Exco Resources (ASX: EXS) told Mineweb Monday it hopes to be producing gold from the White Dam project at the rate of 50,000 ounces per annum from early next year.
Managing director, Michael Anderson, said the company was now setting up an operations base at Broken Hill, 80 kilometres to the east, across the border in New South Wales.
This will be a boost for Broken Hill, known as the Silver City, for its world class zinc-lead-silver operations - an inland city whose fortunes have had a roller coaster ride on the back of wild variations in commodity prices and related corporate fortunes.
On known reserves, White Dam has an operating life as an heap leach, open cut operation of 30 months, however, Anderson said that may be lengthened substantially as drilling proceeds to convert resources to reserves and through regional exploration.
White Dam has been in Exco's portfolio for about seven years and it bought out then-partner Polymetals only to invite the specialist metallurgical and mine project operator back in as a 25% partner.
Last week Exco announced it had reached an agreement with Barclays Capital to provide up to $A16 million ($US12.96million) finance for White Dam by way of a gold-linked prepayment facility.
In mid 2008 Exco was not on White Dam investors' radar, but for its substantial copper and copper-gold projects in the Cloncurry-Mt Isa belt of north west Queensland. The Intierra data base showed that by late last year the E1 group of licenses had indicated-inferred resources of 44.9 million tonnes grading 0.76% copper and 0.22 grams/tonne gold - at an 0.3% Cu cut-off -- while the higher grade Monakoff deposit in the same region had a resource of 4 Mt @ 1.325% Cu and 0.42 g/t Au.
The exploration growth achieved by Exco in north west Queensland last year attracted the eye of high profile entrepreneur Robert Friedland; so much so that his Ivanhoe Australia Ltd (ASX: IVA) now holds a 19.5% stake in Exco.
Anderson told Mineweb that an environmental impact study was underway on some of the Queensland properties and on whether a stand-alone mill was viable or whether the ore could sold.
In the past year there have been discussions between Exco on the E1 licences with Xstrata which operates the nearby Ernest Henry copper mine, where the open cut has matured and underground mining is now considered.
Anderson said there have been no advances on discussions with Xstrata on what options were possible for ore sales or joint venturing on the E1 licences.
Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment.
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