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WPG Resources Ltd Pours First Gold For Joint Venture At Challenger Mine

WPG Resources Ltd (ASX:WPG) has resumed production at the Challenger gold mine in South Australia by producing the first gold bar under the mine's new ownership.

Underground mining activities and site operations at Challenger recommenced last week with crushing and milling of low grade stockpiled ore.

Activities at Challenger, which opened in 2002 and produced over one million gold ounces, were temporarily suspended by the mine's former owner in March 2016.

Since then a new management and ownership team with WPG as manager has taken over the project and the new mining contractor, Pybar Mining, has mobilised its personnel, plant and equipment to site.

WPG's executive chairman, Bob Duffin, said "The transition from the old regime to the new has been effected in a smooth and seamless manner."

He said, "the mine is back in production on schedule and under budget. "With a strong management team in place, a highly competent mining contractor, and the increase in the mineral resource estimate we announced on 19 May 2016, I am confident that the project has a good future ahead of it."

The mining at Challenger is carried out by the Challenger Joint Venture, a 50/50 joint venture between WPG and Diversified Minerals Pty Ltd, an entity within the PYBAR Group.

WPG had acquired the Challenger gold mine for $1 million in March 2016 from Kingsgate Consolidated Ltd (ASX:KCN).

Updated Resource

The Challenger gold mine resource has recently been updated to 277,000 ounces of gold at a high average grade of 9.11 g/t, 43% larger than previously stated in 2015.

The update takes into account mining depletion and the drilling and sampling by the previous owner from June 2015 up to March 2016.

WPG is focussing on a more efficient mining operation utilising a combination of smaller scale mining equipment and reduced mining dilution.

Other Projects

WPG Resources' key South Australian gold prospects are Challenger, Tarcoola and Tunkillia.

A 10 year mineral lease was recently granted at the 100% owned Tarcoola gold project, covering the entire historical Tarcoola goldfield.

WPG will be in a position to develop the Tarcoola project, after receiving environmental clearance and finalising project finance.

During the quarter WPG conducted a drilling program in the immediate vicinity of the Tunkillia 223 deposit. It received encouraging gold assays, including 14 metres at 0.86 g/t gold and 4.9 g/t silver.


The resumption of gold production at Challenger has defined a pathway towards consistent revenue for WPG.

Reopening the Challenger mine also present potential synergies by the proximity of the Challenger mill and infrastructure to the Tarcoola gold project.

The potential for a larger resource at Challenger is on the cards as the JV partners will carry out more drilling and develop mining methods to extract the M2 resource and other potential resource blocks.

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