Conquest Mining (ASX: CQT) is on track to produce its forecast 70,000 ounces of gold at pre-royalty cash costs of $A800 per ounce from the Pajingo mine, despite production delays.
Production at Pajingo, near Charters Towers in north Queensland, was impacted late last week by mill shut downs due to mill gear box failure.
Replacement items were installed and the mill was restarted on the evening of Friday September 23, earlier than expected. The mill has run continuously since then.
The company said lost production would be made up over the coming weeks, with ore containing approximately 5,000 ounces already at surface and stockpiled for milling.
At current spot gold prices of $US1,600 an ounce and estimated operating costs of $800 an ounce, the restart of Pajingo Mill will accrue strong cash flows to Conquest in the order of $56 million per annum.
Conquest acquired a 100% interest in Pajingo in November 2010 and has since focussed on expanding and improving the project.
It also holds a 100% interest in the Mt Carlton gold-silver-copper development project near Townsville.
Earlier this year Conquest entered into agreements covering a merger with Catalpa Resources and the inter-conditional acquisition of interests in two mines from Newcrest Mining, to create a leading Australian gold company.