Gold miner, Bendigo, now on a firmer mining course in Victoria
The decision more than two years ago to abandon under-performing mining targets at the historic Bendigo Goldfield in the Australian State of Victoria is now paying dividends on the basis of a substantial lower mining target, created largely through exploration.
Posted: Monday , 17 Aug 2009
Bendigo Mining Ltd (ASX: BDG) told a mining conference in Melbourne Monday that its "reinvigorated" Kangaroo Flat mine at Bendigo in central Victoria was now tracking above expectations to achieve its full year target of between 30,000 - 40,000 ounces of gold in calendar 2009.
Bendigo Mining's managing director, Rod Hanson, told the opening day of the Paydirt 2009 Resources Victoria Conference that the production of 23,000 oz in the June half year illustrated that the operation was "tracking above plan".
"Significantly, we are now making cash on this production and good cash at that, with total costs of around A$640 an ounce (US$524/oz)," Hanson said.
"However, with some A$300 million (US$245.9 million) of capital investment sunk into the Kangaroo Flat site, we need to maintain this level of production as a minimum while we continue to explore and also seek to build throughput.
"The onsite mill is under-utilised and is operating at less than one third capacity so there is plenty of opportunity to boost production through optimising and expanding the mine as well as growing beyond Bendigo."
Production resumed last year and the operation moved away from the under-performing Sheepshead Reef, relatively close to the Swan decline and was now developing a series of new multiple reefs underneath the city of Bendigo, ranging from medium to high grade.
"This is a very large goldfield with numerous targets and we need to now really chase these prospective rocks right throughout this field. We are mainly operating in the southern end," Hanson said.
"We have two drill rigs assigned specifically for exploration work at Kangaroo Flat."
Meanwhile, the recently announced corporate growth move - the A$8 million (US$6.55 million) acquisition of the Henty gold mine on Tasmania's West Coast was a project with significant exploration upside.
He said the mining methods that had been applied at Henty were not dissimilar to those being applied at Kangaroo Flat.
"The (Henty) mine has traditionally been a small operation owned by large companies - and suffered from sporadic exploration and low key status. "Now it has come back to being owned by a small owner and that allows greater focus on its potential.
"We regard it as a core asset and are targeting an annual 2009 performance of 20,000 to 25,000 ounces by the end of December this year at cash costs of less than A$800/oz (US$655/oz)."
Bendigo Mining will spend about A$2 M (US$1.63 M) on exploration on the Henty project over the next 12 months, with a focus on drilling out the Tyndall ore body.