Australia's Newest Gold Mine Commences Production at Nullagine

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Researched by Industrial Info Resources Australia (Perth, Australia)--Millennium Minerals Limited (ASX:MOY) became Australia's newest gold producer, with its first gold pour at its Nullagine gold mine in Western Australia in October 2012. The remote mine site is seven kilometres south of the town of Nullagine in East Pilbara. Total capital expenditures are reported to be $88 million. The development took an estimated 11 months of construction and involved engineering consulting and project management firm Mintrex Limited (Perth, Australia).

Nullagine has estimated resources of 1.33 million ounces of gold that is spread across seven deposits on the granted mining lease. The largest deposit is named Golden Eagle and contains about two-thirds of the total current resources. Millennium is targeting an annual production of 72,000 ounces of gold with its carbon-in-leach processing plant, with a current design capacity of 1.5 million tonnes a year.

Operations totalled 7,200 ounces of gold production in January with a 189-tonne-per-hour processing capacity. The company recorded its first gold sales of 6,726 ounces at an average spot price of $1,592 per ounce. With the cash flow generated through the recent commercial production, Millennium is gearing up for its planned expansion of the processing facility from the 1.5 million tonnes to a total 2 million tonnes per year. The current design of the plant can accommodate the expansion, and it will be achieved through the addition of another SAG mill and carbon-in-leach tanks. Expansion work is currently scheduled to kick off mid-2014 and is expected to cost an additional $7 million. The expansion will see the production increase to a total 100,000 ounces of gold production per year.

The Western Australian gold-producing industry recently has been affected by increasing production costs, a lack of new resources, and declining grades of ore. The average operating costs are between $700 and $900 per tonne, and the recent fall in global gold prices is adding to the problems. Amid tough times, the commencement of production at the Nullagine mine, with a claimed operating cost of $828 per ounce, is definitely seen as a new hope.

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