Western Areas has cut its nickel production target for the 2021 financial year due to seismic activity at the Flying Fox underground mine in Western Australia.
The seismic activity occurred in the lower T6 zone of the Flying Fox mine, leading to increased lower grade ore and unit cash cost of production from $3.25-$3.75 per pound to $3.50-$4 per pound.
Western Areas’ guidance for nickel concentrate production has been lowered by 2000 tonnes to 17,000-19,000 tonnes.
Managing director Dan Lougher said Flying Fox had been an exceptional mine over its 15-year life, but there was limited flexibility in the mine plan if unexpected issues occurred in its final years.
“While it is disappointing to lower our guidance expectations for (the 2021 fiscal year) we are continuing to work with our mining contractor to reduce operating costs and maximise cashflow generation over Flying Fox’s remaining life,” he said.
Western Areas will reschedule the remaining life of mine for Flying Fox, causing some of the higher grade material to be deferred into the 2022 fiscal year.
Production guidance has also been impacted by lower grade material being mined from the Spotted Quoll mine during the September quarter, as an intrusive pegmatite unit was encountered, increasing waste dilution in the mining areas.
The Flying Fox operation was Western Areas’ first producing underground mine in 2006, with the operation now at depths of over a kilometre underground.