Dominion Mining says it is likely to face logistical challenges next year with the extension of its Challenger gold mine in South Australia and as a result expects lower gold grades.
The company is expanding the Challenger processing unit to raise throughput capacity to 530,000t per annum, which will enable an increase in annual gold production from 98,755oz 2008-09 to 120,000oz.
Dominion chairman Peter Joseph said while the plant upgrade will increase production at Challenger from early 2010 it is expected to impact the company’s production for six months to December 2009.
“This is due to the need to focus on developing sufficient new underground accesses to enable more areas to be mined to facilitate the plant expansion,” Joseph told the Sydney Morning Herald.
“This upgrade is expected to be completed by the end of December this year.”
Lower gold endowment in the mine’s MI shoot, which has been a major source of higher grade ore, is expected by Dominion.
Joseph said the mine’s average feed grade would be less compared to previous years following the increased ore proportion from the lower grade M2 shoot.
“In addition … the increased depth of the mine will result in increased stress conditions requiring a greater level of rock bolting and meshing which in turn will result in higher operating costs,” Joseph said.