A record 5.0Mt of ore were mined during the December quarter of 2018 as focus shifted to maximising mineral production as mined grades declined. Mining continued in the Central Dune ahead of the expected transition to the South Dune in June 2019 quarter. Another good safety performance with no lost time injuries (“LTI”) brings the consecutive LTI free months to 58.
December 2018 Quarter Highlights
|Key Indicator||Unit||Q3 2018||Q4 2018||Variance|
|Ore Grade||% HMC||4.78||3.60|
|Zircon Low Grade Produced*||tonnes||-||-||-|
Mining continued in the Central Dune with three hydraulic units now fully commissioned to replace the Dozer Mining Unit. Despite a 5%increase in ore mined, production of heavy mineral concentrate fell 25% to 149kt as mining progressed through the low grade fringes of the ore body.
Following completion of construction of the tailings storage facility outer sand wall in the September quarter, all sand tailings are now being deposited in the mined-out Central Dune pit, representing the first stage of rehabilitation in this section.
Good rains continued throughout the quarter resulting in the Mukurumudzi Dam remaining full.
The minerals separation plant availability was again 97%, treating 191,633 tonnes of heavy mineral concentrate to produce 24,505 tonnes of rutile at a recovery of 99%.
Ilmenite production, at a recovery of 102%, was 108,465 tonnes, 8% lower than the previous quarter.
Zircon production at 8,252 tonnes was 15% down on the previous quarter, impacted by lower contained zircon in the feed and a lower recovery of 72% (79% last quarter).
Despite some softening in the global pigment industry, demand for feedstock remains high as producers continue to target maximum output. Ilmenite prices remained stable and are expected to continue at current levels through the next quarter.
Ongoing supply constraints in the rutile sector have maintained upward pressure on rutile prices. This is expected to continue through the March 2019 quarter.
Zircon demand, however, weakened through the quarter, but supply constraints supported stable prices, which are expected to remain at current levels though early 2019.
Bulk loading operations at the Likoni Port facility ran smoothly, dispatching 126,000 tonnes of ilmenite and rutile during the quarter. Containerised shipments of rutile and zircon through the Port of Mombasa continued according to plan.
Mining Transition to the South Dune
The planned transition to the South Dune orebody has been brought forward to June 2019 (previously scheduled for July 2019), this due to mining the Central Dune faster than anticipated.
Engineering work, procurement, site clearing and earthworks for the transition continued in the quarter with equipment deliveries commencing in December 2018. The total cost of works for the mine move is estimated at US$12.3 million. The project primarily involves the supply and installation of 7,400m of slurry and water piping, an 8,500 11kV power line, a pipe bridge across the Mukurumudzi Dam spillway and slurry and process water booster pumps.
Acquisition of additional mining tenure continues to be progressed through the Ministry of Petroleum and Mining ahead of an updated Ore Reserve based on the expanded 2017 Kwale South Dune Mineral Resource as announced on 4th October 2017.
Following expiry of Special Prospecting License 173, a new Prospecting License (PL/2018/0119) for the area surrounding the Kwale Mine was granted. The license was issued under the Mining Act 2016 and is valid for three years with the option of extending.
Extensional exploration drilling in the North-East Sector (Kwale East) of the PL/2018/0119, adjacent to the Central Dune, commenced in Q2 2018 with 274 holes for 3,835 metres of drilling completed. Completion of the remaining drilling programme in this area (4,200 metres) is suspended pending resolution of community access issues. Drill assay results to date have shown potential for some limited extensional economic resource close to the Central Dune (Bumamani), but remains subject to a more detailed evaluation.
Motivated by an improved economic environment and operational experience, re-evaluation of the higher grade areas of the North Dune is being undertaken. This includes infill drilling, which is now complete, with 573 holes for 20,598 metres drilled. Drill assay results are expected in Q1 2019 and an updated Mineral Resource estimate for the North Dune during Q2 2019.
Figure 1 illustrates drilling work completed in PL/2018/0119 during 2018.
The Company’s Vanga Prospecting License application, having previously been recommended for approval by the Mineral Rights Board, was issued in December 2018 as PL/2015/0042. Community engagement in the area is underway with a drill programme scheduled to commence in Q1 2019.
Figure 1: Extensional exploration drilling completed
Download the full quarterly activities report: Base Resources Quarterly Activities Report - December 2018