Gindalbie Metals' Mid West magnetite project has struck yet another hurdle, with management now forced to address problems in the crushing circuit.
The latest ramp-up difficulties came to light as Gindalbie yesterday released the findings of a technical review aimed at getting the Karara project to sustainable production at its nameplate capacity of 8.8 million tonnes a year.
The review estimated that the cost of re-engineering the plant would be less than expected at $123.6 million, with the lion's share to be spent this year.
However, it also identified problems in the crushing circuit because of unexpectedly hard and abrasive material in parts of the Karara orebody.
This had resulted in higher wear rates on the crushing equipment and increased power usage, which had limited throughput to the concentrator in March.
Gindalbie said work "requiring minimal capital expenditure" was launched immediately to address the issue.
However, it left open the possibility further spending may be required by adding that it was undertaking further technical assessment of both the performance and capacity of the circuit.
Karara did achieve its target of reaching 75 per cent of capacity by the end of the March quarter - a nominal production rate of 6.6 million tonnes of concentrate - but only for seven days last month. Karara, 200km east of Geraldton and WA's first magnetite project, has struggled to come to grips with processing challenges.
Just two weeks ago, Gindalbie's Chinese partner in the project, Ansteel, took majority control of Karara under a debt for equity swap struck last year when the mine ran short of cash.
Gindalbie's battered shares, which are skirting with record lows, lost 0.1Â¢ to 5.8Â¢, capitalising the group at just $86.6 million.