History

Challenger was a virgin gold discovery made by Dominion in May 1995 (two years after the Company’s pioneering exploration efforts in the Gawler Craton commenced). However, the project was not developed for several years as Dominion and its former joint venture partner, Resolute Ltd, focused on other projects and interests.

After reaching agreement to purchase Resolute’s 50% interest in December 2000, Dominion commenced a Bankable Feasibility Study on the development of an open cut mining operation. Shortly after this study was completed in September 2001, the decision was made to proceed with construction of a processing plant and infrastructure.

Open pit mining commenced in mid-2002 and plant and infrastructure was completed during the September 2002 Quarter. Plant commissioning commenced, on schedule, in late September 2002 and the first shipment of gold bullion was completed on 24 October 2002.

Mining of the Stage 1 open and small adjacent cutback was completed by April 2004 to the final planned design depth of 120 metres below surface.

Underground development commenced in February 2004 with the construction of a decline and associated surface facilities adjacent to the open pit.

Underground development continued throughout 2004, enabling full-scale underground production to begin in early 2005.

Mining of the first two underground production stopes provided an enhanced geological understanding of the mine. Higher than anticipated dilution of grade in the narrower, lower grade areas of the first stope resulted in important changes being made to the underground mine design and method. This resulted in an immediate reduction in dilution at following levels.

The benefits of these changes flowed through in the 2005/06 financial year, resulting in a 150% increase in gold production to 108,080 ounces and a sharp reduction in cash operating costs to A$280/ounce.

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