Gindalbie Metals (ASX: GBG) has ramped up production from its Karara Project joint venture in Western Australia with a target to achieve the nameplate 8 million tonnes per annum (Mtpa) iron ore in July 2013.
Gindalbie is partnering with Ansteel (50%), which is China’s second-largest steel maker and biggest iron ore producer.
Commissioning of the final two components of the Karara Concentrator, the polishing circuit and the tailings circuit continues.
Two thirds of the polishing circuit has been commissioned and is operational, resulting in improvements in magnetite concentrate grade of up to 65% Fe. Full product specification of 68% Fe is expected to be achieved with the completion of the floatation circuit.
Shipments are continuing with 57 completed to date for 3.4 million tonnes since start-up in October 2012, comprising 2.7Mt of Direct Shipping Ore (46 shipments) and 700,000t of magnetite concentrate (11 shipments).
In the March 2013 quarterly, Gindalbie said that four trains per day are currently running between Karara and the Karara Export Terminal at Geraldton.
At the Karara Export Terminal, trains are regularly being unloaded in less than two hours. The Karara shiploader is performing to expectations and has demonstrated the capacity to achieve the target ship loading rate of 5000 tonnes per hour.
Karara is located 200 kilometres east of Geraldton
Forecast working capital requirements
As the project has not achieved commercial production levels or declared cash-flow positive, the slower than expected shipping schedule will have an impact on the forecast working capital requirements of the joint venture company Karara Mining Limited (KML).
KML is currently working on a number of potential funding solutions to assist with short term working capital requirements and has completed a $US44 million magnetite concentrate prepayment agreement with Ansteel and is working to progress further prepayment agreements.
At 31 March 2013, the Company had cash reserves of $41.05m.
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