Investor enthusiasm for CuDeco’s record copper numbers short-lived
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CuDeco won some investors over briefly on Wednesday with news it hit record production at its Rocklands mine in November — just before it was forced to close its processing plant due to safety issues.
The Rocklands project, near Cloncurry in Queensland, was very near design capacity with monthly production of 240,000 tonnes. Concentrate shipments also marked a new record at 9,900 wet tonnes.
Shares hit an intra-day peak of 34c, a nearly 8 per cent increase over the prior day, before retracing the gains back to 31.5c. CuDeco’s (ASX:CDU) share price has slumped 40 per cent since the 52-week peak of 52.5c it was trading at in mid-January.
The company would not elaborate on what issues were identified with the plant when queried by Stockhead, saying only that “operations were temporarily suspended at the directive of the Department of Natural Resources and Mines (DNRM) following a number of issues”.
CuDeco was permitted to restart production earlier this week “after addressing the issues raised by the DNRM, concerning the mine’s Site Safety and Health Management System and its compliance with the Mining and Quarrying Act and Regulations”, a spokesperson said.
The company has since installed a native copper circuit bypass to process the native copper ore separately to the primary ore.
“These improvements will aid in efficiencies by lowering operating costs and boosting productivity at Rocklands,” chief Gongyang Jiang said.
“We believe this level of production can continue thanks to the appointment of our new site management and reliability improvements to the process plant.”
Recent improvements include an upgraded crusher facility, which CuDeco expects will “consistently operate at or beyond nameplate capacity”.
Adam Norton, who as been in the mining industry since 1989, has been appointed general manager to ensure Rocklands reaches consistent nameplate capacity.
The focus will be on “safe cost-effective operation”, Mr Norton said.
“I believe Rocklands has significant potential now that the challenges of the start-up phase are behind it. Transforming the challenges into opportunities will provide the platform for safe cost-effective production for years to come,” he said.
December’s production figures will be impacted, CuDeco told investors, but improved results are expected in 2018.
Prior to the government-ordered plant closure, the company faced commissioning problems at Rocklands. The mine had to undergo a long, unplanned shutdown in October due to issues with the ball mill that affected copper grades.