Dugald River enters final stretch towards zinc production

Overlooking the Dugald River processing plant site. Image: MMG

MMG’s Dugald River zinc project in Queensland is on track to be producing by the end of 2017 significantly under budget.

Dual-listed MMG reported that the project was now 89 per cent complete and “progressing favourably” against a target of first concentrate production by the end of the year.

MMG has also lowered its expected development cost for Dugald River to between $US550-570 million, a drop from the previous guidance of $US600-620 million.

Dugald River has the potential to be one of the world’s top 10 zinc mines once it is operational, according to MMG, with forecasted annual production of 170,000 tonnes of zinc in zinc concentrate, plus by products.

MMG’s plan to launch production at Dugald River could not come at a better time with zinc prices recently reaching 10-year highs above $US3300 a tonne.

In its third quarter report, MMG said it had completed construction of the Dugald River process plant and associated infrastructure, and dry and wet commissioning of its processing facilities.

The company has also built up its ore stockpiles at Dugald River to 165,000 tonnes in preparation for its plan to ramp up operations.

MMG expects Dugald River to have production costs of between $US0.68-0.78 a pound once the mine has reached a steady state of operation.

Meanwhile, MMG reported that its Rosebery mine in Tasmania produced 17,230 tonnes of zinc concentrate during the third quarter, down 6 per cent on the previous three-month period.

Rosebery’s production was impacted by lower throughput during the quarter due to unplanned maintenance activities in the operation’s mill. MMG’s 2017 production guidance for Rosebery is 65,000-72,000 tonnes of zinc.

The mine also produced 6479 tonnes of lead, 2885 ounces of gold and 1566 ounces of silver during the three months.