Doray Minerals is targeting the middle of next year for first output from its Andy Well gold project near Meekatharra, after giving the development the final investment go-ahead today.
Doray, which holds an 80 per cent stake in the project, said the decision to proceed at Andy Well confirmed the board’s long-held belief that the project would be the state’s next high-grade gold mine.
The remaining 20 per cent interest is held by Murchison Resources, a privately-owned company based in Kalgoorlie-Boulder.
A maiden high-grade reserve was unveiled at Andy Well last month, with the combined open pit and underground mining reserve standing at 570,000 tonnes of ore containing 12.8 grams of gold per tonne, for 235,000 contained ounces.
Managing director Allan Kelly said the company planned to kick off open pit mining and construction of a processing facility in the second half of this year, with a target of first gold production in mid-2013.
“We believe this is just the beginning of the story for our company, which also has near-term upside as indicated by recent results from the Judy Zone and our numerous other projects in both the Murchison and South Australia,” Mr Kelly said.
Doray said it was currently working with Commonwealth Bank of Australia on terms and conditions for a project financing arrangement.
The miner has appointed MACA Civil to undertake open pit mining and civil earthworks, while GBF Underground Mining Contractors will take on underground mining services for the project.
GR Engineering was selected as the company’s preferred contractor to design and construct the Andy Well processing plant.
The contract has an approximate worth of $31 million, with formal award being subject to final board approval and completion of project financing by Doray.
GR Engineering managing director Joe Ricciard said the potential deal was another endorsement of the company's capabilities.
Work on a 126-room construction village has commenced, with Nordic North providing the works, Doray said.
At 9:50AM, WST, Doray stocks had slipped 0.6 per cent, trading at 75 cents.