Perilya powers ahead
Saturday, 30th July, 2011
BH mining giant Perilya has posted another bumper report that has fuelled its appetite for further acquisitions.
Hailed as a “major milestone” by Managing Director and CEO Paul Arndt, Perilya’s Quarterly Activities Report to June 30 reveals a substantive upside in mining operations aligned with continued improvements in safety to record levels.
“The market has received this latest report very positively,” Mr Arndt told the BDT yesterday.
“We have been on a path of consistently laying building blocks to move the company into a stronger position and this quarterly statement is an active demonstration of that.
“We are a very close-knit team at Perilya and everyone should take some of the credit for our recent achievements,” Mr Arndt reflected.
Highlights to emerge from the report for the June 2011 quarter include:
* BH operations continue to “perform strongly”
* The newly acquired mine in the Dominican Republic produced an “outstanding performance”
* Repayment of a $44.85 million loan 12 months ahead of schedule
* A “more than doubling” of the mineral resource at the lithium project in Canada
* “Historic first shipments” of lead concentrate from Port Pirie; and
* “An exciting discovery” at the North Moolooloo deposit in the Flinders Ranges
On the financial front, Perilya’s free cash on hand for the period increased to $92.9 million (pre loan repayment - up from $40.3m) and during the quarter a new $30m banking relationship with Industrial & Commercial Bank of China was established.
“We will be investing a lot of money into Broken Hill - in the vicinity of 50 to 60 million dollars will be spent at the Potosi site before any revenue comes in,” Mr Arndt explained.
“This new relationship with I&C Bank of China will help facilitate that operation.
“This new, direct relationship with a Chinese Bank which has operations already in Australia also delivers a more competitive finance rate.”
Equally pleasing for the company was the continued improvement in safety performance in BH and Perilya’s ability to migrate that culture to the Cerro de Maimon (CdM) operations in the Dominican Republic.
“Our chief safety officer in Broken Hill, Peter Lean, spent some six weeks at our operations in the Dominican Republic which has led to a substantial improvement,” Mr Arndt said.
“A lot of our safety learning can be transferred very quickly and Peter will be going back to help build on what has been achieved so far.”
The All Injuries Frequency Rate (AIFR) at the CdM operations have dropped almost 20 per cent since Perilya took over, while locally the AIFR sits at a new record low of 11.8, compared with 19.9 at the corresponding time last year.
“Our safety record in Broken Hill is fantastic although we never get complacent in this area.”
Mr Arndt said Perilya’s consistency of performance in turning around and improving its BH operations was very pleasing while the raw figures produced at the Cerro de Maimon mine were “outstanding”.
“We’ve worked hard on our acquisition strategy of getting assets to outperform their historical levels,” he said.
“This latest report is a major milestone in demonstrating the latter part of that strategy.”
The “outstanding production performance improvement” for the quarter at the CdM mine reported included a 37 per cent above plan result for copper and a 127 per cent above plan result for silver.
Annual expected production forecasts for silver are now 550,000-600,000 ounces up from 340,000oz.
“We are tremendously excited by the performance of that asset,” Mr Arndt said.
“While we can’t expect to always get those same production numbers, we are confident of posting numbers superior to budget forecasts.”
While Perilya will be a buoyant participant at the mining industry’s important annual Diggers and Dealers conference next week in Kalgoorlie, Mr Arndt admitted that some recent exploration results were disappointing.
“Exploration diamond drilling at the Southern Extensions (BH) was a high risk target and we didn’t locate what we were looking for,” he said.
“But it is important to report every outcome whether they are positive or negative and on this occasion it was a negative.”