New Century Weighs Expansion Options at Century Mine

New Century Resources (ASX:NCZ) has revealed the results of an expansion study conducted at its Century zinc mine. It lays out the potential for a mine life extension into mid-2026.

According to New Century, the seven year lifespan extension could be achieved through developing Australia-based Century’s in-situ operations along with existing tailings operations.

The company also notes that other lifespan expansion possibilities remain, including an extension to the Silver King deposit and further assessment at Watson’s Lode.

New Century is currently in the midst of its tailings ramp up process, with Phase 1 being complete as of earlier this month. Additionally, the asset’s third mining cannon is now online and is generating a stable 8 million tonne per annum (mtpa) mining rate. The ramp up is set to reach 12 mtpa by the end of the third quarter of the 2020 financial year.

The expansion study explores three potential cases for operating costs and capital expenditure. The first case examines a tailings only operation that would see a 37 percent reduction in capital costs for the Phase 2 tailings ramp up. Prices would be slashed from AU$63 million to AU$40 million.

Capital use would be optimized to complete refurbishment of the remaining 45 percent of plant capacity, in turn reaching the zinc recovery target as well as tailings throughput of up to 12 mtpa.

Regarding the aforementioned in-situ operations, the study shows that based on tailings throughput of 10 mtpa along with 2 mtpa in-situ, life of mine average zinc production would reach 233,000 tonnes per year in concentrate. Meanwhile, lead production would reach a life of mine average of 29,000 tonnes per year in concentrate.

Total silver production would also reach 18.9 million ounces from zinc and lead concentrates.

The study lays out in-situ economics that the company describes as robust, and projects additional after-tax free cash flow of AU$422 million and AU$268 million in after-tax net present value for the overall Century operation. According to New Century, the combined operations stand the potential to generate over AU$1.5 billion in after-tax free cash flow.

New Century’s share price took a nasty hit on Tuesday (June 25) after the announcement, dropping 20.34 percent to AU$0.47 on the ASX.

As of Tuesday, zinc was trading at US$2,577.5 per tonne on the London Metal Exchange.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.