Heron Resources (ASX: HRR) is anticipating first zinc and lead revenue from its wholly-owned Woodlawn mine in New South Wales, after the company reported a maiden zinc concentrate shipment had departed from Port Kembla.
Comprising 5,000t of zinc concentrate, the shipment was bound for China-based IXM under an offtake contract.
Today’s news follows a previous shipment of lead concentrate which was been transported to IXM in late September, with about 700t of the material sent to IXM and a further 2,000t of lead concentrate to be exported during November and December.
Both the zinc and lead concentrate shipments have included commissioning material, which was combined with more recent production.
The average zinc concentrate grade was 46% and was within the contract specifications and consistent with the production plan.
According to Heron, all loading and logistics procedures from site to Port Kembla “ran smoothly” and to “agreed timetables”.
Heron chairman Stephen Dennis said the company had achieved a key milestone by generating its first cashflow from Woodlawn.
“Although significantly later than planned due to delays in completion of construction and plant commissioning, this achievement confirms the marketability of the Woodlawn products.”
“With all export logistics arrangements now proven, the continuing focus of operations is a on ramping up production, further improving product quality and accelerating delivery to our customers,” Mr Dennis added.
In addition to mining, Heron is also processing reclaimed tailings at Woodlawn.
The company noted the processing plant ramp-up was progressing with full plant capacity expected to be achieved by mid-next year.
Woodlawn delays and projected operation
First revenues from Woodlawn couldn’t come soon enough after a seven month delay in mine construction and a slower than planned ramp-up.
The delays generated a $91 million funding deficit. As a result, earlier this month, Heron raised the $91 million via a funding package comprising a $35 million underwritten entitlement offer, the issue of $52 million-worth of convertible notes and a $4 million stream over zinc by-product deal.
Once fully operational, Woodlawn is expected to achieve a 1.5 million tonne per annum production rate to generate 40,000tpa of zinc, 10,000tpa copper, 12,000tpa lead plus silver and gold credits.
Underpinning the production is 2.8Mt at 14% zinc equivalent in underground reserves and 9.5Mt at 6% zinc equivalent in reclaimed tailings.