Following the completion of open pit mining operations in April 2004, Challenger transitioned to underground mining operations in the second half of the year, commencing full-scale underground production by mid-2005.

The Challenger underground mine was developed to extract high-grade gold resources located directly beneath the open pit. The underground orebodies occur as narrow, high-grade, sub-parallel lodes linked as dilational zones within an asymmetrical fold system. The folds and lodes have predictable and consistent down-plunge continuity.

Four principal ore positions have been delineated - the M1 and M2 lodes, which between them contains over 98% of the gold in underground reserves - and the M3 Shadow Zone. All four lodes remain open at depth, while drilling of the M1lode has demonstrated the continuity of the orebody to approximately 1000m below surface, although it is known to persist to at least 2km down-plunge..

Underground Operations and Services

Two stopes were initially trialled above the 1020 level to optimise underground stope designs for mining of the M1 orebody. This process commenced in the last quarter of 2004/05 financial year and was completed by the end of July 2005. Since then, mining dilution to stopes has been minimised by applying optimal drilling and blasting techniques.

The M1 orebody, which has been the principal source of production to date, is remarkably consistent down plunge, although it has a complex geometric shape. By the end of the 2007/08 financial year, stoping was in progress from the M1 orebody on the 600 level.

The primary source of development ore was mined from the M2 shoot including the 420 - 360 levels at the bottom of the mine, the 820 and 800 upper levels and various intermediate levels between the 760 and 520.

Preliminary development of the M3 shoot progressed on the 760 and 780 levels. The M1 shoot was only accessible towards the end of the quarter with development in progress on the 360 level.
The majority of ore stoped was sourced from within the M2 shoot between the 840 -820 levels, the 560 - 540 levels and the base of the mine between the 420 - 360 levels. Minor supplementary tonnes were stoped from the M1 shoot on the 380 level and some ore from the M3 shoot mined by hand-held methods from the 1000 level.

The late commissioning of the ventilation circuits also delayed development and access for further diamond drilling at depth designed to drill out additional reserves of the M1 and M2 shoots. The current accelerated development will allow this diamond drilling to recommence in August.

Geotechnical issues associated with the underground development have been identified and are being monitored, with generally good ground conditions encountered in the altered granite rock.

Both primary host rock and the quartz, feldspar, garnet veins associated with gold mineralisation are generally competent, necessitating minimal ground support.

Underground conditions are effectively dry with little groundwater seeping into the mine. Ground stresses are continually monitored and continue to be low. Geotechnical specialists visit site on a regular basis to review ground conditions and the quality of mining.

Processing Plant
The Challenger processing plant is a conventional CIP gold processing facility, which over the last 12 months has undergone a debottlenecking process to achieve a throughput capacity for primary ore of 425,000 tonnes per annum. In 2007/08, plant throughput was increased to a new base rate 50 and 56 tonnes per hour which will increase to 65% when the second ball mill is commissioned. The mill averaging 96% availability.

A major plant upgrade was completed beginning 2010 with the addition of a second ball mill, the installation of a thickener, an underground ventilation shaft, an additional storage facility and increased underground power supply. 

With the continued success of the Company's drilling programs at Challenger, Dominion is currently in the process of undertaking an expansion study which involves an increase in the throughput rate of the mill from the current 430,000 tonnes per annum to around 650,000 tonnes per annum to increase long-term production levels.

The treatment flowsheet comprises a jaw crusher supplemented by a cone crusher, a ball mill, a gravity circuit to recover coarse gold, cyanidation leaching and absorption circuit and conventional elution and electrowinning to produce gold bullion.

An on-site laboratory using the latest LeachWell equipment to assay drill samples has proved an invaluable tool, providing rapid results from underground samples, to help accurately align the direction of ore drives and stopes with the narrow high-grade folded veins.

Infrastructure

The main Challenger project infrastructure covers an area of approximately 300hectares and includes the processing plant, a mine village housing up to 140 personnel working a fly-in /fly-out roster, reagent and fuel storage facilities, offices, workshops, a laboratory, ancillary buildings and haul roads.

Water is supplied from a process water borefield located approximately 3 kilometres west of Challenger.

The walls of the tailings dam are lifted as required to extend tailings storage capacity as the mine deepens.

A diesel power station, approximately 5 MW capacity, supplies power to the treatment plant, underground mine and village. 1500kVA capacity substations are installed underground, powered from this surface power station adjacent to the processing plant, located 1km from the underground portal.