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Heading north

Tuesday, 3rd May, 2011

By John Casey

Mining and exploration company Perilya is reviewing plans for the North Mine which it says is "showing great promise" and which could generate a number of jobs in Broken Hill in the near future.

The extraordinary upward movement in the price of silver has made the development of the decline to the lower levels of the North Mine - where "significant high grade resources exist" - much more appealing.

According to Perilya's Managing Director/CEO Paul Arndt the re-opening of the North Mine was "exciting" on a number of fronts for the company.

"Firstly it is exciting because a lot of the necessary infrastructure is already in place, including capacity at the on-site mill," Mr Arndt told the BDT yesterday.

"The decline which is in development (around the 10-12 level) is not far away from the minable ore and provides a pathway to access the lower levels area where we know high grade resources exist.

"Then there is the buoyant price of silver, which is another encouraging factor," Mr Arndt added.

In the past 12 months silver has surged 169 per cent in US dollars and this year alone the precious metal has enjoyed a 45 per cent gain against the Australian currency.

"When the North Mine was closed in the mid 1990s revenues from silver were around $2 per ounce and that figure has recently vaulted to near $50 per ounce," Mr Arndt said.

"With silver grades in the ore at around three ounces per tonne that gives you a return of around $150 per tonne of ore extracted compared with $6.

"Obviously that is a significant difference and while it was too expensive to mine the ore back then, these days it is a different proposition," Mr Arndt continued.

Perilya expects to make an announcement regarding the re-opening of the North Mine before the end of the year and Mr Arndt says once a decision has been made production could be reactivated quickly.

"It won't mean hundreds of jobs but certainly more than 30," Mr Arndt predicted, adding that he was not concerned about attracting the right personnel.

"We (Perilya) have a much better image than before and people are now confident in working for us because of our stable financial position," he continued.

Other good news to come out of Perilya's Quarterly Activites Report (to March 31, 2011) was the completion of an extensive upgrading of the company's storage and ship-loading facilities at Port Pirie.

Mr Arndt said Perilya was now in a position to export lead concentrates to take advantage of lower spot treatment charges available for its product in overseas markets.

"We can now export 100 per cent of our lead concentrates if need be, which puts us in a very strong position to negotiate terms with Nyrstar who run the Port Pirie lead smelter," Mr Arndt said.

"We are not long-term bound to anyone and our lead concentrate is of a very good grade and very much a desired commodity," he added.

Mr Arndt also praised the efforts of the company's Broken Hill workforce which "has continued to maintain a very tight control on costs" and also "saw the continuation of another quarter of strong performance in mine safety".

"Andrew Lord (BH General Manager) and his team have made a conscious effort to improve safety in the workplace but we never get complacent about safety," Mr Arndt said.

"It really has been a tremendous effort by the guys on-site (in BH) who have shifted the culture from a number of years ago," he added.

According to Perilya's quarterly report the "Lost Time Injury Frequency rate has reached a historic low for BH and the All Injury Frequency rate has reached a new record low".

During the quarter 444,000 tonnes of ore (up from 397,000 in the December quarter) was mined from Perilya's Southern Operations, - some three per cent above plan - which was part of a "very active and exciting period for Perilya" the report stated.

Perilya's annual general meeting will be held in Perth on Friday.

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