Alkane Resources is “incredibly optimistic” that it can transition from open cut to underground mining at Tomingley Gold Operations (TGO), about 50 kilometres south-west of Dubbo.
It has appointed a project manager to confirm the economic viability of going underground and prepare a detailed execution plan that would allow for an “investment decision” in December.
Managing director Nic Earner said the cost of going underground would be about $16 million.
“We’ve got work to do before we push the final button but we are spending money and employing one or two individuals in order for that to occur,” he said.
“In our view we are on track to go underground and we are simply confirming the assumptions that will enable us to do that.”
The company is winding down open cut mining at TGO with its workforce now reduced to a third of the about 170 people employed during peak production.
Open cut mining is scheduled to stop at the end of 2018 with processing of ore to continue into the first quarter of 2019.
In our view we are on track to to go underground and we are simply confirming the assumptions that will enable us to do that.Alkane Resources managing director Nic Earner
Perth-based Mr Earner reports that the skill sets of open cut and underground miners are different but some people currently working on the “surface” in areas such as safety and processing will be part of the transition.
“Then we will recruit new people with the underground skill set,” he said. The size of the new venture will require an underground crew of about 30 miners.
Mr Earner said the underground ore reserve at Tomingley would last for three years.
“We think there’s more ore underneath but we will determine that from underground,” he said.
The $120 million TGO was launched in January 2014 with an expected life of 4.5 years.
In 2018 it was named the Mining Operation of the Year at the NSW Minerals Council Suppliers Awards.
The TGO has funded the development pipeline of the yet-to-be-built $1.2 billion Dubbo Project at Toongi.