[miningmx.com] — ANOORAQ Resources (Anooraq) experienced a “tough’ December quarter, according to CEO Philip Kotze, who added the challenging operating conditions have continued into the current March quarter.
Adverse factors included insufficient development to cope with disruptions to the mining plan from “potholing’ of the platinum reefs, and frequent production halts because of Section 54 safety stoppages.
“Potholing’ is a geological phenomenon which removes sections of the platinum reefs being mined.
That means the mining operations have to be relocated to new areas – or panels – but Bokoni has not been able to do sufficient extra development work to provide alternative panels for the mining crews.
A year after Anooraq took over management of the Bokoni (formerly Lebowa Platinum) mine from Anglo Platinum (AngloPlat), the mine reported operating costs of R1,058 per tonne of ore milled for the December quarter.
JP Morgan analyst Steve Shepherd pointed out during question time on the Anooraq investors’ conference call that this figure remained high, compared with neighbouring mines where comparable costs sat at around R600/t.
Kotze had previously stated Bokoni should have its operating costs down to R800/t milled by the 2010 December quarter.
He told Shepherd: “There is no reason why we cannot run at similar cost levels to the rest of the industry.’
Kotze added that turning Bokoni around had turned out to be a lot harder than management had anticipated when it took over the running of the mine.
He singled out problems with management and dealing with the impact of previous underinvestment in the mine infrastructure.
“We have replaced 80% of the management team on the mine because we needed to jack up core skills.’
Turning to the Section 54 safety stoppages, Kotze commented he felt these had become excessive over the past quarter.
“We had one incident where a safety inspector insisted on a total shaft shutdown after he picked up a single fuse in a back area.
“We are trying to address this in a proactive way and get the DMR (department of mineral resources) to see things more from our frame of mind and become a part of the solution.’
Anooraq lost C$93.6m for the year to December (2009 – C$51.8m loss), during which period platinum group metal (pgm) production remained unchanged at 116,164 ounces (116,164oz).
This was because of a 4% drop in recovered grade to 4.12g/t (4.31g/t), which offset an 11% increase in tonnage milled to 1mt (0.9mt).
Kotze said the prefeasibility study for the Boikgantsho project and the optimisation study for the Ga-Pasha development wold be completed during 2011.
He added the focus for 2011 at Bokoni remained on increasing development work to establish mining flexibility that would allow for improved productivity and efficiency.
