News Item : Millennium ramping up maiden production
Joel Spreadborough: Hello I’m Joel Spreadborough from the Finance News Network and joining me from Millenium Minerals Limited (ASX:MOY) is CEO, Brian Rear. Brian, thanks for talking to us.
Brian Rear: Thanks for having me on.
Joel Spreadborough: Could you start by introducing investors to Millennium Minerals. Where are your projects and what is your focus?
Brian Rear: We’re up in the east Pilbara district, so about half way between Newman and Marble Bar and just outside of the town of Nullagine. We have a tenement, a series of tenements that stretch from the town roughly out about 50 kilometres. Our whole centre of gravity is just outside the town next to our largest deposit Golden Eagle. We have about a 1.3 million ounce resource base and a reserve base of around 740,000 ounces. We’ve just recently started up the mine and process plant, and we’re up and running at production levels.
Joel Spreadborough: Let’s turn to your key operation, the Nullagine gold project where you have just poured your first gold bar. What is the significance of this milestone for Millennium Minerals?
Brian Rear: Well it’s a culmination I guess of almost three years’ work, we looked at this project in late 2009. We did the initial banking in 2010 and then we built through 2011, into this year. We raised about $89 million, partly debt, partly equity, but we’ve brought it in on time and budget. And so now we’ve moved – we’ve gone to that transition from developer to producer and we’re at commercial production levels. So it’s commissioned very well and so I am pleased about that, you know, it’s great. The team has done a fab job.
Joel Spreadborough: So when is full production expected and what are your targets?
Brian Rear: Well full production this month, November, that’s our plan. It’s a tight objective, but I think the reason we finished on time and budget is because we set ourselves a very high bar, to act as a team and to work as a team. And we’re going to do it again on this production expectation, and we’ll get there. We’re running now at full production, 24 hours a day at design and I see no reason – there’s nothing coming out of what we’re seeing around the plant that suggests to me or the team, that there’s a design issue anywhere. The things that stop us or disrupt us from time to time are things that any production unit would experience in a runned condition, so given that, we’re confident that we can hit it this month.
Joel Spreadborough: Just looking closer at the project itself Brian, what is the size of the resource and is there potential to expand it further?
Brian Rear: Well it’s interesting, I think. We’ve actually probably not sold or promoted the longer term potential of that tenement holding. We have as I said earlier, we’ve got 1.3 million ounces in resource but you can’t bank resource, you’ve got to bank reserves. And our focus the last two years has been on developing reserve out of that resource base that existed. Now we think that we can give it a lot of energy in the next two years, we will push that resource base to 2 million ounces and we’ll push our reserve base over a million ounces.
And that’s looking at going above the 90,000 ounces level; we’ll probably try to get above 100,000 by the end of next year, or certainly understand that we can do it by then. And we can arrive somewhere between the 70,000 ounces and 90,000 in the early parts of next year. And that’ll be a great platform on which to go forward on, and kick it again later.
Joel Spreadborough: Let’s focus on financials. What is Millennium’s cash position as the 2012 financial year wraps up?
Brian Rear: Look we should go cash positive next month in December, so we’re running fairly tight working capital now - $4/$5 million. But as long as we don’t make any serious errors in operation, we will be pouring 1,400/1,500 ounces a week and so that’s, you know, $ 2or $3 million bucks coming in every week. So that’s more than adequate for our needs. And once we go positive, we hope to build some surpluses into the early part of next year and then give exploration a real kick.
Joel Spreadborough: Looking ahead Brian, what is Millennium’s exploration program and objectives?
Brian Rear: We’ve got a budget of about $10 million, it’s a base budget. I’d like to actually spend some more than that, but let’s spend $10 million and see where we get to next year. As I said earlier, we haven’t really done much in drilling or anything like that in this last year, but there’re a number of things happening. We have a little joint venture with some tenements we call Beatons Creek. They’re mining leases that we own and they’re just outside the town of Nullagine. And we have a small junior out of North America called Nova and they’re farming-in on that. They’ve had two drill campaigns now and they’re getting quite excited about what’s emerging there. So we’re very interested to see what the results are and what the initial resource base might look like.
And that material, if it is economic, will clearly go through our mill. The rest of the program we’ve got on our ground is really – None of the deposits we have, and we have a whole multitude of them, are closed out. There is strike potential, there is at-depth potential. There’s hardly a drill hole across our tenement block that’s lower than, deeper rather, than 140 meters. So, we’ve got a lot of deep drilling to do.
Joel Spreadborough: Finally Brian. What are your key expansion objectives for the coming financial year?
Brian Rear: Well what we hope to do is understand what the mill as we’ve built it, can do. We know intuitively it’s going to do more, what we don’t know is exactly how much. We think it might be good for 1.8/1.9 million tonnes a year. And if we can demonstrate what that is before Christmas, we’d like to jump into the engineering of that modest amount of work we think we’ll have to do, to get all elements of the plant to run at that. We know that mining runs on one shift a day only at the moment and crushing, so we can double throughput at the frontend of this plant.
We know the mill is going to do more and that’s the question we have to answer, between now and Christmas. What really can it do? Above 1.5 million a year. And then, anything above the 1.5/1.6 [million a year], we need to add leach capacity and we may need to put in a pebble crusher on the mill itself. But, those are minor things we would have to do to lift production by a material amount, and that would get us into that 90,000 ounce area, something like that.
Joel Spreadborough: Brian Rear, thank you for your introduction to Millennium Minerals.
Brian Rear: It’s been my pleasure.
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