The Santa Rita Operation consists of a simple, low cost, open pit drill and blast, load and haul mining operation which feeds a conventional, low technology nickel sulphide concentration plant. The expected mine life is approximately 20 years remaining reserves, based on the current ore reserves.
The operation is well located, close to key infrastructure, including power, water and transport. It is approximately 260km southwest of Salvador, the capital of Bahia in Brazil, approximately 6km from the town of Ipiaú, which supplies the majority of the operation’s workers and 140km from Ilhéus, one of the deepwater ports from which Mirabela exports its nickel concentrate. The other port being Salvador.
The Santa Rita deposit comprises disseminated nickel and copper sulphide mineralisation up to 140m thick and averages 40m thick over a continuous strike length of more than 2km and 1km depth.
Mirabela acquired the Santa Rita deposit in 2004, completed commissioning of the operation in October 2009, commenced production of nickel concentrate in November 2009 and entered commercial production in January 2010.
Since commencing operations, the mine has had a strong safety performance with a Lost Time Injuries Frequency Rate of 0.57 for 2013. This strong performance is testament to the high priority and commitment given to safety by the operational team. Health and safety training programmes remain ongoing; aimed at continuous improvement.
Mirabela has successfully delivered the Santa Rita project with mining operations and the processing plant now running at full capacity. Aggressive cost reduction and optimisation programmes are progressing and delivering results. Studies are currently underway to increase plant throughput capacity to approximately 9.0Mtpa of ore milled.
Mirabela produces a high quality nickel-copper-cobalt concentrate with metal content of approximately 20% and an average nickel content of approximately 14.5%. All concentrate produced to date has been sold within contract specifications.
Mirabela has competitive offtake agreements, covering 100% of its nickel production up to 31 December 2014. Half of the nickel concentrate production is under an offtake agreement with Norilsk Nickel Harjavalta OY (Norilsk) until the later of 31 December 2014 or 66,500t of nickel in concentrate has been delivered.
The other half of Mirabela’s nickel concentrate production is under an offtake arrangement with Votorantim Metais Niquel S.A. (Votorantim), a domestic customer. In November 2013, Votorantim claimed that owing to a force majeure event it is not obligated to purchase nickel concentrate pursuant to the off-take agreement between Votorantim and Mirabela Brazil. Mirabela and Votorantim are currently engaged in an arbitration process to resolve this matter
As a result of Votorantim’s notice, the company has been selling product to an International Trading House (ITH) under various short term sales agreements since the fourth quarter of 2013.
The company will continue to be reliant on short term sales agreements until a long term off-take agreement has been secured. Mirabela expects to commence a full tender process for the 50% of nickel concentrate that will be out of contract at the end of December 2014, during the third quarter of 2014.
Mirabela delivers to Norilsk CIF Rotterdam, from where it is transported to Norilsk’s Harjavalta refinery in Finland. Sales terms to ITH is either EXW bonded warehouse Salvador Port or FOB Ilheus Port in Brazil.
Payment for the concentrate is determined by reference to the metal content of the nickel concentrate produced and market metal prices. Mirabela receives an average of 81% of the metal content in the metal concentrate.
Layout of the Santa Rita Operations