GENERAL39208

• Permit No: M1982090
• IBM Index Class Name: General Documents
• Doc Name: ROYAL RESOURCES CORP ANNUAL REPORT 1986
• Annual Report Year: 1986
• Media Type: D
• Archive: No

Financial
NICKEL Revenue from the sale of nickel and
associated products decreased by 16.0%
to $285.2 million ($339.7 million). The
operating surplus from nickel operations
before financing costs and allocation of
corporate expenses was 818.3 million

Nickel production and sales compared with $66.2 million in 1984/85.
The price realised on nickel sales in all forms
ooo tonnes or comained nickel during the year decreased by 14.64'o in US$
60 Sales and 5.7°lo in A$ terms. The average US$/AS
~ Froduuion exchange rate fell by 9.44'o during the year
from A$I.OOIUS$0.7750 in 1984/85 to
so ~~~ A81.00/US80.7022 in 1985/86.
ao Production
Production o(nickel In concentrate declined
3o by 12.2% to 40,440 tonnes (46,070 tonnes).
The reduced production was due almost
entirely to a number of industrial stoppages
20 at Kambalda, the longest lasting over six
weeks. An Increase in production from
to Windarra partially offset the shortfall
from Kambalda.
81/82 82/83 83/84 84/85 85186
London Metal Exchange nickel price
S per pound annual average
- AS Equrvalem
- USi
BII82 82/83 83/84 89/85 85/86
Maintenance Fitter, Gary Folvig,
(leh) and Apprentice, Luke
Purvis. preparing to replace
the steel liners of a 3.3 metre
diameter by 4.9 metre long
rod mill at Itambalda Nickel
Operations, WA.
Sales
From production and purchases, sales of
nickel in all forms declined by 9.94'o to 43,910
tonnes in 1985186 compared to 48,740
tonnes in the previous year. The book value
of stocks at the end of 1985186 was $22.7
million ($27.1 million) and their market
value was estimated to be $24.2 million
($40.2 million).
Kambalda Nickel Operations
1;100% owned)
ryer
Manager
f'roduttion
1985/86 1984/85
Ore treated (tonnes) 1,196,5001.381,000
Head grade (% nickel) 3.16 3.21
(% copper) 0.23 0.25
Concentrate
produced (tonnes) 309.300 361,300
Concentrate grade (% nickel) 11.2 11.3
(% copper) 0.85 0.86
Nickel recovery (%) 91.9 41.7
Nickel in concentrate (tonnes)
from Kambalda ore 33.450 40,710
fromourchasedore 1,100 Nil
The above figures exclude toll treated ore
In view of the continuing unfavourable
economics of nickel production due to
lower prices and rising costs, including the
expected future impact of Fringe Benefits
T,uc, five high cost nlckel mining operations at
Kambalda (McMahon, Hunt, Jan, Mt Edwards
and Wannaway mines) were suspended in
April 1986.
Mine Development
Total development at Kambalda and Carnilya
Hill, including shaft sinking and raise drilling,
was 16,770 metres (18,050 metres).
During the year the Foster Shah reached its
final depth of 731 metres. This project claims
an Australian shah sinking record of 38
metres sink and line in 14 days. The shah was
sunk in 21 months during which only three
lost-time accidents were reported.
Mechanised sloping in Oat back cut and fill
slopes has been successfully introduced at
Long Shaft and accounts for over 50% o(the
mine production. Five sloping jumbos are
utilised at the mine.
In theTramways/St Ives area south of
Kambalda development of the Lanfranchi
orebody by means of a decline began during
the year. Following completion of the portal
in August 1985, development o(the decline
proceeded rapidly to establish a record rate
of advance for Kambalda for a single heading
decline development of 170 metres In two
weeks.
Access declines continued to be advanced at
the Otter-Juan, Foster, Fisher, Wannaway, and
Carnilya Hill mines.
Sufficient development was completed
during the year to maintain are reserves at
the 1985 level.
Concentrator
The concentrator operated satisfactorily with
efforts being maintained to improve Ootation
circuit design to accommodate the more
difficult metallurgy associated with ore from
the Widgiemooltha area.
Research is being earned out in assoaation
with the CSIRO to determine the
practicability of using coal as an alternative
to fuel oil for drying nickel concentrates.
Exploration and Ore Reserves
Proved and probable in situ ore reserves
were estimated as follows:
)tine 1986 June 1985
Tonnes (million) 26 26
Grade (% nickel) 3.3 3.3
The major exploration activity was in the
Tramways area south of Lake Leroy and
resulted in discoveries of ore shoots near
the Lanfranchi mine
In addition proved and probable in situ ore
reserves in the Carnilya WII mine, which is
56% owned by WMC, were as follows:
June 1986 tune 1985
Tonnes (million) 0.5 0.5
Grade (%nlckel) 40 4.0