Melbourne-based New Century Resources (ASX:NCZ) has declared commercial production at its Century mine in Queensland, Australia, re-establishing itself as a top 10 zinc producer.
Following the news released on Sunday (July 5), the company jumped over 18 percent to AU$0.20.
The announcement comes after a record quarter of output for New Century, with the June 2020 period delivering an approximate 22 percent increase in zinc metal production to about 34,500 tonnes.
“Despite the Covid-19 pandemic, operations at Century continue to ramp up and have again delivered record production in the June quarter,” Managing Director Patrick Walta said. “Century has now achieved seven consecutive quarters of increasing production and lowering costs, and the company remains focused on continuing this trend.”
New Century also reported an estimated 17 percent decrease in C1 costs to about US$0.79 per pound of payable metal on an unreconciled basis.
Zinc prices have taken a hit along with other commodities this year on the back of the impact of the coronavirus pandemic. Starting the year above US$2,200 per tonne, prices plummeted in March to a year-to-date low of US$1,773.50.
Since then, thanks to a slow recovery from China paired with economic stimulus announcements and supply constraints, prices have steadily increased to US$2,037.50.
“From a market perspective, despite the zinc price remaining near 4-year lows, a strong decline in spot treatment charges in the quarter has improved conditions for zinc miners,” Walta said.
The company also sees potential for a price rebound due to additional metal demand from increased global infrastructure development linked to COVID-19 government stimulus.
Prior to its closure in 2016, Century was one of the largest zinc mines in the world, producing and processing an average of 475,00 tonnes per year of zinc concentrate and 50,000 tonnes per year of lead concentrate in Australia’s Lawn Hill area.
On Tuesday (July 7), shares of New Century were trading at AU$0.18 in Sydney.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.