8th Jul 2014 08:14
LONDON (Alliance News) - Sierra Rutile Ltd Tuesday said its production rates underperformed in its first half after tailings provided disappointing levels of rutile, but its cost efficiency plan continued to move forward, reducing operating cash costs significantly during the period.
The titanium feedstock minerals company, with operations in Sierra Leone, said its rutile production increased 3% to 27,842 tonnes in the three months ended June 30 from 26,898 tonnes in the same period the previous year. It said this number led to a modest underperformance against its planned rutile volumes in the first half.
The company said its rutile production from tailings was lower than planned during the period as higher than expected non-commercial heavy minerals passed through its tailings concentrate.
Sierra Rutile also said its ilmenite production fell 12% to 8,410 tonnes from 9,395 tonnes a year earlier, and its zircon concentrate production fell 37% to 488 tonnes from 670 tonnes the previous year.
The firm added that its sales in the second quarter were ahead of production volumes, which has led to a reduction in its inventory.
However, the company said production in the second half is expected to be higher than in the first, as mining operations move into higher grade zones and its processing is improved following completion of its planned mineral separation plant upgrade.
Sierra Rutile said it still expects to meet its full-year production forecasts.
The company said it did manage to continue improving its operating cost efficiency during the half, resulting in a 24% reduction in its operating cash cost per tonne to USD609 from USD799 previously despite the lower-than-expected production.
Sierra Rutile said it expects to see a continued reduction in unit costs through the remainder of the year.
"The unit operating costs were encouraging, despite production in the quarter coming in at a slightly lower level than expected," Chief Executive Officer John Sisay said in a statement. "The planned transition of the mine plan to higher-grade areas during the second half of the year will result in an increased production rates and further reductions in unit costs."
Sierra Rutile shares were up 2.5% at 50.75 pence early Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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