LONDON (Alliance News) - Aureus Mining Inc Thursday said processing operations by the plant at the New Liberty gold mine in Liberia have still not restarted as expected and said it is hoping to secure more funding as its debt repayment deadline approaches.
Aureus was forced to suspend plant operations at its New Liberty gold mine on May 10 after problems with a circuit and heavy rainfall caused a "small overflow" from its tailings facility, with the leak from its facility mainly impacting the surrounding wetland area without causing any injuries or fatalities to individuals.
However, investigations are ongoing and Aureus said it has provided additional water wells to the closest settlement, the village of Jikando, to ensure there is "no impact" to local residents.
As a result, authorities shut down the miner's plant operations whilst it carried out an investigation and waited for Aureus to submit a plan to deal with the aftermath and to convince authorities that operations can restart safely.
Aureus is now working with the Environmental Protection Agency of Liberia, the Ministry of Lands, Mines and Energy and other stakeholders to mitigate against any risks.
Importantly, getting the suspension lifted seems to be taking longer than the company originally envisaged as Aureus said last month it expected to be able to restart the plant at New Liberty by the end of last week.
On Thursday, Aureus said operations have not restarted but "significant progress" has been made that should allow the plant to recommence processing "mid-June".
To outline the current state of play, Aureus has managed to secure permission from the Environmental Protection Agency to discharge from its tailings storage facility and has also been issued with a permit for future discharges.
Modifications to the plant and the detoxification circuit, one of the causes of the initial incident, are also nearing completion. The circuit contributed to the leak because Aureus claims it was not operating within the original design specifications.
The miner has now submitted a detailed plan outlining how processing operations will be restarted and that is currently being reviewed by the Ministry of Lands, Mines and Energy. Approval of that plan is vital to operations restarting.
Notably, the Ministry has stated its "commitment to working with the company to recommence operations," according to Aureus.
Importantly, Aureus said the plan outlines a "gradual ramp-up" of waste and low-grade ore, without detailing how long the ramp-up will take, and said the plan includes "periods of plant downtime" to allow for testing, suggesting the new plan may impact production and that the plant will be under a watchful eye when it restarts.
Aureus is also having to adjust its plan as a result. The miner was planning to conduct a full reline of the ball mill which helps to crush ore before processing at the end of this month, but the company will now undertake that work before recommencing operations in order to minimise downtime at the plant and to increase efficiency.
The incident and the subsequent consequences were a major blow to Aureus as commercial operations had only started a matter of weeks before and had managed to get recovery levels up to over 90% before the suspension.
The incident, however, did not just impact the gold plant as it had a knock-on effect on mining operations and the company's ability to pay down its debt.
Although mining operations have continued, the absence of a plant means it has to be stockpiled as it has nowhere to be processed. On Thursday, Aureus said mining has continued with a current run of mine ore stockpile balance of 105,694 tonnes of ore graded at 4.02 grammes of gold per tonne. That suggests there is around 14,987 ounces of gold lying within that stockpile, but the ultimate amount recovered will vary on recovery rates and other factors.
More importantly, the suspension placed pressure on the miner's ability to repay its debt to its lender, International Finance Corp, which has provided numerous extensions to the repayment that was originally due at the end of January.
The latest extension gives Aureus until the end of this month to make a repayment, but with operations still suspended that looks unlikely unless the miner takes action.
Aureus did not provide much detail concerning debt repayments and funding on Thursday, but said it is in "advanced discussions" about securing "additional funding" in the short term from a "potential strategic partner".
Aureus shares were down 6.2% to 3.17 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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