fortnum goldmine north of meekatharra

Green lights wink on for gold
www.theage.com.au

By Michael Weir, Perth
December 22, 2005
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A FLURRY of new gold mines, including the long-awaited $1 billion redevelopment of the giant West Australian Boddington project, are poised to get the green light as higher gold prices help offset rising costs.

Boddington project manager Tom McCulley said the feasibility study for the 11 million-ounce project — Australia's biggest undeveloped gold deposit — would be delivered to owners Newmont Mining, AngloGold Ashanti and Newcrest Mining on Friday.

Boddington is expected to produce 800,000 ounces of gold and 30,000 tonnes of copper a year for 17 years.

Junior Gleneagle Gold on Tuesday gave the go-ahead to re-opening its Fortnum goldmine north of Meekatharra, nine months after the redevelopment was deferred because of soaring costs.

Also, in recent weeks Reed Resources has started underground operations at Comet Vale north of Kalgoorlie and should be producing gold by the middle of next year, and Crescent Gold and A1 Minerals have announced big resource upgrades at their respective Laverton projects in the lead-up to beginning mining next year.

Denis Waddell's Tanami Gold, which, like Gleneagle, had to defer development of its Coyote gold mine in the Tanami Desert because of rising costs, is also about to push the button after reconfiguring the design and mine plan.

And, in a further positive sign for the gold sector, Gleneagle has announced it has raised $1.5 million from Swiss gold funds, confirming a long-awaited return by European investors to the Australian sector.

Association of Mining and Exploration Companies chief executive Justin Walawski said gold's surge past $US500 an ounce for the first time in 22 years had given the gold industry a much-needed boost.

Gleneagle managing director Ian Prentice said the cost increases had begun to tail off and had been offset by the 20 per cent surge in the gold price in the past six months.

"There are still cost pressures in the system but they are far less aggressive than the 30-40 per cent increase we saw between September (2004) and March (2005)," he said.

Mr Prentice said Westpac Institutional Bank had been mandated to organise financing for the $3.2 million recommissioning of the mothballed Fortnum treatment plant. The feasibility study is due for completion by early February and first production is slated for the June quarter.

Gleneagle has forecast production of 60,000 ounces a year for a two-three year mine life based on the open-pittable deposits at the site.

WEST AUSTRALIAN