Southern Gold has selected Metals X to provide all mining, haulage and processing services associated with the development of the Cannon mine located 30km east of Kalgoorlie, Western Australia.
According to Southern Gold, operations have commenced on the stage 1 open pit which will see about 152kt of ore mined.
Once the mining starts over the next four to five months, ore from Cannon would be processed through Metals X Jubilee mill facility about 35km to the southwest.
Rail crossing, pre-strip and site access have been completed and mining operations commenced at Cannon.
The company further updated that the preferred haul route along miscellaneous license L25/48 is progressing well and haul road construction is set to begin upon obtaining a native vegetation clearing permit.
The preferred route is established with alternative route L25/43 available in the interim.
Southern Gold said, the existing stage 1 open pit is expected to be superseded by a new larger pit development plan.
The company has also announced the start of an 800m reverse circulation drilling programme at Arsenal.
Southern Gold managing director Simon Mitchell said: "Southern Gold has hit a few key milestones this week, in what is the culmination of several years' work on the part of the Southern team.
"It is great to see 'big yellow' mining equipment deployed to site and the first unearthing of ore geology in the pit. In addition we have a huge opportunity when it comes to the possibility of a larger open pit operation as well as the longer term underground potential."