Sierra Rutile reports increase in mining production

Production soared last year for mining company Sierra Rutile as it remained on track of operations and expansion projects.

Total rutile production for the year increased 39% to 94,493 tonnes while ilmenite rose 38% to 22,008 tonnes.

The company reported production of 25,502 tonnes of rutile and 6,378 tonnes of ilmenite, during the fourth quarter.

The results followed the construction of the Lanti Dry Mining project in Sierra Leon, which was completed during the last quarter with first ore successfully processed.

Sierra Rutile has expanded its production with the completion of a pre-feasibility study into the dry mining of the Gangama deposit in Sierra Leone.

The business projected a pre-tax net profit value of $507m, a 238% pre-tax internal rate of return and payback period of eight months from the project.

Gangama Dry Mining is expected to increase production by 200,000 tonnes per annum with a 22-year project life.

"The quarter has seen further major advancements for Sierra Rutile. Firstly, we have successfully implemented our first new production expansion, demonstrating that we can bring on new projects as well as restoring our existing assets to much higher levels of sustainable operation," Chief Executive Officer, John Sisay, said.

"Secondly, we have identified an exceptional new project with Gangama Dry Mining that is already low-risk, having just implemented a similar project at Lanti, but which also has highly impressive project economics."

Sisay said he predicted similar success during 2013.

Shares climbed 2.61% to 59.00p at 11:46 Wednesday.

RD