New Century Resources has emerged from the September quarter with zinc recovery on the up after mechanical issues in the ball mill circuit at its North West Queensland site.
At the same time managing director Patrick Walta said macro-economic conditions for the industry were improving, providing strong tailwinds for the venture.
Zinc metal production at Century was flat at 33,633 tonnes for the September quarter.
The company said production growth was tempered by mechanical issues in the ball mill circuit (which were now rectified) and a planned maintenance shutdown over four days.
Rectification of ball mill circuit performance had seen zinc recovery rates increasing over the month of September to 48 – 50 per cent (continuing in December quarter).
Further improvements were underway, with an independently verified flowsheet optimisation program outlining a low-cost pathway to achieve consistent performance of up to 12Mtpa at 50-54 per cent recovery, the company said.
Net sales receipts increased 38 per cent to $74 million, with an adjusted EBITDA of $13.2 milllion for the September quarter.
“New Century has achieved solid operational cashflow and zinc metal production for the September quarter,” managing director Patrick Walta said.
“It is particularly pleasing to see the strong quarterly exit rate, with
recoveries and production rising due to resolved mechanical issues within the ball mill circuit.
“The company continues to focus on increasing metal production and lowering unit costs, which will drive further growth in EBITDA and cashflow in the December quarter and beyond.
“Macro-economic conditions for the industry continue to improve, providing strong tailwinds for New Century, with the zinc price rising above US$1.13/lb for the first time since the onset of COVID-19.
“In addition, spot treatment charges have plummeted to US$110/t, their lowest level since Century operations restarted.”
These improving conditions were underpinned on the demand side by strong post COVID-19 zinc consumption in China, he said.
Meanwhile challenges remained on the concentrate supply side, with mine production around the world reduced due to restrictions on human movement.
“The company sees opportunity for further improvement in the zinc price, with demand/consumption set to return in countries other than China as a result of infrastructure-focused stimulus packages in response to the COVID-19 economic downturn,” Mr Walta said.