Chinova Resources is fast-tracking work to bring its Merlin molybdenum-rhenium-copper mine online as its current North-West Queensland operations wind down.
The first round of redundancies was recently completed as the mine life of its Starra copper-gold sites waned, general manager and SSE Mick Breen said.
“As operations transition towards care and maintenance, the business will unfortunately need to reduce the workforce from its current headcount of approximately 204 full-time equivalent employees, excluding contractors, to as few as 33 employees,” he said.
Processing ore from Starra 222 and Starra 254 came under Chinova’s Osborne Extended Mine Life project, making the most of the Osborne flotation plant, 150km south of Cloncurry, after production from the Osborne mine ended.
There were blue skies ahead, Mr Breen said.
“However, in response to these challenges, Chinova Resources is actively advancing the Merlin molybdenum-rhenium-copper underground project, recognised as one of the richest molybdenum deposits discovered to date and the most advanced project within Chinova’s pipeline,” Mr Breen said.
“Our project team is adopting a fast-track approach to modernising historical studies with the goal of bringing the operation online as soon as possible.
“This project has the potential to extend the mine life by an additional 10 years, generating over 200 jobs during the construction phase and sustaining approximately 130 jobs during the operational phase, thus providing a significant boost to the local economy.
Merlin lies within 5km of the Starra pits, so could piggyback on the extensive established surface infrastructure.
It has an indicated mineral resource of 6.7Mt at 1.4 per cent molybdenum and 32ppm rhenium, and an inferred resource of 0.2Mt at 0.8 per cent molybdenum and 13ppm rhenium, both reported above a cut-off grade of 0.5 per cent molybdenum.
Chinova completed a feasibility study for Merlin in 2014 and the project was set to go ahead before a large fall in molybdenum prices.
Now in care and maintenance, Merlin has 3.5km of underground access decline developed and maintained.
Molybdenum is used as a steel alloy, including in the aerospace and defence sector, where its applications include making top-of-the-line warheads, nozzles, and tankers.
The molybdenum spot price increased 20 percent in January over the same time 12 months before, according to online data from YCharts.
Mr Breen said also Chinova Resources had committed to an exploration program of more than $10 million over the next 48 months.
This would focus on near-mine prospects that aligned with the company’s strategic project pipeline, he said.
“This also includes funding to update feasibility studies for the Mount Elliott, Swan, and Mount Dore projects, which collectively have the potential to extend the mine life by over 25 years,” Mr Breen said.
“These projects will play a pivotal role in mitigating the economic strain in the region and securing long-term employment opportunities.”