Mining is set to begin immediately at Kidman Resources' Burbanks gold mine after the project received planning approval.
The mine, located near Coolgardie in WA, is expected to produce 4552oz at 4.32 gpt from the starter open pit during the December quarter, with all-in sustaining costs to be $875/oz.
Cashflow generated from the open pit will be used by Kidman to underpin the further development of its underground mine.
Kidman has started milling the ore from its underground operation, with the company’s maiden gold pour “imminent”.
Kidman managing director Martin Donohue said the start of production at the open pit marked a key milestone in the company’s strategy.
“This is an important event both because it means Kidman is generating cashflow and it shows that we are delivering on the undertakings we have given to the market since acquiring the project in April this year,” Donohue said.
“While the open pit program is relatively small at 4552oz, it supplements the current underground production and the additional cashflow it will generate next quarter is substantial for Kidman as it transitions into full production.”
Kidman acquired an 80 per cent stake in both the Burbanks and Coolgardie North gold project in April for $3m plus $2.4m in working capital.