Boseto Copper Operation, a Discovery Metals Limited (DML) owned mine, suffered a decrease in performance in the last few months.
In the review - covering the period from October 1, 2014 to the last day of the year - the company blamed various factors which contributed to the decline in performance.
During that period, the company lost an excavator due to dire incident, something which halted production at the mine. The progressive decommissioning of the Zeta open pit, which was the mine’s main source of higher grade sulphide ore, is also singled out as another influential factor in the uninspiring performance.
Also contributing is the adoption of a low strip ratio mine plan towards the end of the quarter in order to align with plans to place the operation into “care and maintenance” before the 30th of June this year. Boseto Copper Mine produced just above 5000 tonnes of copper in concentrate; by contrast a 13 percent decrease from the previous period.
Also in comparison to the previous quarter, there is a decrease in total material mined as the 7.6 Mt material mined meant there was a decrease of 19 percent whereas there was a three percent decrease in high grade sulphide recovery. Lower material movement performance is said to be a result of the loss of the excavator due to fire as well as major component change work on another digger for a full month.
“This had negative impact on the progress to expose additional ore faces, hence adversely affecting quality ore delivery,” the company said.
DML, an Australian copper explorer, takes solace in the fact that it maintained its positive safety performance. As a way forward, the company intends to focus on effectively executing the new mine plan aimed at putting the operation into care and maintenance by June this year to ensure that production and revenues from the operation are maximised within this time period.
Financial performance wise DML experienced increased costs. Cash costs per pound of copper production increased by close to 60 percent from the previous quarter. According to the report, there were two primary drivers for the increase. First the blame lies on the 13 percent quarter on quarter decrease in copper in concentrate produced and secondly, during the last quarter $9.6 million of Plutus Stage 2 overburden waste stripping costs were capitalised to the balance sheet in accordance with applicable accounting standards.
In the current reporting period, DML announced that the first ore from Plutus stage was achieved and the cost capitalised during the quarter was significantly less. Overall, the mining productivity at Boseto declined during the last three months with 19 percent reduction quarter on quarter in total material moved. Further, the company says mining costs which grew by 18 percent as a result. The decrease in productivity is linked to delays and costs associated with fire incident which damaged one digger and other costs arising from unscheduled repairs to other digging equipment.
Generally, total Boseto site operations were flat quarter on quarter; that is before waste stripping adjustments. The poor performance at Boseto operations has had an impact on the confidence of investors on DML which is dual listed on both Australia Stock Exchange (ASE) and Botswana Stock Exchange (BSE). This week DML share price traded at 14 Thebe.