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NQ Minerals provides 2020 operations update

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Global Mining Review,

NQ Minerals Plc, a base and precious metals producer from its 100% owned flagship Hellyer Mine and the 100% owner of the Beaconsfield Gold Mine, both in northern Tasmania, Australia, has announced its 2020 year-end operations update from the company’s 100% owned Hellyer Mine to the 31 December and an update on its Beaconsfield Gold Mine.

NQ Minerals’ Chairman, David Lenigas, said: “2020 was a highly successful and pivotal year for the company, having seen our flagship Hellyer operations finally achieve production rates better than originally forecast from the original mine start-up plan. Hellyer’s year end performance, and the revenue boosts associated with production rates of around 1.4 million tpy, were instrumental in securing a major US$55 million debt refinancing package for Hellyer. Efforts to improve Hellyer’s output will continue through 2021 and work there will move towards evaluating the potential of re-opening the underground operations. At our Beaconsfield Gold Mine, we await the receipt of the independent reserve assessment report and the economic model. Getting Beaconsfield operational is seen as an important driver for future revenues and profits.”

Hellyer operations update

2020 saw consistently improving production output at Hellyer, driven by a systematic plan that increased capacity at the plant to around 1.4 million tpy by year end. This throughput compares to the initial project steady state forecast of 1.2 million tpy and a revised throughput target of 1.5 million tpy planned for the end of 1Q21. In addition, the company completed its US$55 million debt refinancing package for the asset in December and secured Hellyer’s concentrate off-take until end of mine-life for the tailings reprocessing operations.

Overall production for the 2020 comprised:

  • Lead concentrates of 38 319 t - up 53% from the previous year (2019 FY: 24 980 t).
  • Zinc concentrates of 19 019 t - up 22% from the previous year (2019 FY: 15 646 t).

Payable gross gold production for 2020 was 5452 oz and payable gross silver production was 1 106 440 oz. These saleable precious metals reported to the lead and zinc concentrates.

Major new Hellyer tailings construction project

The long-term mining and processing plan called for the construction of a new tailings dam at the Hellyer operations. This new tailings dam (TSF2) will service the existing life-of-mine operations from the tailings retreatment project. In addition, this new dam will provide for additional tailings storage capacity in the emptied TSF1 dam for a potential re-opening of the Hellyer underground mining operations, where significant high-grade mineralisation still exists, as previously reported.

Construction of TSF2 commenced at Hellyer in 4Q21. Tailings deposition into Stage 1 of the new TSF2 is scheduled to start around the end of 1Q21.The capital cost of Stage 1 TSF2, when completed, will be around AUS$16.7 million. This stage comprises both the earthworks of the first lift as well as the foundations and water management infrastructure for the fully completed dam. The completed TSF2 to final stage is estimated to cost around AUS$30 million in total and this has been budgeted for in Hellyer’s financial model.

Beaconsfield Gold Mine update

NQ has commissioned independent consultants Pitt & Sherry in Tasmania, who are very familiar with the Beaconsfield mine when it was in operation up to the mine’s closure in 2012, to calculate the gold reserves and provide an economic model from the previously reported JORC (2012) compliant mineral resource estimate of 1.454 million t at 10.3 g/t Au for 483 000 oz. This work is expected to be completed by the end of 1Q21.

On the metallurgical front, detailed carbon loading analysis for the gold stripping circuit are awaited to finalise the full plant refurbishment and start-up costs and schedule.

Now that the Hellyer debt refinancing has been completed; the company’s focus will switch to getting Beaconsfield into gold production.

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