Heron Resources Limited (ASX:HRR TSX:HER, “Heron” or the
“Company”) is pleased to provide the following
construction update on the Company’s Woodlawn Zinc-Copper Project
in New South Wales, Australia. Significant progress has been made
on site, most recently with the commencement of process plant
foundations and first deliveries of process plant equipment.
The project is progressing on track and within budget.
- Project development remains on track for year-end commissioning
– overall completion at 35%
- Critical path earthworks delivered on time and handed over to
the concrete contractor
- Process plant concrete foundation works commenced in February
with 777m3 poured to date
- First processing plant equipment deliveries received
- Appointment of senior mining, processing and support
operational personnel
- Key operational contracts awarded and additional tenders for
services advanced
- International Lead Zinc Study Group report a 495,000 zinc metal
deficit for full year 2017
Commenting on the progress, Heron’s Managing
Director, Mr Wayne Taylor said:
“The Woodlawn Zinc-Copper Project remains on
track for start of commissioning by the year’s end. Since the first
soil was turned in August last year, our operational staff and
contractor teams have been focused on progressing critical path
earthworks, concrete works, detailed design and procurement of
equipment for the processing facility. The development is now 35%
complete, consistent with the project delivery schedule and
importantly within budget. In parallel with the Woodlawn
development activities, the zinc market supply deficit has
continued and is expected to remain in place well beyond first zinc
production from Woodlawn, supporting favourable future project
economics.”
Engineering Procurement &
Construction (EPC)
Sedgman continues to advance the EPC works in
accordance with the project timeline and with the process plant
delivery date for commissioning remaining unchanged. The major
project construction progress measures are:
- Overall Project (35% complete)
- Earthworks (70% complete)
- Detailed Design (75% complete)
- Equipment Purchase (65% complete)
- Concrete (23% complete)
- Offsite Fabrication (20% complete)
Of the critical path activities, completion of
the process plant pad earthworks was achieved on-time allowing for
the handover of these areas to the concrete works contractor in
early February. Since this time, 777m3 of concrete has been poured
on various plant foundations. This concrete work is also on track
to meet critical path schedule dates.
The first equipment arrivals have occurred with
the delivery of the lime silo, and various conveyor components,
pumps and flotation blowers.
Figure 1: Primary crusher and ROM retaining wall
foundations.
http://www.heronresources.com/tsximages/20180328/280318_fig1.jpg
Figure 2: IsaMill foundations – reinforcing
steel work.
http://www.heronresources.com/tsximages/20180328/280318_fig2.jpg
Figure 3: Reclamation area (left), flotation
area (right) and concrete pour at the primary crusher (rear).
http://www.heronresources.com/tsximages/20180328/280318_fig3.jpg
Figure 4: First process plant equipment
deliveries.
http://www.heronresources.com/tsximages/20180328/280318_fig4.jpg
Earthworks
Critical path work areas have been completed and
handed over to the concrete contractor. Other significant works
continue on the tails storage facility construction (Figure 5) and
the box cut to access the underground (Figure 6). The earthworks
are 70% complete overall with the tails storage facility at 40% and
box cut at 84%.
Figure 5: Tailings storage facility 4
construction.
http://www.heronresources.com/tsximages/20180328/280318_fig5.jpg
Figure 6: Box cut excavation – second bench.
http://www.heronresources.com/tsximages/20180328/280318_fig6.jpg
Production Readiness
Recruitment – The Mining Superintendent,
Processing Superintendent, Maintenance Superintendent and Site
Services Manager roles have all been filled. The Company continues
to recruit personnel in line with the timetable for the start of
operations and continues to receive strong interest in employment
opportunities at Woodlawn.
Operational Contracts – The underground mining,
water treatment and port services contracts have all been awarded.
The underground contractor, Pybar Mining Services, is scheduled to
commence on site in August. The water treatment contractor, Ixom,
is completing final detailed design for the provision of a 1
megalitre per day water treatment plant, with the site work
scheduled for commencement in mid-May. The supply of tailings
mining equipment and specialist design, commissioning and training
services is expected to be awarded in the next month. The provision
of domestic concentrate transport services to the export port is
currently being tendered.
Zinc Market Outlook
The International Lead Zinc Study Group released
final annual production numbers for 2017 on 2 March 2018. The
reported metal supply deficit was 495,000t with the last 4 months
of supply for the year consistently below demand.
Zinc Mine Production 2017
13,230 kt
Zinc Metal Production
2017
13,724 kt
Zinc Metal Usage
2017
14,219 kt
Other significant metrics reported included a
flat year-on-year metal production, 2016: 13,739 kt v’s 2017:
13,724 kt and consumption growth of 2.6%: 2016: 13,861 kt v’s 2017:
14,219 kt.
One of the largest global zinc market producers,
Teck Resources Ltd, provided their insights to future global zinc
production and consumption late in February 2018. They conclude
that the current producers and committed projects will not meet
metal demand requirements, and the list of major uncommitted (yet
to be funded) projects will still leave a supply deficit out to
2025. Estimates of the global zinc metal stocks inclusive of LME,
SHFE, bonded warehouse and hidden stocks show a steady and
consistent draw, the rate of which since 2013 is unsustainable.
These market factors are expected to provide continued support to
strong zinc prices.
About Heron Resources
Limited:
Heron’s primary focus is the development of its
100% owned, high grade Woodlawn Zinc-Copper Project located 250km
southwest of Sydney, New South Wales, Australia. In addition,
the Company holds a significant high quality, gold and base metal
tenement holding regional to the Woodlawn Project.
For further information, please visit www.heronresources.com.au or contact:
Australia:
Mr Wayne Taylor
Managing Director and Chief Executive Officer
Tel: +61 2 9119 8111 or +61 8 6500 9200
Email: heron@heronresources.com.au
Jon Snowball
FTI Consulting
+61 2 8298 6100
jon.snowball@fticonsulting.com
Canada:
Tel: +1 647-862-1157 (Toronto)