Industry grappling with uncertainty surrounding coronavirus

WHILE ASX miners are yet to report coronavirus-related production interruptions, Sandfire Resources and Syrah Resources have cautioned the market on guidance due to the ongoing uncertainty.
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Sandfire said its DeGrussa copper-gold operations in Western Australia continued to operate at full capacity, and work was continuing on its growth projects, Tshukudu in Botswana and Black Butte in Montana.

The company said it was monitoring and planning for the potential impact of COVID-19 on operations, including health and safety, performance of key contracts, workforce and supply availability and government direction.

"Given that Sandfire, in common with many other companies, is operating in a time of heightened business risk, the company is not currently in a position to reliably measure or accurately predict the impact that this pandemic may have on future production and costs at DeGrussa, or on the timing of decisions and the delivery of our development pipeline at Tshukudu and Black Butte," the company warned.

It added that investors and market participants should exercise caution in relying on any previous guidance.

DeGrussa's full-year guidance is 70,000-72,000 tonnes of copper and 38,000-40,000 ounces of gold, while final investment decisions on Tshukudu and Black Butte are expected later this year.

Graphite producer Syrah said it was maintaining vigilance at its Balama operation in Mozambique.

Due to the "degree of market and operational uncertainty beyond Q1 2020", Syrah is suspending its full-year guidance of 120,000-150,000t of graphite, which was in line with its moderated production strategy.

Syrah said it remained on track to deliver a 20-25% reduction in costs, in line with guidance.

The company said it expected its March 31 cash balance to be in line with guidance of US$64.6 million and its balance sheet was well-positioned to navigate the uncertainty.

"Despite the near-term uncertainty due to COVID-19, the long-term market fundamentals for natural flake graphite remain intact, with ongoing commitment to the decarbonisation of the transport sector via lithium-ion powered electric vehicles by supply chain participants and governments," Syrah said.

South32 said each of its global operations were impacted differently and it was implementing tailored business continuity plans.

"This situation is unlike anything many of us have experienced in our lifetimes," CEO Graham Kerr said.

"There is uncertainty about what the weeks and months ahead look like, and we will face our share of challenges."

From Monday, Fortescue Metals Group's office-based workforce in Perth and Karratha will begin a temporary rotating, work in office/work at home roster commencing.

"We continue to operate safely in line with our production guidance and there is no impact to our shipping schedule to customers in China," CEO Elizabeth Gaines said.

"Most importantly, we recognise our role in responsibly delivering iron ore shipments in the interests of maintaining flows of taxes and royalties which contribute to economic activity, at this time of critical national need.

"We have a strong track record of using technology to create a flexible workplace and this provides the foundation for us to ensure our workforce remains healthy, productive and engaged during this time."

WA gold producer RNC Minerals maintained guidance of 90,000-95,000oz at all-in sustaining costs of US$1050-1200/oz, but said it had implemented strict control measures at its Beta Hunt and Higginsville operations.

The Toronto-listed company said it was building its run-of-mine stockpiles to minimise any disruption to supply chains and had employed an on-site nurse to monitor the status of people entering and leaving its operations.

Africa-focused diamond miner Lucapa Diamond Company said it was "reviewing various scenarios and alternative sales and logistics channels on its mines with the objectives of keeping its employees safe, preserving cash and value in the current environment".

Among the explorers, Platina Resources has suspended exploration but will continue "corporate activities", Jervois Mining will delay the release of its ICO bankable feasibility study and suspend exploration in Uganda, and Ragnar Metals and Chase Mining Corporation have postponed drilling in Sweden and Canada, respectively, due to travel restrictions.

Inca Minerals said it had no plans to pull back on exploration, while Tempus Resources will push ahead with its planned Canadian gold exploration in the June quarter.