Metro Mining to bring Bauxite Hills mining in house, restart operation in June quarter

　　Representatives for the award-winning mine waved off 33 vessels last year, with the final ship departing for China in December 2018.

　　Despite Cyclone Owen’s effect on the Brisbane-based company, its crew still managed to load 220,000 tonnes of bauxite last month.

　　2018 was the company’s first year of operations at the Bauxite Hills mine and it met its guidance target of 2 million wmt of shipped production.

　　At the dawn of the new year, Metro Mining’s total shipped production figure for 2018 was 2.037 million wmt from Bauxite Hills.

　　The mine began production in April 2018 and has an estimated reserve of 92.2 million tonnes and total resources of 144.8 million tonnes.

　　It is tipped to deliver bauxite into China over a 17-year mine life.

　　Metro managing director & CEO Simon Finnis acknowledged the production milestone on December 31, 2019, saying: “This is a great result for Metro.

　　“Not only have we achieved guidance for 2018 in our first operational year, but we’ve done so after our operations have twice been interrupted by cyclones, at either end of the operating year.”

　　Metro will up production levels this year, announcing in November 2018 it would set guidance at 3.5 million wmt to meet strong customer demand.

　　In late November the company had contracts for 69% of the expanded 2019 production forecast.

　　Finniss said at the time: “This year your company has transitioned smoothly from a developer to a producer with a significant growth outlook and continues to look for ways to improve and take advantage of market forces.”

　　One of the ways the company plans to improve is to bring production in-house.

　　The company plans to restart its operations in April 2019, after the wet season, and have its team mine the resources.

　　As a result, Metro has terminated its contract mining agreement with SAB Mining.

　　Finnis explained: “Now that we’ve commissioned and ramped up the project during 2018, it is a natural transition to own and operate our mining equipment.

　　“We have an excellent management team in place at the mine that is eminently capable of managing the mining function, so we see this as a logical step to increase efficiencies and reduce operating costs as we increase production to 3.5 million tonnes in 2019.”

　　To prepare for mining in the June 2019 financial quarter, Metro will undertake a number of activities in the March 2019 quarter, including:

　　Supplementing Bauxite Hills’ truck and haulage fleet configuration;

　　Duplicating screening capacity at its Barge Loading Facility;

　　Accelerating installation of a jaw crusher to enable shipment of any oversized material; and

　　Supplementing the marine fleet and on-water infrastructure to maximise tug and barge movement efficiency.

　　Much of the Bauxite Hills existing plant and infrastructure has been designed to accommodate higher operating levels, so the initiatives may prove low-cost and easy to implement.

　　The company is also planning to update a stage II scenario from its definitive feasibility study (DFS) in the second half of 2019 to incorporate a production expansion to 6 million tonnes and then present an investment option to Metro’s board.

　　Metro is undertaking a review of opportunities for its coal assets which are housed in a subsidiary.

　　Major shareholder DADI Engineering Development Group’s former representative on the Metro board Xiaoming (Aaron) Yuan joined the subsidiary’s board in November 2018 on his retirement from Metro’s board.

　　Yuan spent eight years on Metro’s board.

　　Two options for the coal assets are divesting them or forming a joint venture.

　　Metro had $22.9 million cash at the end of the September 2018 quarter, with cash and trade receivables sitting at $38.2 million.

　　The company used $3.2 million on operating activities during the quarter, spending $558,000 on investing activities and directing $3.4 million net cash towards financing activities.

　　Sales revenue for the period was $43.8 million after 822,000 wmt was shipped to five Chinese customers, including foundation customer Xinfa Group Corporation Limited.

　　Unit costs were about $46 a wmt.

　　The company had $14.77 million in loan facilities on September 30, 2019, with the full amount drawn down.

　　Metro’s estimated cash outflows for the December 2019 quarter were $44.3 million.