Business Update - February 2017
Perth, Feb 8, 2017 AEST (ABN Newswire) - MZI Resources Ltd (
ASX:MZI) is pleased to provide the latest Company's Business Update - February 2017.
2016: a year of achievements and challenges
Achievements
- Keysbrook Project substantially at design production rates after 12 months operation
- First sales of commercial quantities achieved for all products - L70, L88 and Zircon concentrate
- Keysbrook Ore Reserves trebled1
- RMB senior debt facility restructured on favourable terms.
- Positive operational cash flow achieved in September Quarter and for second half CY2016.
- WCP Optimisation Program completed late November
Challenges
- Market conditions hit bottom in Q1 2016
- Recurring reliability and operating problems at the MFU
- Mining costs temporarily impacted by atypical long haul distances and noise management requirements
- Flowsheet bottlenecks slowed WCP ramp-up to design
- Achievement of design production at Picton MSP delayed by inconsistent HMC grade and quality
- Project revenues and cash flow tight during ramp up period
2017 - MZI is positioned for success
MZI's ongoing program to pursue continuous improvement has positioned it to do well in 2017:
The pathway to success:
- Consolidate first year achievements at Keysbrook
- Optimise mining and processing performance to achieve and exceed design parameters
- Deliver sustainable, consistent and reliable results
- Establish 'Brand' and demonstrate producer 'bona fides'
- Build cash flow and improve financial performance
- Aggressively pursue Continuous Improvement
The Continuous Improvement Program is working
- WCP Optimisation Project Completed and Commissioned November 2016
- Design Performance achieved for Heavy Mineral Concentrate (HMC) recovery and grade at design throughput December 2016
- Record HMC Production in December quarter
- Solution for MFU issues identified
- Significant mine improvement expected with shift to new mining area in February 2017
- Adaptive noise management program and further noise abatement measures to improve noise footprint
- Operation cash flow positive for the December half year (+$3.4m) and December month cash flow positive.
Strong market outlook adds lustre
Titanium Dioxide
- Outlook for high Ti02 feedstock demand (i.e. rutile & leucoxene) very positive due to potential supply shortages.
- Several price increases announced by Western & Chinese pigment producers in 2016.
- Pigment consumption is strongly correlated to GDP growth, which is now looking positive for 2017.
- Excess chloride pigment inventory has been largely depleted.
- Another strong northern hemispherical painting season would further tighten the market.
- Upward price momentum for high Ti02 feedstocks has begun
Zircon
- Supply - demand is moving into balance with producers continuing to manage supply.
- Level of customer enquiry is increasing as demand improves in non ceramic applications (e.g. precision casting).
- Moderately positive outlook for housing and construction in China.
- Modest price increase during December quarter which reversed previous falling trend.
- Positive industry sentiment indicates potential for further price increases in 2017.
- Upward price momentum in Q1 2017
Summary
- Positive market outlook for mineral sands products, including Keysbrook leucoxene, means Keysbrook is 'hitting its straps' at the perfect time
- Good progress has been made with resolution of start-up challenges encountered in 2016
- Ramp-up to design performance and Continuous Improvement program on track with schedule.
o Record operational performance achieved in December Quarter
o WCP operating at design, and further gains targeted
o Design performance targeted at Picton MSP in current quarter
- Significant improvement in mining/MFU performance (costs and reliability) anticipated from shift to new mining area and use of alternative more efficient MFU
- MZI on a clear path to success through focus on continuous improvement and optimisation
To view the presentation, please visit:
http://abnnewswire.net/lnk/B8H8X56J
About MZI Resources Ltd
MZI Resources Ltd (ASX:MZI) is a mineral sands company focused on the high value minerals of zircon, rutile and leucoxene based in Perth, Western Australia. Its flagship operating asset is the Keysbrook Mineral Sands Project, located 70km south of Perth. At the Keysbrook mine, mineral sands are mined and processed to produce heavy mineral concentrate (HMC) which is processed into final products under a toll treating arrangement with Doral Mineral Sands Pty Ltd at the Picton Mineral Separation Plant (MSP) near Bunbury.
The Keysbrook mine hosts a world-class zircon / leucoxene ore body with total Ore Reserves equivalent to over 15 years of production at design output rates, and total Mineral Resources equivalent to over 30 years of production. Production commenced in late 2015, making the Keysbrook Project Australia’s first – and the world’s largest - primary producer of high value leucoxene.
| ||
|
