20/02/2014 - 17:47

VIDEO: Regis mines hit by severe flooding

20/02/2014 - 17:47

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Regis Resources has been forced to suspend full operations at its Rosemont and Garden Well open pit gold mines in the Goldfields for at least three months after torrential rain caused extensive flooding.

Regis Resources has been forced to suspend full operations at its Rosemont and Garden Well open pit gold mines in the Goldfields for at least three months after torrential rain caused extensive flooding.

Regis said the Duketon project area received rainfall of about 165 millimetres over two days last week, with about 130mm falling within a 14-hour period.

The mines' flood diversion bunds were overcome by the flood waters, with an estimated 4.7 million cubic metres flowing into the Garden Well pit and 620,000 cubic metres into the Rosemont pit.

Regis said the rainfall had caused some damage to mine infrastructure but this could not be fully assessed until dewatering commences.

The flooding events are not insurable under the company's insurance policies.

Regis told the market it would suspend mining at the pits for four to six weeks, during which time processing plants will be fed from run of mine stockpiles, before commencing interim mining operations in available areas.

It does not expect to restart full mining operations at Rosemont until May and at Garden Well until July.

However the rainfall had no significant impact at the company's nearby Moolart Well operation, which is continuing at full production.

"Obviously this is a tough time for Regis and its people and a set-back for the company in the short term," Regis managing director Mark Clark said.

"Hower Regis is well placed both financially and operationally to manage its way through the interim operations period and get the entire Duketon gold project back to a strong, steady state in the second half of this calendar year."

Regis has issued a notice of force majeure to Welshpool-based contractor MACA, which holds earthmoving contracts at both mines.

MACA has stood down the majority of its workforce at both operations and will retain only the crews required to undertake remedial works.

Under the terms of an agreement between the two companies for the force majeure period, MACA will bear its own costs and charge normal contracted rates for remedial works.

Regis has also agreed to award MACA the right to provide mining cost estimates for earthmoving at the gold miner's McPhillamy's prospect in New South Wales, on the understanding that MACA would be appointed preferred mining contractor at the project if it proceeds to development.

Regis has estimated the cost of remediation works and dewatering at the two mines to be at least $5 million.

It has arranged an extension on the limit of its corporate loan facility with Macquarie Bank from $20 million to $70 million.

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