CRATER Gold Mining restarted operations at its high grade zone (HGZ) project at Crater Mountain, after being ordered to cease operations following a fatal motor vehicle accident at the site on 23 November 2014.
Mining at the project, which has a production target of 10,000 ounces of gold this year, started on 18 December, only for work to be stopped by 23 December on the instruction of the Mines Safety Inspectorate.
Crater Gold was given permission to restart operations by 12 March, under conditions that included a provision its ATR Argo vehicle not be used for any purpose.
“All work shall be carried out by fit for purpose equipment only which shall be properly maintained,” the condition said.
The company has now started drive development on three gold bearing veins within the HGZ, it said.
Crater Gold Mining chief executive Greg Starr said he expected to reach the production target at an all-cash cost of below $400 per ounce average over the mining lease term, positioning the mine within the lowest quartile in terms of operating costs.
The mining lease ML510 enables the company to continue mining for five years from 5 November 2014, with the option to extend.
“As a high margin operation, the HGZ project will generate strong cashflows, which will fund further development at the HGZ mine and exploration activities at the company’s other assets,” Mr Starr said.
“This is an exciting milestone for the company as we have successfully transitioned from explorer to now become PNG’s newest gold producer,” he said.
Crater Mountain is located 50 kilometres southwest of Goroka in the Eastern Highlands Province of PNG.
Formerly a tier-1 BHP asset, there has been in excess of 14,500 metres of diamond drilling to date, the majority focussed on the Nevera prospect, which hosts the HGZ mine.