JOHANNESBURG (miningweekly.com) - Gold miner Millennium Minerals has awarded its first-ever underground mining contract at the Nullagine operation, in Western Australia, naming GBF Underground Mining Company as the contractor for the new Bartons underground mine development.

The underground development will access high-grade, free-milling mineralisation located directly beneath the existing Bartons openpit, where the company has been undertaking an extensive pit cutback.

Works at the underground mining services contract, which has an initial term of three years, include the establishment of an underground portal for Bartons, all decline and level development, as well as all ore driving and stope production. The contract also includes two 100 m exploration drill drives.

The award of the underground mining contract follows the recent announcement of a 22% increase in the Bartons underground mineral resource to 627 000 t at 4.9 g/t gold for 97 900 oz of contained gold, and an interim ore reserve of 270 000 t grading 4.5 g/t gold for 39 000 oz of contained gold.

It is envisaged that GBF Underground will mobilise to Nullagine later this month, the company reported on Monday, with underground mining set to begin at Bartons in March.

"We are rapidly progressing towards the development of our first underground mine at Nullagine, and we're looking forward to working closely with GBF as they mobilise to site in the coming weeks and prepare to begin portal development at Bartons later this quarter," Millennium CEO Peter Cash said in a statement.

He further added that exploiting the potential of the deeper primary mineralisation identified beneath the many oxide deposits across the Nullagine goldfield was a key component of the company's strategy to increase production and mine life, and that this marks an important first step in that process.

"The experience which we gain from this first milestone development will be invaluable to our broader underground development strategy, providing invaluable geotechnical, geological and structural information that will be applicable to the other underground studies currently in progress," he added.