Australia-based Sirius Resources has commenced work on its Nova nickel-copper project near Balladonia.
The company started construction after receiving the final statutory approvals for the project, two years after announcing the discovery of the deposit.
Sirius Resources claimed that it has managed to achieve a cost saving of A$30m ($23.7m) compared with the A$473m ($373.8m) estimation in the original definitive feasibility study (DFS).
The project is expected to cost A$443m ($350m) including a contingency of A$22m ($17m); however, the figure does not account for any operation-related costs cited in the DFS estimates.
Sirius managing director Mark Bennett said: "It is very satisfying to have started mining of Nova exactly two and a half years since the announcement of its discovery and even more fitting that such a significant milestone should fall on Australia Day for this world-class project.
"We have started the project on time, on plan and significantly within original capex budget estimates."
Sirius expects to take three months to mine the boxcut, which is a small, open pit dug to provide access to fresh rock where the underground decline will start. Following this, the company will focus on the underground decline, developing a tunnel to expose the ore body.
Sirius Resources has awarded a A$129m ($102m) contract to Barminco to carry out the boxcut and portal excavation, and subsequent underground mining.
The contract has been awarded for three years with an option to extend it by one year.
Barminco has also won a A$5m contract to construct and supply the Nova mine batch plant, which will begin in February 2015 and take two months.
Image: Construction work begins at Nova mine boxcut site. Photo: courtesy of Sirius Resources.