Operational issues have seen ASX-listed Sierra Rutile report a 13% fall in rutile production for the quarter ended March, with production reaching 32 000 t.
Production in the March quarter was down from the 37 000 t of rutile produced in the December quarter, with rutile sales volume over the same period dropping from 41 000 t to 30 000 t.
Ilmenite production in the March quarter fell to 12 000 t, from the 15 000 t produced in the previous quarter, while ilmenite sales volumes also declined from 12 000 t to 11 000 t.
Sierra Rutile told shareholders on Friday that production for the March quarter was generally in line with expectations up until March when production was lost owing to water pump availability, below budget grades and a 19-hour power outage caused by a tree that was lodged on the power lines due to adverse weather conditions.
“Although our operating performance in the March quarter was slightly below expectations, we are taking steps to address the issues that contributed to the lower feed grades caused by delays in mining block preparation and unaccounted product losses. We are investigating the latter and implementing additional controls. We experienced two lost time injuries, both contractor related, and are implementing additional controls to improve our contractor onboarding and management processes,” said Sierra Rutile MD and CEO Theuns de Bruyn.
“Production for the quarter was generally in line with expectations, but we encountered some challenges in March when production was lost due to water pump unavailability, below budget grades at DM1/4 and a 19-hour power outage. Net unit costs for the quarter were higher than anticipated due to the reduced production.
“Although realised rutile pricing softened as a result of low pigment demand, particularly in Europe, we remain optimistic about our by-product sales in 2023, with the majority of such revenue anticipated in the second quarter and fourth quarter,” said De Bruyn.
During the quarter under review, Sierra Rutile reported a revenue of $41-million from rutile sales, down from the $64-million in the previous quarter.
“Strong operating cash flow and the recovery of further monies from our insurance claim for the warehouse fire in February 2022, allowed us to invest nearly A$7-million into capital projects during the quarter. The Sembehun definitive feasibility study and associated environmental, social and health impact assessment continued to progress well and are on track for completion by the end of 2023. The results from our annual resource and reserve statement were very positive providing further confidence that Sierra Rutile can support a consistent production profile for the coming years, including during the expected Sembehun construction and ramp-up phases.”
Despite the softer quarter of production, Sierra Rutile has maintained its full-year rutile outlook at between 140 000 t and 144 000 t.
