Challenger gold mine under new management from mid-March

JOHANNESBURG (miningweekly.com) – The management of the Challenger gold mine, in South Australia, would be handed over to its new owners, the 50:50 joint venture (JV) between Diversified Minerals (DMPL) and WPG Resources, in mid-March, the parties involved announced on Monday.

ASX-listed WPG Resources and DMPL, an associate entity of mining services provider PYBAR Group, bought the Challenger mine for A$1-million.

Kingsgate Consolidated, which sold Challenger to focus on its core assets in Thailand and Chile, would finalise mining and processing activities at the site in the next few weeks, with the mine entering temporary care and maintenance on handover on March 15.

WPG stated that the mine was expected to resume gold production before the end of June, subject to the approval of a new mine plan. The company reported that the mine plan, which would be formally announced once finalised, would focus on a combination of smaller scale mining equipment and reducing mining dilution for a more efficient mining operation.

The Challenger gold mine has operated for over ten years, producing more than one-million ounces of gold. WPG stated that Kingsgate had demonstrated over the past 18 months that the mine could be operated profitably and added that it anticipated further savings through minimising dilution and further reducing the mine’s operating costs.

The Challenger JV intended to reopen Challenger based on the extraction of known resources, with an initial focus on the Challenger West zone. PYBAR Mining Services, a wholly owned subsidiary of the PYBAR Group, is the underground mining contractor for the Challenger project.

Kingsgate would be paid a royalty of A$25/oz on gold recovered from the Challenger South South West (CSSW) envelope, which is about 300 m from the Challenger West orebody. The royalty would apply after the first 30 000 oz of gold were recovered from CSSW.

Kingsgate had also been granted an option to participate in a JV to develop and use underground workings for hazardous waste disposal. Tentative findings of the South Australian government’s Nuclear Fuel Cycle Royal Commission have identified the Gawler craton in the state as a potential location for a nuclear waste storage facility, which could generate about A$257-billion in revenue over its lifespan.