Mincor going back to its nickel roots, selling gold mine
WA stalwart Mincor wants to sell a struggling gold mine to focus on its Cassini nickel discovery.
West Australian nickel industry stalwart Mincor Resources has put its struggling gold mine on the auction block, saying the diversification into gold was not delivering enough cash to justify the time spent on running the project.
Mincor told shareholders it intends to get back to its roots and focus on bringing into production its Cassini discovery in WA’s rich Kambalda nickel province, and plans to offload its Widgiemooltha gold mine if a buyer will meets its price.
Mincor’s quarterly activities report, released today, shows Widgiemooltha barely washed its face in the period, delivering 7570 ounces of gold - produced at an average all-in sustaining cost of 1698/oz and sold for $1836/oz.
Widgiemooltha only poured its first gold last July, when Mincor thought the mine would deliver enough cash to fund its nickel exploration program.
But a review of its operations by new boss David Southam showed the mine had delivered 15,200 ounces less than planned, because grade control drilling had failed to pick up variations in the orebody.
Mincor said the review meant it was likely to be forced to downgrade the ore reserves at Widgiemooltha, which currently stand at about 72,000 ounces.
The company did not put a price of the mine, but recent transactions have valued at reserve ounces about $US223 ($317) an ounce, according to MinesOnline, a mining project selling website.
Mincor said Widgiemooltha was consuming a “disproportionate” amount of management time and resources.
Instead the company will refocus on its core nickel business. Mincor stitched up an offtake deal with BHP Billiton’s Nickel West for product from its mothballed Kambalda mines last month, and upgraded the resources at its new Cassini discovery yesterday.
Mincor finished the quarter with $10.8m in cash.