MZI exports nearly 13,000 tonnes of L88 and L70 in December

By Trevor Hoey. Published at Dec 14, 2016, in Mining

MZI Resources (ASX: MZI) informed the market on Wednesday that improved production at its Keysbrook plant would ensure substantial product shipments in December with a bulk shipment of its premium L88 (circa 6240 tonnes) already completed.

Management also said that 6500 tonnes of L70, along with 1000 tonnes of zircon concentrate were planned for shipment before the end of the month.

While this is a significant development in terms of revenue generation, it should also be a reassurance that the optimisation project relating to the Keysbrook wet concentrator plant has been successful.

Retracement in the group’s share price over the last two months could be connected with investor uncertainty regarding the plant optimisation program.

Given that the company’s shares are now trading close to their six month low of 24 cents and well below the 12 month consensus price target of 56 cents, contrarian investors may take a liking to the stock.

However, potential investors should not use share price expectations, price targets, broker projections or production estimates alone as the basis for an investment. Those considering MZI should seek independent financial advice.

Optimised Keysbrook plant delivering improved recoveries and grades

Commissioning of newly installed high-performance spirals and improved screening equipment commenced on November 20. Commenting on the plant’s post optimisation performance, Managing Director, Steve Ward said, “Both Heavy Mineral Concentrate (HMC) recovery and grade have steadily increased to design levels which have now been achieved during a four-day test run at design throughput levels”.

Ward expects that continuous improvement work will continue to deliver even higher levels of performance, and on this note HMC recovery levels above nameplate capacity have already been achieved.

Improved operational performance chimes in with commodity price recovery

Management anticipates a flow on impact from the recovery of higher grades to positively impact the performance of its Picton mineral separation plant when the group starts its next major processing campaign in February 2017 under its toll treating agreement with Doral.

Ward underlined the fact that MZI’s improved operating performance comes at a time when market conditions for mineral sands products, in particular its higher value commodities such as leucoxene and zircon concentrate, are improving.

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