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Dugald River zinc mine has ended 2020 on a high note for production, while significantly lifting estimates of the amount of zinc the orebody holds for future mining.

MMG reported record quarterly zinc production of 52,446 tonnes at the North West Queensland site for the last three months of 2020.

This was a 14 per cent increase on the previous quarter and took production for the full year of 2020 to a record 177,704 tonnes of zinc in zinc concentrate, a 4 per cent increase on 2019, the company said.

In its quarterly report the company said the good results in late 2020 reflected ongoing benefits achieved from work to open up new operating areas and improve stability of the underground environment, with improved mining and milling grades reflecting reduced dilution.

An ongoing focus on mill performance and processing circuit optimisation resulted in new records also being set for recovery during the fourth quarter.

On the back of a successful 2020, Dugald River is expected to produce between 180,000 and 190,000 tonnes of zinc in zinc concentrate during 2021, an increase on prior year guidance.

The operation is targeting sustained delivery of annual mine capacity of two million tonnes and zinc production approaching 200,000 tonnes per annum by 2022.

MMG said zinc mineral resources had increased at the site, primarily as a result of the discovery of thick, high-grade zones within the main lens in the southern part of the Dugald River orebody.

The primary zinc resource had increased in tonnage by about 14 per cent, it said. High-grade lead and silver are also present in these areas of structural
thickening.

"Further interpretation work has indicated that these thicknesses in the zinc orebody could be repeated within the current in-mine footprint requiring prioritised infill drilling," the company stated.

Signs of a wider zinc ore body than originally expected, at relatively shallow depth, remain subject to ongoing study.

But MMG said they underpinned a growing expectation that Dugald River’s mine life could be extended or production volumes increased over future years.

In its commodities outlook, MMG noted that zinc had been second only to copper as the best performer amongst LME base metals in 2020.

"The market anticipates strong infrastructure spending in the near to medium term, with zinc being a crucial industrial metal that will benefit from an increase in construction activity," it said.



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