Centrex Metals has announced it is deferring start-up operations at its Ardmore phosphate project, south of Mount Isa, and implementing cost-cutting measures.
The announcement comes within two months of the company completing on-site assembly of a 70-tonne per hour start-up plant, which can be upgraded to meet the proposed full-scale Ardmore production of 800,000 tonnes per annum of concentrate.
“While funding options for the completion of the trial mine are being pursued, the start of operations will be deferred and the company is taking proactive measures to reduce costs,” Centrex said in a statement to the ASX this week.
“The company has been progressing various potential funding solutions in order to supplement the cash position of about $4 million, including discussions with potential strategic offtake partners, phosphate marketing groups, targeted resource funds and institutional investors.”
Centrex highlighted a number of factors which have hit near-term phosphate rock prices.
These included a poor planting season in North America, a supply overhang in Morocco and changing agricultural practices in China.
Prices were expected to recover from 2020, with strong gains forecast through 2021-22, Centrex said
With assembly of the start-up plant at Ardmore complete, the company had secured the site and was progressing all other required activities to advance the trial mine following fund raising being concluded, it reported.
These activities include targeted marketing of additional trial concentrate sales, and progressing logistics and contracting in relation to mining and other operational activities.
“It is prudent that the company now reviews its cost base so as to retain value and internal capability whilst funding discussions are progressed in the prevailing phosphate fertiliser market,” chief executive officer Simon Slesarewich said.
“We look forward to securing the required funding and advancing the trial mine as soon as possible to demonstrate the quality of the Ardmore product and further advance the project to align with the expected rise in phosphate prices in the medium term.”