Blackthorn Resources (ASX: BTR) has made its maiden shipment of zinc concentrate from its Perkoa Mine in Burkina Faso to the Port of Abidjan in Cote d'Ivoire and expects to load its first shipment for export in early September.
Ore throughput and concentrate quality are approaching design specifications for a single ball mill operation and about 17,000 tonnes of zinc concentrate are now stockpiled at the mine.
The installation and commissioning of the second ball mill is expected to be completed in the fourth quarter of 2014, enabling the company to ramp up production to 1 million tonnes throughput capacity.
"The first delivery of saleable product to port is another important milestone at Perkoa and we look forward to the loading of the maiden shipment in the near future. We are also looking forward to continuing ramp up at the mine," managing director Scott Lowe said.
The Perkoa Project is a joint venture between Glencore International (project manager), Blackthorn and the Burkina Faso Government (10% free carried) which is currently developing the first large-scale underground base metals mine in the country.
It has a JORC Probable Ore Reserve of 6.3 million tonnes at 13.9% zinc. Mine life is estimated at 9.5 years and the project is expected to become cash flow positive later this year.
First deliveries of concentrate
Blackthorn delivered 120 tonnes of zinc concentrate to the Port of Abidjan in Cote d'Ivoire as part of a process of testing the logistics chain from the mine to the port prior to embarking on full-scale transport of concentrate.
The first shipment of export sales is likely to contain 13,000 tonnes of zinc concentrate and is expected to be loaded early September 2013.
Ore throughput and concentrate quality are approaching design specifications for a single ball mill operation with 50,739 tonnes of ore milled in June 2013.
Plant availability is currently at 93.3% and average throughput is 75.6 dry metric tonnes per hour.
Zinc recoveries and concentrate grades continue at close to target levels.
Mining in the open pit is continuing, with the second push-back now well under way.
Drilling performance in June was on target following the introduction of an additional drill rig. This follows the below budget drilling performance in April and May 2013 due to the poor availability of the rigs.
As a result, production from the open pit is below budget year-to-date, however this is being offset by better production and grades from the underground mine.
A new drill contractor is now in the process of mobilising to site to ensure drill performance continues to improve.
Underground ore production from development was ahead of target in June 2013, with high-grade development ore of about 13.5% zinc being mined.
This ore is being used to improve the head grade of the feed to the process plant.
Stoping from the 130 level is expected to commence in July 2013, which will provide increased production tonnage and grade from the underground mine.
The Main Ramp is progressing well following the completion of ventilation raises to the 160 and 190 levels.
Blackthorn had last month received a final three year renewal of its Poa and Guido exploration permits within Blackthorn's Northern Tenements surrounding the Perkoa mining licence.
This gives it a 100% interest in 7 exploration permits in Burkina Fsso covering a total area of 911.23 square kilometres.
Exploration work in the Northern Tenements is progressing, targeting base metals in an area surrounding the Perkoa project, which is mining a volcanogenic massive sulphide deposit.
Glencore had in March this year agreed to provide additional equity funding for the Perkoa Project of up to US$80 million during 2013 to complete construction and commissioning as well as fund estimated costs until the project becomes self-funding.
This additional funding requirement represents approximately US$40m to cover increased construction and commissioning costs and approximately US$40m to cover working capital and additional capital requirements up to 31 December 2013.
As part of this agreement, Blackthorn elected not to fund its share of the capital requirement and instead chose to reduce its stake to 27.3% from 39.9%.
Blackthorn Resources continues to hit the milestones as it approaches the first export shipment of zinc concentrate from its Perkoa Project, which importantly is expected to become cash flow positive later this year.
Despite this, the challenging market has seen its shares drop to $0.27 from $0.44 on 22 April, three months ago.
This places its market capitalisation at $45.18 million compared with its cash holding of $28.6 million on 31 March 2013 and valuing its 27.3% stake in Perkoa and its flagship Mumbwa Project in Zambia at just $16.58 million.
We expect the share price to be re-rated once export sales begin.
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