Aus Tin Mining Limited (ASX:ANW) CEO, Peter Williams talks about major developments at both the Granville and Taronga projects.
Katrina Bullock: Hello. Katrina Bullock for the Finance News Network. And joining me again from Aus Tin Mining (ASX:ANW) is CEO Peter Williams. Peter, welcome back.
Peter Williams: Thanks, Katrina.
Katrina Bullock: Aus Tin Mining announced this morning a couple of pretty major developments at both the Granville and the Taronga projects. Could you please summarise the key points for each?
Peter Williams: Yeah, look, I'd be pleased to. We had to make a couple of tough decisions, but decisions made in the best interest of the business. So, following some equipment failure at the Granville mine, we've decided to take the opportunity to undertake a strategic review that's expected to take a number of weeks, and during this period, the operations will be reduced or even suspended, and to reduce costs, staff have been asked to take annual leave. Now, this equipment failure comes at an unfortunate time as the project had been on the improving trend line, but we're yet to achieve some of our KPIs, so changes are required and the strategic review is intended to identify the pathway forward for these.
At Taronga, and this is partly because of the performance at Granville, we've decided to defer further work on stage one. But also, because of the intense drought conditions being experienced in the area, we had already been considering some alternative options to the trial mine, and we'd been working with the New South Wales Government on some alternative plans. And we've instead decided to pursue an interim program of drilling metallurgical test work, from which we can use this data to progress the project through to feasibility.
Katrina Bullock: Now Peter, what do these changes mean for the respective projects?
Peter Williams: Well, for Granville, it means an inevitable reduction or suspension in production, but we're loathe to revert back to treating lower-grade scats or incurring higher costs for replacing gear just to keep the operation going. And I think the strategic review will be a timely opportunity just to critically review the gaps between the actual and target KPIs that we've gotten and what areas need to be improved. And I think, to give you an example, the number of hours that we're currently operating is about half. We've identified a plan as to how to increase the hours, and in essence it's transitioning to 24-hour operation, but there are a number of things we need to do in order to do that.
From a timing perspective, this has really been the first opportunity we've had to conduct such a review, because prior to that, the operation was constrained by obvious things, such as the absence of the crusher and suitable feed material to the plant. So, at Taronga, the proposed interim program means it will still be able to attain the data that we require to progress through to feasibility. And whilst that work from drilling metallurgical test work won't be as comprehensive as what we would have got from the trial mine and the processing plant, it will still be extremely valuable and it certainly has the benefit that we'll be able to complete it much quicker and for a much lower cost.
So, what we're saying is that we're just simply deferring the stage one trial mine. We're not abandoning it, and the simple fact is with the current intense drought conditions being experienced in the region, when some industries are having to scale back or shut down due to lack of water, starting a mine, even small, doesn't make a lot of sense.
Katrina Bullock: So, notwithstanding the headline changes, it sounds like there's actually quite a positive outlook for the future.
Peter Williams: Yeah, look, I believe so, Katrina. I think at Granville it will be a good opportunity to critically review the operation, then be in a position to make an informed decision how to best extract value from the project. And at Taronga we'll be able to generate data much quicker and cheaper and move sooner to demonstrate the true value of this world-class asset.
Katrina Bullock: Peter Williams, thanks for the update.
Peter Williams: Thanks, Katrina.