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Early results from a near-mine drilling program at MMG Dugald River suggest a wider zinc ore body than originally expected, at relatively shallow depth, the company says.

MMG said further detail would be provided as results came to hand, with the potential for it to support mine life extension or the expansion of the operation.

Dugald River is targeting zinc production approaching 200,000 tonnes per annum by 2022.

MMG said the company was optimistic that this target was achievable and
sustainable into the future.

The company’s latest quarterly report showed that Dugald River clocked up a new record for ore mined as the North West Queensland operation continues to ramp up.

The addition of new mining equipment, together with the ongoing benefits of work over the first half of the year to open up new operating areas, had seen continued success in the ramp-up of the mine, MMG said.

Monthly records for ore mined were set in July and August, with a quarterly record set for the period overall.

However milling volumes were lower as a result of an extended maintenance outage, the company said.

The impact of the shutdown on the quarterly production volume was partially mitigated by a 9 per cent improvement in zinc ore grades compared to the prior period and better recovery levels after enhancements to the grinding process.

MMG said the mine had produced 46,081 tonnes of zinc in zinc concentrate, and 6,401 tonnes of lead in lead concentrate during the quarter.

This was 6 per cent and 15 per cent higher than the June 2020 quarter respectively.

MMG maintains its existing 2020 guidance for Dugald River, with expected production of between 170,000 and 180,000 tonnes of zinc in zinc concentrate and C1 costs of US$0.70-0.75/lb.

The quarterly report noted that zinc prices had rallied 17 per cent in the past quarter.

As with copper, the zinc price had benefited from investment fund
interest, together with operational issues and COVID-19 related supply disruptions at a number of major mines, MMG said.

Further support has come from economic stimulus packages, in particular from China where manufacturing activity and steel production growth has added to demand