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Released July 08, 2013 | PERTH, AUSTRALIA
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Researched by Industrial Info Resources Australia (Perth, Australia)--Amid Australia's recent economic instability, many companies have been examining their budgets in detail. Among the items being considered are reviewing expenses, which can include the tendering for contractors and suppliers that can supply goods and services at a more competitive price for the company. One company in this stage of analysis is Kingsgate Consolidated Limited (ASX:KCN), a successful gold production company that owns the Challenger underground gold mine in South Australia, located 740 kilometres northwest of Adelaide. The company is now incurring a $271.78 million impairment charge against the Challenger operation.
A brief history of the Challenger gold mine is based on the original estimation of a two year life-of-mine open pit mine. Despite this early estimation, Challenger, with further development, has proven itself to be one of the most productive underground mines in Australia.
With the current flailing gold price, which has fallen to a three-year low from approximately $1,600 an ounce to just more than $1,200 before the end of the Australian fiscal year, Kingsgate has proceeded with a strategic review that includes the long-established contract coming to its' natural maturation by Leighton Holdings Limited (ASX:LEI).
Kingsgate Consolidated, as it begins to focus on the implemented "lean" program, is planning to reduce mine development costs and concentrate its efforts toward higher-grade resources. In a bid to further reduce costs, Kingsgate will be reviewing the contract with Leighton that is due for maturation at the end of July 2013.
The contract that Leighton currently has with Kingsgate has been supporting the underground operation at the Challenger gold mine. The contract provides for underground mining techniques such as mechanized underground development stoping, using long-hole drilling and blast techniques and associated ore haulage.
Upon the maturation of this contract, Kingsgate Consolidated will be looking for a further reduction in costs. It is considering discontinuing its contract with Leighton and outsourcing to another company, based on a more competitive price.
Leighton Contractors has a very familiar name that is synonymous with providing quality services to industries such as mining, civil, telecommunication, infrastructure and energy. Leighton recently announced winning one of the biggest single contracts for iron ore giant Fortescue Metals on the Solomon Hub project. The contract is reported to be valued at $2.54 billion.
Kingsgate will be assessing many aspects over the next two to three months in an overall review of the Challenger operation. "The new strategic plan highlights the operational flexibility in the Challenger mine and the opportunity available to adapt to changing market conditions," said Gavin Thomas, the managing director and CEO.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
A brief history of the Challenger gold mine is based on the original estimation of a two year life-of-mine open pit mine. Despite this early estimation, Challenger, with further development, has proven itself to be one of the most productive underground mines in Australia.
With the current flailing gold price, which has fallen to a three-year low from approximately $1,600 an ounce to just more than $1,200 before the end of the Australian fiscal year, Kingsgate has proceeded with a strategic review that includes the long-established contract coming to its' natural maturation by Leighton Holdings Limited (ASX:LEI).
Kingsgate Consolidated, as it begins to focus on the implemented "lean" program, is planning to reduce mine development costs and concentrate its efforts toward higher-grade resources. In a bid to further reduce costs, Kingsgate will be reviewing the contract with Leighton that is due for maturation at the end of July 2013.
The contract that Leighton currently has with Kingsgate has been supporting the underground operation at the Challenger gold mine. The contract provides for underground mining techniques such as mechanized underground development stoping, using long-hole drilling and blast techniques and associated ore haulage.
Upon the maturation of this contract, Kingsgate Consolidated will be looking for a further reduction in costs. It is considering discontinuing its contract with Leighton and outsourcing to another company, based on a more competitive price.
Leighton Contractors has a very familiar name that is synonymous with providing quality services to industries such as mining, civil, telecommunication, infrastructure and energy. Leighton recently announced winning one of the biggest single contracts for iron ore giant Fortescue Metals on the Solomon Hub project. The contract is reported to be valued at $2.54 billion.
Kingsgate will be assessing many aspects over the next two to three months in an overall review of the Challenger operation. "The new strategic plan highlights the operational flexibility in the Challenger mine and the opportunity available to adapt to changing market conditions," said Gavin Thomas, the managing director and CEO.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
