Aguablanca improves, ships more concentrate

Rio Narcea Gold Mines (RNG-T) has sold its second batch of nickel-copper concentrate from the Aguablanca nickel-copper mine, 90 km north of Seville, Spain.

The sale of 15,000 tonnes averaging 5.92% nickel and 6.03% copper is expected to generate net proceeds exceeding $9 million, with a provisional payment of 90% of that already paid. The sale was made under an existing long-term, off-take agreement with Switzerland’s Glencore International.

In May, Rio shipped the first 20,000 tonnes of concentrate (grading 4.7% nickel and 5.7% copper) produced during commissioning at Aguablanca. That sale generated around $7 million.

Glencore has agreed to buy all of Aguablanca’s nickel concentrate produced until 2010.

During the three months ended June 30, Aguablanca saw mill throughput climb 59% to 285,224 tonne, while nickel head grades slipped by around 7% to 0.64%, and copper head grades fell by 14% to 0.49% from first quarter values. In the end, the mine produced 1,163 tonnes of nickel and 1,290 tonnes of copper, for a nickel recovery rate of 63.7% (up 9.1%) and copper recovery of 92.3% (up 12.4%).

The improvement in throughput in Aguablanca’s semi-autogenous grinding mill is attributed, in part, to the installation of new discharge grates and liners in June. So far in July, nickel recoveries are exceeding 70%, with copper recoveries hovering around 88%.

Engineering and construction contractor Fluor continues to fine-tune the plant, and needs to attain at least 90% of design capacity before it can turn it over to Rio Narcea. Fluor has yet to begin performance tests required for completion.

The feasibility study at Aguablanca calls for throughput of 125,000 tonnes per month, recoveries of 82% nickel and 85% copper, and concentrate grades of 8-9% nickel and 4-5% copper.

Meanwhile, underground ramp development and infill drilling under the planned open pit at Aguablanca continues. The first phase of underground infill drilling to test mineralization below the proposed pit bottom is slated to wrap up by the end of the year.