It has approved the construction of a new treatment plant and associated infrastructure. Importantly it has also begun a major mine development programme.
“This decision heralds a new era for the Co-O project,” managing director Geoff Davis said.
“[It] demonstrates the board’s confidence in the future of its Co-O operations. It also confirms a measured approach to our growth strategy."
The Co-O mine and current mill produced 89,679 ounces of gold in the year ended 30 June 2010.
The new plant will provide processing capacity to produce 200,000 ounces of gold per year, based on the current grade of the Co-O Mine’s reserves.
Preliminary cost estimates for the new plant (with an initial design capacity to treat 750,000 tonnes per annum) and expansion are expected to be approximately US$80 million and the company intends to fund the cash requirements of the new plant and expansion internally.
The construction time for the new plant after the necessary regulatory approvals are granted is estimated at between 18 to 24 months, and the full benefits of the expansion are expected to be realised shortly thereafter.
The company is currently in preliminary discussions with engineering groups and it expects to provide further information in due course.