Cawse enters production

Australia’s Centaur Mining & Exploration (CEMGY-O) has achieved commercial production at Cawse nickel-cobalt mine in Western Australia.

The open-pit laterite operation began producing cobalt in December of last year, and the first nickel cathode is expected later this month.

Situated north of Kalgoorlie, the mine is expected to crank out 10,000 tonnes of nickel and 1,800 tonnes of cobalt annually over 23 years. Production costs are projected to be only US9 cents per lb. after cobalt credits of US$11.80 per lb.

Open-pit mining began in April 1998, since which time ore has been stockpiled for the processing plant. A power station was completed in August, followed two months later by construction of an autoclave for the high-pressure acid leach plant. The first cobalt hydroxide was produced in November; the first cobalt sulphide production, in late December. Nickel remains in solution, with cathode production from the solvent extraction-electrowinning cells planned for late January.

Centaur plans to ramp up production slowly over a 2-year period. By the end of the current fiscal year (June 30, 1999), the mine is expected to have produced 3,800 tonnes of nickel cathode and 900 tonnes of cobalt. In the following fiscal year, output is projected to reach 8,500 tonnes of nickel and 1,900 tonnes of cobalt.

The total cost of construction at Cawse, excluding predevelopment work, amounted to A$273 million.

In market news, Centaur expects to have a sponsored listing of American Depository Receipts (ADRs) early in 1999. The company’s shares trade on the Australian Stock Exchange, while unsponsored ADRs trade on the over-the-counter market.

Centaur also anticipates producing 250,000 oz. gold from its Mt. Pleasant mine, immediately south of the Cawse deposit, during fiscal 1999. The company has 3.2 million oz. gold hedged forward at an average price of A$557 (US$340) per oz. over the next 12 years.