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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (74389)	1/22/2011 6:13:27 PM
From: LoneClone	Read Replies (1) \| Respond to of 192884

Mandalay mulls reprocessing tailings at Chile mine - CEO miningweekly.com By: Matthew Hill 17th January 2011 TORONTO (miningweekly.com) - TSX-listed Mandalay Resources, which aims to produce 1,9-million ounces of silver and 15 000 oz of gold this year at its Chilean Cerro Bayo mine, could lift output in the near term from processing low-grade waste dumps, CEO Brad Mills said on Monday. The company had used tailings to test run its newly reopened mill in December, producing a better-than-expected concentrate. “At current metal prices no question [that this would be profitable],” Mills said in an interview. The company was particularly considering feeding a seven-million-ton waste dump at a grade of 30 g/t of silver. The current rate of production at Cerro Bayo for 2011 would use only about 70% of the mill’s capacity, meaning that there was the opportunity to feed the waste material through it to take advantage of soaring precious metal prices. “There is no mining cost to do that,” said Mills. Silver prices have soared by 51% over the last six months, to trade at $28,31/oz on Monday. Gold has climbed by 12% to trade at $1 3640/oz, after reaching new highs around $1 420 at the start of the year. Mandalay bought the Cerro Bayo operation from Coeur d'Alene Mines, which had closed it during the recession, in August. The company plans to reach full production of 3,5-million ounces of silver and 21 000 oz of gold in 2012 at a net cash cost of $3,00/oz to S$4,00/oz an ounce of silver, minus the gold credits. “It’s going really well...the restart has been much easier than we thought,” Mills enthused, adding that the mine had been recommissioned ahead of schedule and under budget. SELF FUNDING He went on to say that after having raised C$13-million in equity and debt in December, Mandalay would be cash flow positive this year, and wouldn’t be looking to raise additional financing. Toronto-based Sprott in December bought ten-million Mandalay shares for C$0,32 a piece in a C$3,2-million private placement. Mandalay was trading 5% down on Monday afternoon at C$0,45 a share. Sprott Lending Resource Partnership also agreed to lend Mandalay C$10-million for two year. “With current metal prices we should generate cash, and we won’t need to raise more unless we buy something,” commented Mills. SHIFTED STRATEGY Mandalay is no longer looking to acquire producing, or near producing assets, as its strategy had previously been. Higher metal prices have lifted valuations, making producing assets expensive. “Exploration is what we would look more at now,” said Mills. Chile, Argentina, Peru and Australia are attractive addresses to the company. Mandalay also owns the Costerfield mine in Australia, which Mills said would produce about 2 000 t to 2 500 t of antimony, used to coat items like airplane seats as a flame retardant, in 2011. Gold production will be between 16 000 oz and 20 000 oz for the year, with similar figures for both the yellow metal and antimony in 2012. Mills said he expects antimony prices to remain “in the $12 000/t-plus range” in the next 12 months. The Financial Times reported on Monday that prices for the metal had doubled over the past year to reach an all-time high of $13 000/t, as China cut production in an effort to reduce pollution.