a consequence of market conditions and other factors.
As a result of the suspension, management of the Toronto-based gold and copper producer says it expects to record a pre-tax impairment charge of approximately $6.5 million for the third quarter of fiscal 2013 relating to the copper-gold-silver Upper Mineralized Zone (UMZ) mine. The company expects to be able to complete a final impairment assessment by the release of its third quarter results.
Orvana, a multi-mine producer with assets in Spain, Bolivia and the U.S., cited the costs of consumables for the plant and labour, which have increased substantially since start-up of the plant, as well as the fact that recoveries and maintenance of LPF oxide feed “have been inconsistent and more recently have been well below forecast”, according to a company statement released with the announcement.
In addition, the statement says that the lithology of oxide ores processed has resulted in a recent increase in the consumption of acid used in processing, all of which means the LPF campaigns are significantly higher in costs than the flotation-only campaigns on a unit cost per tonne basis. Finally, metals prices, both current and projected long-term, are lower than were previously forecasted.
The statement went on to say that the company will continue to process transition ores, which include both copper in oxide minerals and copper in sulphide minerals, by a flotation-only process. The acid plant and other process areas of the LPF plant will be mothballed.
The company is to move its focus for the UMZ mine to optimizing the flotation process, with additional metallurgical and engineering testing on alternate methods of oxide treatment underway, according to its statement. Tests have been conducted recently to determine whether oxides can be processed by flotation-only using different reagents, with positive preliminary results from bench tests already in hand.
Orvana reiterated its focus remains on optimizing operations and increasing cash flow.
The news comes only days after Stonecap Securities analyst Christos Doulis maintained his outperform rating and $1.00 price target on Orvana, citing the company being on track to meet its production guidance for the year.
Production in the third fiscal quarter from the company’s primary asset, the El Valle/Boinas-Carles gold-copper Mine in northern Spain, was a record 18,500 ounces of gold, 1.9 million pounds of copper, and 58,800 ounces of silver, up significantly from the previous quarter’s production of 16,800 ounces of gold, 1.5 million pounds of copper and 41,800 ounces of silver.