Bendigo's road back to golden revival gains traction

The gold story that went sour in 2007 – the great mining revival at the historic Bendigo field in Victoria – is showing positive signs from trial mining at the Kangaroo Flat mine.

PERTH  - 

The original mining on the previously lightly-mined Sheepshead Reef near where Bendigo Mining Ltd (ASX: BDG) had proved to be an under-performer and the company halted mining in favour of exploration, which resulted in discovery of the virginal Gill Reef.

Today the company announced results of trial mining from the first four mining blocks developed which saw the production of 2,521 ounces at an average grade of 6.2 grams/tonne and a metallurgical recovery of 84.1%.

Bendigo Mining's managing director, Rod Hanson, told Mineweb that the achieved grade from testing to date was below the target of 8-12 g/t but this ore had come from the centre of the Gill Reef and drilling had indicated higher grades in the deeper portions of the saddle reef, known as "legs."

"During the current phase of trial mining we are recovering the direct mining and processing costs. As we have significant cash reserves -- $A48 million ($US38.6 M) at the end of June 2008 - we have the financial strength to carefully continue with the trial programme," he added.

He said the trial mining has confirmed that the geology has been accurately interpreted for the small part of the reef extracted.

He said that as there is insufficient information at this stage, it was too early to vary the visual grade method that had been applied during the exploration campaign.

Hanson said trial mining will continue for some months and he does not think there would be adequate information for the board to consider a full scale return to mining until at least early 2009.

He told Mineweb it was important to continue the quest over the Bendigo field, much of which is now under the city, to find more virginal reef systems as this was the better option than considering remnant mining of some of the well worked reefs.

The timing of today's announcement could not have been better, for the banking and financial institution shocks that has laid bare some of America's finance leviathans resulted in the gold price rising $US85/oz to $US880/oz. With the slipping Australian dollar at slightly more than $US0.80, this represents a price of $A1,094/oz.

Bendigo's share price remained a static $A0.14 ($US0.1125).

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Related Links ARTILCES:  Greater Bendigo takes Inglewood’s gold revival off the bottom rung  Bendigo Mining shows more signs of recovery  Bonanza gold grades at Bendigo's Gill Reef  OTHER PAGES:  GOLD NEWS AUSTRALASIA

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