Australian Zircon has reported losses of more than $16 m in its half year results as the company ramps up production at its flagship mineral sands project in South Australia.
The high-grade zircon producer says the results reflect increases in production activity at its Mindarie zircon operation, where construction and commissioning of an improvement development is nearly complete.
The $24.6 m project, which is set to be completed by June 2009, includes site infrastructure development, civil works and metallurgical testing for mine optimisation.
Australian Zircon director, Michael Kiernan, says the development will help the company increase annual production rates by 30% before the end of the March quarter and bring the project’s annual production rate to 35,000tpa.
The company also expects to benefit from a $40 m recapitalisation arrangement which will provide capital through a share placement scheme.
Kiernan says the recapitalisation scheme will “substantially strengthen” the company’s balance sheet and allow it to capitalise on the strengthening zircon market.