After a couple of recent modifications to the mine's processing facility, Anaconda is predicting a record month of production in August as it gears up for a $160 million expansion.
With Murrin Murrin's ramp up 15 months behind schedule, Forrest claims the worst is now behind Anaconda as the Perth-based company continues its ambitious quest to slash the cost of producing nickel to less than US$1 per pound.
However, he concedes that cash production costs - the key statistic used to judge the mine's profitability - won't be published until the June quarter of next year.
By then, Murrin Murrin should be operating at 80% of its rated capacity of 45,000 tonnes per annum, he predicts.
"I believe we should get this plant ticking along at around the 80% [capacity] area so we can get a good handle on it [cash cost]," he said in an interview.
Forrest said that Murrin Murrin (60% owned by Anaconda and 40% Glencore) is likely to produce more than 1500t of nickel in August, up from its July output of 1260t, but still well short of the rated capacity of around 3750t per month.
The Anaconda chief's latest burst of optimism is related to the removal last month of a major bottleneck in the plant's thickener section.
"Daily production exceeding 100 tonnes nickel [75% capacity] has been achieved since installation of new mixed sulphide thickener rake," Anaconda said in its quarterly.
During a telephone conference call for stockbroking analysts yesterday, Forrest was in fine fettle as he sang the praises of the latest quick fix.
"Since the thickener rake was installed, you walk from one end to the other [of Murrin Murrin] and it is just a gentle, boring hum," he said. "It is not the hive of activity, of urgent rectifications and construction people everywhere, such as we've had in past quarters in 1999. Now you could fire a cannon through the place and not hit anyone."
In a later interview, Forrest said the company was in final negotiations with four potential vendors - two local and two overseas firms - to supply and deliver a fifth autoclave costing around $14 million.
The new unit, likely to be ordered this month, will have a design capacity of 16,000t per year. That is 50% more than the current autoclaves.
"We'll be shooting at commissioning the autoclave within 18 months of ordering it," Forrest said.
The autoclave is just one component of the fifth train expansion. The overall cost of the upgrade is being finalised by Minproc, an engineering firm, but is expected to range from $130-160 million.
Cynics argue that the "expansion" is necessary because the existing four autoclaves will probably struggle to get the mine above 80% of its capacity. To get the necessary economies of scale, Anaconda and Glencore must bite the bullet on a new (bigger) processing train, which will push the plant's nominal capacity up to 60,000tpy.
How will Anaconda pay for it? Murrin Murrin's claim against engineering group Fluor Daniel over the delays in plant completion will go to arbitration in five weeks time.
Analysts are tipping a pay-out of up to $500 million from Fluor. That should cover the cost of the expansion quite nicely.
Meanwhile, Forrest also revealed that Anaconda will host an analysts visit to Murrin Murrin in October - setting the stage for another big marketing push.
