The owners of Dugald River zinc mine reported a net loss after tax of US$182.7 million during the first six months of 2020 and said the result primarily reflected the impact of COVID-19, with lower commodity prices and sales volumes.

"A strong rebound in key commodity prices over recent months gives cause for some optimism regarding the second half of the year," the company said in a statement.

Dugald River mine has increased its mining volume and recovery rate, and its zinc output has increased by 6% compared to the same period in 2019 but the increase in volume of sales in zinc (19%) was offset by lower commodity prices.

The mine produced 79,177 tonnes of zinc during the period however revenue reduced by 26% to US$120.9 million, largely due to the impact of lower metal prices.

Despite challenges associated with the COVID-19 pandemic, MMG maintains is original guidance for zinc production at Dugald River of between 225,000 and 245,000 tonnes.

MMG said higher production and drawdown of existing stockpiles at Dugald River also resulted in higher zinc, lead and by-product sales revenue (US$34.9 million).

MMG also made new and revised agreements to Dugald River operations including revised concentrate logistics and drilling services, multiple contracts for the supply of reagents and grinding media, goods and service requirements for site infrastructure projects, and other site support services.

They also brought in new agreements due to the COVID-19 pandemic, such as arrangements for additional fly in fly out and bus services, and critical hygiene and safety products to support operations.

MMG said its focus would be on de-bottlenecking and optimisation works anticipated to increase mine capacity from 1.75 million to over 2 million tonnes a year by 2022.

This will pave the way for targeted zinc equivalent production of at least 200,000 tonnes annually from 2022.

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