Reed Resources expects to re-start mining at the mothballed Meekatharra gold project in Western Australia by late next year.
Last month the company raised $40 million for the purpose and feasibility study, to determine the commitments on the project.
Reed expects to be able to produce 120 000 to 150 000 ounces of precious metals per year, which it bought back for $28.4 million from the administrators of the former owner Mercator Gold Pty Ltd.
The mine went into receivership during the global financial crisis, when it failed to have a viable mine plan to raise capital.
Reed’s managing director, Chris Reed said a bankable feasibility study for the mine was underway and is due to be completed by February.
The project will include both open cut and underground mining operations, if approved.
"We now have Meekatharra at a near ready production status, but have to rebuild the integrity and market recognition through a successful start-up and subsequent sustainable operations," Mr Reed told Paydirt’s Gold Conference in Perth on Thursday.
"We have essentially inherited a three million tonne per annum mill currently on care and maintenance, a 184-person camp and offices worth $100 million in replacement costs – so we are confident of first mining and processing by late 2012.
"We are convinced that Meekatharra represents a world-class deposit than can develop into a strong, long-term producer."
Image: Reed Resources