The start of full production marks completion of a very successful construction and commissioning phase and establishes a solid foundation for the 2013 financial year.
The recently commissioned gold process plant has a capacity of 1.5 million tonnes per annum and at forecast head grade of 1.7 grams per tonne (g/t) will produce 73,000 ounces gold annually.
Brian Rear, chief executive officer, commented: "We are delighted to be in a position to put the operation on a full production footing six weeks after the start of mill commissioning, which reflects the excellent performance of the facility during the commissioning phase and the capabilities of our operations team and partners at the site.
"The performance of the plant in October and the resolution of any causes for delays beyond normal production experience underline the decision."
Operations during October indicated the plant operates to its design specification. The SAG mill ran at the design throughput rate of 189 tonnes per hour and appears capable of processing ore at a higher rate as net power draw is about 55% of design.
Gold losses to tailings remain at expected levels with indicated recoveries above 90%.
The production objectives for the two remaining months are based on the design criteria for the process plant and would see gold production of about 6,000 ounces monthly, depending on the head grade milled, at a design throughput of 125,000 tonnes per month.
Ore supply will be sourced entirely from the Golden Eagle pit during the period.
Reconciliation between the ore reserve block model and grade control drilling of ore blocks mined has validated both ore tonnage and grade expectations.
Between now and the end of December the true capabilities of the process plant will be tested to establish the base case for expansion studies.
Millennium is targeting a stage one expansion from design throughput of 1.5 million tonnes per annum to at least 1.7 million tonnes per annum treated for the 2013 financial year.
The studies will look at requirements to further expand production above that level.
Nullagine currently hosts a 1.33 million ounce gold resource contained within seven deposits on granted mining leases, with the largest deposit known as Golden Eagle located 10 kilometres south of the township of Nullagine. Golden Eagle contains 62% of the total resource.
Millennium is planning a significant investment in resource and reserve drilling during 2013 centred on Golden Eagle, the central pits such as Shearers, and the far eastern deposits such as Golden Gate.
Extensive mapping during 2012 in and around these locations has yielded numerous new gold exploration targets that will also be followed up to unlock the considerable geological potential of the Nullagine Goldfield.
The program for 2013 will also include the start of exploration on the Golden Eagle southwest corridor, which includes the joint venture with the Creasy Group where Millennium is earning a 70% interest in the gold rights.
The southwest corridor project shows anomalous gold values extending 2 kilometres from the Golden Eagle deposit to the company's western tenement boundary and a further 5 kilometres into tenements belonging to the Creasy Group.
Brian Rear has now successfully steered Millennium to full production of 6,000 ounces per month bringing in over $10 million in gross revenue based on the current gold price.
Millennium's C1 cash costs are between $760 and $800 per ounce, less than half of the US$1,680 ounce gold price.
With expansion studies already underway, if successful, Proactive Investors could see Millennium pushing towards 100,000 ounces in the medium term.
With a forecast EBITDA of $773 million and a project IRR of 40%, the projects economics still indicate that Millennium is undervalued relative to its peers.
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