Metals Exploration emerges from quarter of change

Pacific Rim-focussed natural resources exploration and development company Metals Exploration updated the market on its Runruno gold project in the Philippines on Wednesday, reporting mining of 2.93Mt in the quarter ended 31 March, with total ore mined standing at 573Kt.

The AIM-traded firm said 14,892 ounces of gold was poured during the period, with “key” maintenance programmes yet to commence due to working capital constraints, although orders had been placed to begin mobile equipment rebuilds in the second quarter of 2019.

It said the average mine gold grade was 1.54 grams per tonne, against a budget of 1.70 grams per tonne, which the board said reflected the historical dilution rate of about 25% against a scheduled dilution of 15%.

On the processing front, Metals Exploration said overall plant availability and gold recoveries remained a “critical” issue, with both measures well below the original feasibility studies.

Gold recoveries averaged 66% in the first quarter, against the feasibility forecast of 90%, with the result being that total poured ounces of gold were below budget at 14,892 ounces.

In addition to the low gold recoveries, maintenance issues were said to be the “key influence” on production throughputs, with more than two weeks lost due to ruptures in the tailings pipeline and low water availability.

The gravity circuit had been recalibrated, the board reported, with 37% gold recoveries being achieved during the quarter.

BIOX operated at 65% of design capacity during the period, with the company adding that oxidation rates were still below design for the quarter, at 78%.

Looking at the finances, a total of 15,293 ounces of gold were sold during the quarter at an average realised gold price of $1,309 per ounce.

Discussions were ongoing with the firm’s lenders to restructure its overall debt position, with the board adding that a standstill from making principal and interest payments was currently in place until 2 May.

Cash in the bank as at 31 March totalled $3.34m.

During the period, Darren Bowden was appointed as the CEO and executive director on 3 January, with Guy Walker appointed as an interim chairman and Mike Langoulant as interim chief financial officer.

Management of the processing plant was restructured, with the appointment of Xiaofeng Zheng as general manager, technical.

Andrew Crawford was appointed as plant manager, while Ian Holzberger and Eduard Simovici resigned as directors, and Andrew Rogers stepped down as CFO.