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LONDON (Alliance News) - Metals Exploration PLC said an internal review into historical operational performance of Runruno mine has shown "several material discrepancies".
Shares in Metals Exploration were down 7.3% Wednesday at 0.79 pence.
The review, carried out by its new management team, does not impact the gold poured or sold during the period, stressed Metals Exploration. The review was focused on the BIOX circuit throughput at the Runruno gold-molybdenum project in the Philippines.
Past statements from the company said the BIOX circuit achieved 100% design throughput for extended periods of 2018. However, after the review - which was also conducted by a third-party consultant - it was realised that the circuit has yet to reach 100% throughput, achieving on average 31% in 2018.
For the 2018, then, Metals Exploration now believe the design throughput was reported 69% higher than its actual performance.
In a statement, the company said: "Management have undertaken a full review and analysis of the recoveries achieved to date at Runruno. There has been a material overstatement of all gold recoveries announced to date. This is evidenced by the material difference reported in the mine head grade and mill feed grade which was calculated incorrectly."
"Management can further confirm that the reconciliation of mine ore tonnes to ounces provides for a strong and accurate representation of the ounces that were mined during the period ending December 2018 however the dilution is significantly higher than those analysed in the bankable feasibility study leading to a lower mill feed head grade."
As a result, Metals Exploration issued a series of corrections for the throughput of its BIOX circuit that was reported during 2018.
In April, the company reported a throughput of "45% reaching a milestone event achieving and maintaining 100% of the design throughput rate", however, the company is now saying the average throughput for the quarter to March was 10.7%.
At its June annual general meeting, Metals Exploration initially reported "throughput is increasing steadily and has proven it capability of achieving 100% of design - having achieved 6 weeks at 100% in 2018". Now, the company is saying the BIOX circuit never achieved 100% throughput and averaged 47.2% in that six week period.
In a July operational update, Metals Exploration said "after having achieved 100% of design throughput early in Q2 2018, the BIOX circuit operated resiliently at and about these levels, demonstrating the capacity of the circuit".
The company has updated that to say the average throughput from January to the end of June was 21.8%, with the best month being April at 46.9%.
A July operations update said the circuit had "ramped-up and is progressing strongly with throughput having achieved 88% of design throughput". After the review, Metal Exploration noted the average throughput in July was 14.5%, with a one week period in the month achieving 38.5%.
In October, the BIOX circuit was reported as "stable throughout third quarter" with design criteria "being demonstrated". However, average throughput for the quarter was 39.1% with the best month being August which saw throughput of 47.6%.
As a result of these corrections, Metals Exploration said the stated recoveries have been "consistently overstated" due to the incorrectly calculated mill feed grades to the processing plant.
The company said: "In 2018, the corrected metallurgical recovery for the first 3 quarters is 55.6% against a previously reported recovery of 66.6%. This represents a reduction in gold recovery of 11%."
Metals Exploration added: "It is the view of management that this dilution of approximately 20%, which is not abnormal to operations, is ongoing and is leading to a reduced mill feed head grade and ounces produced. This dilution is expected to continue going forward. The management are currently engaging a third party review of the life of mine plan and are targeting to have an updated plan by end of the second quarter of 2019 with an update to the reserve and resource statement by end of the fourth quarter of 2019."