'Turnaround' quarter hailed for New Century

NEW Century Resources MD Patrick Walta has hailed a “turnaround quarter” for the zinc business he’s overseeing in north western Queensland, despite the worst market for the galvaniser in the past 10-12 years.
'Turnaround' quarter hailed for New Century 'Turnaround' quarter hailed for New Century 'Turnaround' quarter hailed for New Century 'Turnaround' quarter hailed for New Century 'Turnaround' quarter hailed for New Century

Positive cashflow dawning at Century

The Century tailings reprocessing operation had its first month of positive cashflow in September, with all-in sustaining costs of US$1.02 per pound versus a three-year low zinc price of $1.05/lb and despite treatment charges being at 10-year highs.

September yielded 10,000t of the 26,000t produced in the quarter, with 27,000-33,000t forecast for the December period at C1 costs of 87-98c/lb - with C1 costs in September of 90c/lb.

Walta noted 70% of the company's production costs are fixed, meaning additional output has a significant impact on costs.

With A$53 million in cash and receivables and $27 million left in capital spend, "we feel that we are in a good position", Walta said on a conference call.

The company is also finalising its debt situation to ensure a "working capital backstop".

Once the Century operation reaches a full production rate of 12 million tonnes per annum in 2020, production costs are flagged to be sub-US70c/lb.

Walta claimed that two-thirds of the world's zinc production would be underwater at that price.

Shares in New Century were up 7% to A37c in midday trade, capitalising the company at $236 million.

The stock is up 50% from levels early this month.