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Millennium further tweaks Nullagine gold mine plan, cuts FY'19 output guidance

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Millennium further tweaks Nullagine gold mine plan, cuts FY'19 output guidance

Millennium Minerals Ltd. re-optimized the mine plan for its Nullagine gold mine in Western Australia after a review identified two key factors for a production shortfall in the March quarter compared to guidance.

The company said May 24 that it addressed the issues; however, full-year production guidance is now revised to 80,000 ounces to 90,000 ounces at an all-in sustaining cost of A$1,370 per ounce to A$1,450/oz.

The previous forecast stood at 90,000 ounces to 100,000 ounces at all-in sustaining costs of A$1,300/oz to A$1,375/oz.

Millennium noted that production for the first half will be restricted to 34,000 to 36,000 ounces, but will improve in the September and December quarters. Output in the second half is estimated at 46,000 to 54,000 ounces.

Production was mainly impacted by startup delays for stoping activities and higher than planned dilution at Bartons underground mine, and a six-week delay in construction and commissioning of the stage one sulfide expansion project at Nullagine.

The company noted that underground production at Bartons is back on track following changes to the mining sequence and introduction of additional mining equipment and personnel. The ore now being sourced from four stoping fronts on two levels.

Meanwhile, first gold production from the stage one sulfide plant expansion is on-track for late June.

Millennium also secured a A$20 million term-loan facility from its major shareholder, IMC Group, for 18 months, with A$10 million expects to be drawn-down before May 31.

The loan will be used as interim working capital during the ramp-up of the Bartons underground mine and the sulfide plant expansion.

The facility will accrue interest at 13.5% per annum and expire Dec. 31, 2020.