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Filed Under: Mining and quarrying, Metals, Company Information Australian firm CGA Mining Ltd. said it was considering expanding its still unfinished plant in its gold project in Masbate province.

The company said onsite construction was on track with its target to start production in the first quarter of 2009.

CGA Mining has contracted Leighton Contractors Asia Ltd. to build the gold processing plant, which will have a capacity to process four million tons of ores a year.

In a project update, the company said it was completing research that might lead to a feasibility study on expanding the plant's throughput capacity to five million tons a year.

It said that according to the latest estimates the probable gold reserve in the Masbate project could reach 3.08 million ounces of gold, worth $2.25 billion, 53 percent more than the previous estimate.

It said the probable reserve was contained in 92.2 million tons of ore at a grade of one gram of gold per ton.

The ores are spread over four areas: Holy Moses Basalt, with 57.2 million tons of ores; Main Vein, 23 million tons; Colorado, 11.4 million tons; and Montana, 629,000 tons.

CGA Mining said the reserves were in three major independent pits and a number of smaller surrounding pits.

The value estimate "is based on a gold price of $750 and also includes an additional mining recovery allowance of 95 percent, which is more conservative" than an estimate made in May 2006, it said.

CGA Mining also said it was striving to build and maintain good relations with the six villages affected by its operations, by hiring locals.

It said four-fifths of the gold project's workforce came from Masbate, an island province south of Manila.

CGA Mining last month said it was setting up a 30.2-megawatt power plant complex in Masbate in preparation for the start of gold production.

It said the complex would have three 6.4-megawatt and two 5.5-megawatt units, which it said had been delivered for assembly at the site.

The plant complex, which will run on bunker oil, is expected to provide cost-effective and reliable supply for the processing plant that would accommodate four million tons of ore per year, and there is excess generating capacity provisioned for a throughput expansion to five million metric tons a year, it said.