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NQ Minerals nearing production at flagship Hellyer mine in Australia

Production at Hellyer is expected to begin in the fourth quarter

Gold
NQ is aiming for initial output of 700,000 tonnes per year at Hellyer

NQ Minerals PLC (LON:NQMI) expects to hit the ground running when production begins at its flagship Hellyer polymetallic mine in Australia later this year.

The mining company aims to begin production at the wholly-owned project, located on the west coast of Tasmania, in the fourth quarter after completing refurbishment of the Hellyer plant.

Chief executive Roger Jackson told Proactive Investors he estimates an initial output of 700,000 tonnes per annum (tpa) before building up to 1mln tpa next year.

Revenue is forecast to reach US$705mln for the nine-year life of the project.

Marketing and off-take agreements 

Ahead of the start of production, the group’s subsidiary Hellyer Gold Mines Pty Ltd entered into two marketing and off-take agreements with Traxys Europe S.A. for the sale of all lead and zinc concentrates from the mine.

The agreements will cover the first five years of concentrate production and NQ said they will give Hellyer access to Traxys's “extensive global network and experienced marketing and distribution team for base metal concentrates”.

READ: NQ Minerals opens Hellyer Gold Mines to high-powered delegation ahead of production restart

NQ also agreed a US$10mln secured prepayment facility with Traxys. The miner said the facility will provide provides flexible pre-production funding to support the completion of refurbishment of the Hellyer plant and start up working capital.

Over the next nine years, the NQ team will re-process mine waste known as tailings, which contains gold, silver, lead and zinc worth an estimated US$1bn.

Closed in 2012 by former owner Bass Metals, the mill plant has been revamped and brought up to date. According to an update in June, the refurbishment of plant was on budget and on time for commissioning in August.

Held within four separate areas, the tailings at Hellyer total 11.24mln tonnes, and comprise a JORC-compliant resource estimated at 9.5mln tonnes, hosting gold at 2.61 grams per tonne for 796,000 ounces, silver at 104 grams per tonne for 32mln ounces, plus lead and zinc in significant quantities.

In addition to these tailings, the Hellyer assets include a large pre-existing mill facility and full supporting infrastructure, including a direct rail line to port. It also includes a fully permitted consolidated mining lease.

Progress at Ukalunda and Square Post

The group’s other two exploration projects are Ukalunda and Square Post, located in prospecting mining districts in North Queensland, Australia. The districts form part of the well-known Charters Towers Gold Province, where more than 20 million ounces of gold has been mined. 

At Ukalunda, NQ has been granted a mining lease for the Sunbeam silver mine, allowing it to conduct larger-scale mining operations starting with the processing of roughly 48,000 tonnes of surface mineral stockpiles.

READ: NQ Minerals granted a mining lease for its Sunbeam silver mine

A comprehensive programme of rock chip sampling, mapping of the ore stockpiles, mineralogy and metallurgy has been undertaken at Sunbeam. The work has indicated that the ore stockpiles contain minerals including gold, silver, copper, lead, zinc and antimony, all of which have commercial value.

Jackson said the group plans further drilling and development work on the project.

He said it will take a few years to get the minerals exploration and reserve up to speed but it’s going to be “pushed hard in 2019” after the company settles down the Hellyer project.

At Square Post, NQ has reported “excellent” rock chip results and geologists are planning a drill programme for next season.

The company continues to invest in the project, which is considered to be underexplored due to its rugged terrain.

NQ ‘optimistic’ about its growth potential

With Hellyer nearing production and good progress being made at Ukalunda and Square Post, NQ is positive about the outlook.

Chairman Brian Sotckbridge said: “I am optimistic about the group's growth potential and we look to the future with significant confidence.”

Quick facts: NQ Minerals PLC

Price: 9 GBX

NEX:NQMI
Market: NEX
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NQ Minerals Hellyer Project in Tasmania progressing well

Roger Jackson Executive Director of NQ Minerals PLC (LON:NQMI) tells Proactive London that NQ Minerals is on track with metallurgy, commissioning and solid production rates now at their main Hellyer project in Tasmania. NQ Minerals has produced its first lead, gold and silver concentrate...

on 14/11/18

4 min read