The new owner of a remote gold mine in South Australia’s far west expects first production by late June. WPG Resources Ltd. acquired the underground Challenger mine, about 750 km northwest of Adelaide, and other exploration assets last month. Addressing the Paydirt 2016 South Australian Resources and Energy Investment Conference in Adelaide, WPG Managing Director Martin Jacobsen said the company predicted a mine output of about 50,000 ounces (oz) of gold over the following 12 months.

WPG’s longer-term aspirations are to maintain annual output from Challenger in the 2018 financial year and beyond at about the same level as a minimum. “The Tunkillia development offers significant production upside so we would be hopeful of being rerated as we move in a few short months from development to gold production,” Jacobsen said. “There is more than 500,000 oz of gold in the ground there and it is our intention to grow production.”

“Our best case scenario is for WPG to produce in excess of 45,000 attributable ounces of gold in the next financial year and this assumes no additions to the gold resource at Challenger.”

Challenger has a production history of 1 million oz of gold, but output was suspended pending completion of the sale to WPG. The company is currently undertaking essential maintenance works on the mine infrastructure prior to recommencing milling operations. The restart will be fueled by stockpiled ore and fully developed underground mining stocks.

Challenger’s carbon-in-pulp processing plant has a capacity of 650,000 metric tons per year (mt/y) and will eventually also take ore from WPG’s nearby Tarcoola gold mine. Jacobsen said WPG would continue with its exploration work and he was confident of increasing operation at Tarcoola.

“There are nearly a million tons of resource at Tarcoola and there is also potential for finding other deposits where we will be doing further exploration work,” he said.

The Challenger deposit was discovered in 1995 by Dominion Mining. The first shipment of gold bullion from the mine was made in 2002.