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Legend bid to extend Gidgee mine life

PETA RULE



Legend Mining has started work on a new open-pit mine at the company's flagship Gidgee project.

Final resource drilling is underway at the Specimen Well site with the company hopeful of starting mining before the end of next month.

The move is part of a crucial campaign to extend the mine life of Gidgee, taken over by Legend six months ago.

Legend executive director Ian Cowden said market forecasts of a mine life of less than three years did not take into account what the company might hit during the roll-out of their exploration program.

"We have some pretty significant areas which are dramatically under-explored," he said.

Legend bought Gidgee, between Meekatharra and Leinster, from South African-controlled Abelle last December in a cash and scrip deal worth $6.5 million.

The company hit paydirt earlier this year with the discovery of two gold veins in the project's underground Swan Bitter mine. The share price responded encouragingly, spiking to 24¢. It was steady at 13¢ yesterday.

Chairman Michael Atkins said the company could come into its own this year.

"We could continue mining like this indefinitely, but that's not what we are here for," Mr Atkins said.

"We are getting our 15,000oz per quarter but we need to get a longer reserve position. Ideally we would like to start producing more than 100,000oz per annum so we always have a mine life of at least two or three years."

Deep exploration on the untapped stretch of land between Swan Bitter and the defunct Kingfisher open-cut mine is also on the schedule.

The two mine sites are about 3km apart. Kingfisher is also set to become the base for another underground site.

Mr Atkins flagged the possibility of a dividend for shareholders, given the cash flow from the project.

But the company was also on the lookout for opportunities.

"If the right acquisition comes along at the right time, we will seriously consider it," Mr Atkins said.