Increase to resources at Challenger

Dominion Mining Ltd has significantly extended the life of its flagship Challenger....

  Dominion Mining Ltd has significantly extended the life of its flagship Challenger Gold Mine in South Australia after announcing a 74% increase in gold reserves to 512,000 ounces and lifting its resource base for the first time to in excess of 1 million ounces.The Perth-based company said that gold reserves had increased substantially to 2.2 million tonnes at 7.2g/t Au for 512,000 ounces (31 December 2006: 293,500oz) after taking into account gold production for the 6 months to 30 June 2007 of 57,885 ounces.This represents an excellent result, particularly considering that none of the increase is related to depth extensions of the main M1 Shoot, the primary ore source at Challenger. Dominion has confirmed the continuity of this shoot at depth, today announcing a series of outstanding high-grade drilling results.The resource inventory for the Challenger Project has also been increased by 312,000 ounces over the 31 December 2006 published figure to 3.7 million tonnes at 9.2g/t Au for 1.09 million contained ounces. This is the first time the resource inventory has exceeded 1 million ounces in the history of the Challenger Project.“This is an exceptional result,” commented Dominion’s Managing Director, Peter Alexander. “Importantly, none of the increase in resources and reserves related to the recently confirmed depth extensions of the M1 Shoot, which remains our primary exploration target moving forward.”“Also, 280,000 ounces of our increased reserve inventory are located above and adjacent to the existing decline and can therefore be accessed and developed with minimal additional requirement for capital development expenditure,” he continued. “The combined M1 Shoot, M1 Shadow Zone and M2 Shoot reserves now average between 1,400 and 1,500 ounces per vertical metre – double the contained gold on which the initial underground development of the M1 Shoot was based. An initial scoping study including an upgrade to the mill is ongoing to determine the optimum production level.”Dominion also reported strong gold production for the June Quarter of 26,977 ounces at a cash operating cost of A$306/ounce, lifting production for the 2006/07 financial year to 108,191 ounces at a cash operating cost of A$309/ounce. The company posted revenue for the year of A$80.7 million from the sale of 108,482 ounces at an average received price of A$744/ounce. Cash and bullion at the end of June totalled $35.8 million. In addition, investments in other listed entities, relating primarily to the payment for 51% of the uranium rights in certain tenements owned by Dominion in the Gawler Craton region of South Australia, recorded a market value of $12.1 million.“Dominion is in a very strong position and we are delighted with the success of our ongoing exploration, which has confirmed the longevity of the Challenger operation.” Mr Alexander said.“Ongoing exploration within the M1 Shoot was expected to deliver further significant increases to the Company’s reserves during the September and December 2007 quarters,” he added.High grade intersections at the M1 shoot generated from exploration in the June 2007 Quarter included 2.5m at 257.29g/t gold, and 3.75m at 169.54g/t gold.