2012 Annual Report (2 April 2013) - Grange Resources

2012 ANNUAL REPORT
7
PAGE
Operational
Performance
Throughout 2012, Grange has continued
to develop its end to end – or “mine to
metal” planning, operational management
and reporting processes to further improve
productivity, and to ensure attainment
of production and sales schedules.
Grange also implemented programs
to improve the quality assurance of its
production process and to ensure that
its live operational reporting will integrate
seamlessly with the reporting capability of
the Microsoft Dynamics AX ERP platform
which is currently being installed for a “go
live” in the second quarter of 2013.
The wall slip in the main ore zone of
North Pit in July 2012 caused significant
scheduling issues in the third quarter. The
operations team responded quickly to the
problem and maintained ore supplies from
alternate lower grade locations. Larger
than anticipated volumes of higher grade
ore were also able to be extracted from
the North Pit during the second half of
2012 which increased production and
delivered stockpile attainment in excess
of the revised July 2012 mine plan. This
allowed Grange to produce its forecast
2.1 million tonnes of premium 65+% iron
ore concentrate in 2012 and ensured that
all contracted sales obligations were met
in full and on time.
The forward looking 2013 budget life of
mine plan sees a smooth line balance
from mine to metal with around 2.2 million
tonnes of pellet production as the North
Pit wall is redeveloped and open access
is re-established into the main ore zone in
North Pit.
In the second half of 2012 the operations
team focused on minimising delays
from the July wall slip. As a result capital
projects and maintenance opportunities
were re-scheduled and brought forward in
order to re-balance and de-risk the revised
mine plan into the first quarter of 2013.
This saw major preparatory works being
completed for an AG-Mill change-out, and
the relocation of 900 metres of the slurry
pipeline beyond the operational footprint
of the life of mine pit shell. While this
required a four day shut down across the
process plants, it provided an opportunity
to undertake planned maintenance in
advance of the common equipment
shutdown scheduled for the first quarter
of 2013.
A $2 million exploration drilling program
continued at Long Plains, a magnetite
deposit located approximately
10 kilometres south of Savage River.
The results of this drilling program allowed
the Company to announce a Mineral
Resource for Long Plains in August 2012.
The Federal Department of Sustainability,
Environment, Water Population and
Communities’ approval of the upstream
tailings dam wall raise provides Grange
with the necessary storage capacity
required in 2013 and 2014. An application
has been submitted for the construction
of additional tailings capacity at South
Deposit which will provide sufficient
storage for the remainder of the current
mine life. The approval process is currently
underway and Grange is targeting to
obtain all approvals by the fourth quarter
of 2013.
The operations team continues to use
its management reporting systems,
communications and review disciplines to
ensure that it focuses strongly on reducing
C1 operating costs and to ensure that
all capital expenditure projects pass rigid
approval criteria and execution controls to
assure they deliver the best value.