New Century Resources (ASX: NCZ) is celebrating the revival of its flagship Century zinc mine in Queensland’s Gulf of Carpentaria, which it hopes will become the world’s fourth largest zinc operation at full production.
Friday marked the official reopening of the mine, which has been under rehabilitation since it was acquired by New Century more than a year ago. Attendees of the formal event included Minister for Resources and Northern Australia Matt Canavan and Queensland crossbencher Bob Katter.
The refurbishment of the mine was planned in two stages. Hydraulic mining operations officially commenced in early August for phase one, which focused on the initial restoration of the processing plant’s southern flotation train and supporting infrastructure to bring capacity up to 8 million tonnes per annum.
The resulting tailings and zinc concentrate production will be exported via the company’s port facility at Karumba in northern Queensland.
The second phase, due for completion in the 2019 fourth quarter, involves refurbishing the plant’s northern train and infrastructure to progressively ramp up production to 15Mtpa.
The Century mine was once the world’s third largest zinc mine before it was mothballed in 2016 by previous owners MMG (ASX: MMG) due to low prices and depleted reserves.
New Century completed the acquisition of an initial 70% interest in the mine in July last year and subsequently recommenced trading on the ASX.
The company then snapped up the remaining 30% stake in February through the acquisition of privately-owned Century Bull Pty Ltd.
The mine’s existing infrastructure included a large-scale multi-train processing plant, 700-person camp, private airport, grid power connection, a 304km slurry pipeline, the Karumba port facility and concentrate transhipment vessel.
New Century has spent $50 million on the phase one development and has calculated a $63 million budget for phase two.
The mine will reprocess tailings from the Century Tailings Deposit, which has been assessed to hold proved ore reserves of 2.3Mt of zinc and 29.7 million ounces of silver.
The company also locked in its first offtake deals in February, committing to supply about 750,000t of zinc concentrate to Mercuria Energy Trading and Transamine Trading SA.
One of the main people behind the project is New Century corporate director Tolga Kumova, who was a founder and former managing director of Syrah Resources (ASX: SYR).
Last week, he tweeted: “The mine was [originally] designed to run for 16 years. Our team has come along and extended the life of the project another 6.3 years as the world’s fifth largest zinc mine”.
However, the company is hoping to be bumped up to fourth place when it reaches full production capacity.
To fast-track the expansions, New Century announced earlier this month it had secured a $40 million loan with National Australia Bank (ASX: NAB).
According to the company, the debt facility will allow it to commit to its planned northern train float cell refurbishment as well as the ordering of long lead items without delay, instead of waiting for sufficient cashflow from current operations.
“The facility provides a great opportunity to grow our business and ultimately maximise value creation for shareholders,” New Century managing director Patrick Walta said.
The debt facility remains subject to completion of legal documentation, which is anticipated to be finalised shortly.
New Century shares climbed to a high of $1.125 following the announcement of the mine’s reopening. By early afternoon trade, its stock had fallen almost 1% to $1.05.