MMG said record production has Dugald River has helped them deliver a strong result for the fourth quarter of 2020.
MMG CEO Geoffrey Gao said they set new benchmarks at Dugald River for both metal production and recovery in zinc and lead.
"The Company has continued to successfully manage its response to the COVID-19 pandemic across all operations, with a focus on the risks of exposure to MMG people and contractors, in often challenging circumstances," Mr Gao said.
"We expect continued strength in the performance of Dugald River."
Dugald River delivered record quarterly production, producing 52,446 tonnes of zinc in the quarter, up 14% on the third quarter. The result was supported by record recoveries, with work to optimise mining and milling performance throughout 2020 yielding a 4% increase on 2019 results and record full year production of 177,704 tonnes.
MMG said this was a result of work over the course of the year to open up new operating areas and improve stability of the underground environment, with improved mining and milling grades reflecting reduced dilution.
"An ongoing focus on mill performance and processing circuit optimisation resulted in new records also being set for recovery during the fourth quarter, which was also the year's strongest period for throughput volumes," MMG's fourth quarter report said.
"This continued and steady improvement in overall site performance over the year leaves Dugald River well positioned to maximise output over coming periods"
On the back of a successful 2020, Dugald River is expected to produce between 180,000 and 190,000 tonnes of zinc in zinc concentrate during 2021, an increase on prior year guidance.
"Higher production volumes, together with an expected fall in treatment charges and higher by-product credits will offset the impacts of any increases in cash production expenses including what is anticipated to be a less favourable exchange rate environment," MMG said.
"Dugald River continues to target sustained delivery of annual mine capacity of two million tonnes and by 2022, zinc production approaching 200kt per annum."
MMG said near mine drilling programs suggest a wider zinc ore body than originally expected, at relatively shallow depth underpinning a growing expectation that Dugald River's mine life can be extended or production volumes increased over future years.
This is the result of the discovery of thick, high grade zones within the main lens in the southern part of the Dugald River orebody with an increase in tonnage of the primary zinc resource by approximately 14%.
High grade lead and silver are also present in these areas of structural thickening.
MMG said further interpretation work indicated these thicknesses could be repeated within the current in-mine footprint requiring prioritised infill drilling.
While you are here, subscribe to our weekly email delivered to your inbox every Tuesday and Friday