Noticeboard
Gill reef, Garden Gully line
19, June 2008
Picture and diagram of Gill reef, Garden Gully line.
June 2007 Quarterly Report Teleconference
30 July, 2007
Follow the link below to listen to a telephone conference with Rod Hanson (Managing Director & CEO) and Tim Churcher (CFO & Company Secretary) discussing the results from the June 2007 Quarterly Report
June 2007 Quarter Teleconference (3.07MB)
Rod Hanson's presentation to the Sydney Mining Club
05 July, 2007
Rod Hanson, Managing Director & CEO of Bendigo Mining Limited, presented at the Sydney Mining Club today, 5 July 2007. The presentation can be view here.
March 2007 Quarter Teleconference
26 April, 2007
Follow the link below to listen to a telephone conference with Rod Hanson (Managing Director & CEO) and Tim Churcher (CFO) discussing the results from the March 2007 quarter
March 2007 Quarter Teleconference (9.05MB)
Change in Strategy
8 January, 2007
On 8 January 2007 the Company released its quarterly report for the three months ending 31 December 2006.
Findings from a review undertaken at the end of this period by the Company and the outcome of the initial three months of production have resulted in the Board committing the Company to a major shift in strategy.
The revised strategy will involve a hiatus in production whilst exploration is undertaken from underground drill locations to test some of the most historically rich areas of the Bendigo Goldfield.
The Company is in a strong position to rebuild value over the next 18 months, with a process plant, mine equipment and underground mine access to explore, and then exploit successful future discoveries.
The programme will commence immediately, and in around six months drilling is planned to test regions beneath historic mines that produced 500,000 oz at a grade of 23 g/t gold.
Cash funds of $66 million will be utilised to fund the new strategy for the next 18 months.
The change will have a significant impact on the Company and will result in Bendigo Mining deferring production whilst it focuses on exploration activities to build reserves in more productive areas of the goldfield.
The Company remains confident of the rich endowment of the Bendigo system and its ability to support high rates of production. However, the initial strategy of relying on two historically less productive lines of mineralisation to support a growth strategy, in Sheepshead and Deborah, has proven to be high risk and unsustainable.
A number of interpretational errors were made which resulted in a local over-estimate of initial reserves on the Sheepshead and Deborah Lines. It was considered in October 2006 that once the low-grade fringe or stockwork mineralisation was removed from the reserve, the remainder would be a solid mining shape with economic grade. This has proven not to be the case.
The Company, in discussion with independent consultants, has identified several issues which affected resource calculation. One issue relates to an assumption that the relatively simple and laterally continuous geometry of the rocks within the Bendigo field would apply to the local scale of mineralised reefs. This is incorrect in the currently accessed reefs as mining has encountered higher complexity than expected. Secondly, whilst grade transformation is a valid approach in a nuggetty gold environment, the current factor used to estimate gold grades appears to be overestimating the grade of low grade material. When combined, these issues have led to poor geological control during mining and therefore caused excessive mining dilution (the processing of barren rock).
The interpretational errors in estimating resources have been compounded by the fact that mining was located within the historically less productive Sheepshead and Deborah Lines.
Whilst it was known that the Sheepshead and Deborah Lines had historically been below average producers, they were the shallowest reefs available for early modern-day exploitation and the quickest to dewater. Recent experience indicates that these lines cannot now be relied upon to underpin a production growth strategy.
The estimation error is particularly disappointing considering the extensive amount of diamond drilling and bulk-sample data collected in an attempt to reduce risk prior to committing to production. A review of data collected by the Company will be conducted; however it is currently considered that the key error was in the interpretation of the data, rather than the data itself.
Other significant changes going forward will include the resignation of the Managing Director & CEO Mr Doug Buerger, a major cost reduction initiative including ceasing all non-critical capital expenditure, and a review of the Inferred Resource estimate, which is already underway.
Mr Rod Hanson, Chief Operating Officer, has been appointed Managing Director and CEO.
As a result of the change in strategy, a major write down in the value of the Company's non current assets is required and is expected to generate a significant loss for the half year ending 31 December 2006.
