The Paddington mine, about 30km north of Kalgoorlie, was initially opened by Goldfields in 1985.
 
Gold heavyweight Barrick Gold was next on the scene, in 2006, after snapping up Placer Dome.
 
But Barrick’s preference for producing high-marginal ore sources prompted it to offload the operation that same year to unlisted group, Link Investment Holdings SA.
 
Paddington’s fate was not yet sealed, however, with Norton Gold Fields making a $45 million play for the asset in early 2007, after Link was unable to complete the transaction.
 
In exchange for the equity payment, Norton received a 150,000-ounce asset as well as the processing plant, which at the time treated about 3 million tonnes of ore per annum.
 
Norton also acquired a portfolio of prospective exploration ground containing about 1.4 million ounces of resources.
 
The Paddington mill is the centre of the 678sq.km operation, and includes the recently opened Enterprise mine, the Homestead underground mine, the Blue Gum East deposit and the Navajo Chief open cut.
 
Paddington and the suite of nearby deposits worked well for Norton for a few years.
 
The company incrementally lowered costs and managed to commit to aggressive exploration in the area. Norton also marked the opening of the $13 million Homestead underground mine as part of the company’s commitment to produce 200,000oz.
 
After a good run, higher costs soon started to plague the asset, with C1 quarterly cash costs tipping in at $1281/oz at one point in 2012.
 
Norton entrusted the self-confessed, gold-obsessed Chinese to turn the operation around, with then boss Andre Labuschagne saying it was an exciting time for the company after it received a $229.4 million takeover offer from its largest shareholder, Zijin Mining Group.
 
Zijin is China’s largest gold producer and also manages operations around the world.
 
Zijin later finalised its friendly takeover of Norton, marking a new chapter in Paddington’s life.
 
In light of the takeover, Labuschagne stood down and former CITIC Pacific Mining chief operating officer Dianmin Chen was appointed Norton’s managing director and CEO.
 
At this year’s Diggers & Dealers event in Kalgoorlie, Zijin celebrated its first-year anniversary of the Norton takeover and took the time to take analysts and media on a site visit to spruik its operational achievements.
 
Under Zijin’s control, Norton announced a long-term goal to double production to 300,000oz per annum within the next 3-5 years.
 
Chen admitted this was a challenging growth rate but accepted the target.
 
“I think we are travelling reasonably well,” he told MiningNewsPremium.
 
Norton recently achieved half-year production guidance at Paddington, reporting 85,517 ounces of gold output for the six months to June, at a cash cost of $1031 that was lower than expectations of $1060-$1140/oz.
 
The nameplate capacity at Paddington is 3.3 million tonnes, however, the company is running above that at 3.5Mt.
 
While Zijin has managed to increase production and lower cash costs at Paddington, the company is not content with maintaining that result. It is in pursuit of further reductions in operating costs and a boost to gold output thanks to off-hiring of contractor equipment and making the recent move to an owner-operator model.
 
The company has forked out $65 million on an open cut and underground mining fleet to replace equipment hired from mining contractors.
 
As part of its fleet, Norton has invested in a Hitachi 3600 excavator, a fleet of Caterpillar gear including 789DQ trucks, loaders, dozers, graders and water trucks, along with twin and single-boom drills, and auxiliary underground support equipment.
 
“The productivities of the new equipment is already being felt, with both improved availability and increased volumes being moved, especially at Enterprise,” Norton said.
 
With the company recently celebrating the opening of the Enterprise mine, Norton is confident of reaching targeted production of 163,000-167,000oz this year at a cash cost of $970-$1010/oz, which will represent an 11% increase in production and a 12.5% fall in costs on the 2012 calendar year.
 
Chen said while the company could not control the rollercoaster nature of the market, or the volatile gold price, it had the alibility to focus on the two most important aspects of running a gold mine.
 
“We’re a small company, we cannot control the gold price,” Chen said.
 
“For us, increased production and reducing costs are the two most important tasks for the gold miners.”
 
“Even with the gold price at $1200, we are still very profitable.”
 
One initiative Norton is investigating – to make good on its plans to make sure Paddington is a sustainable low-cost, sustainable asset – is the potential of heap leaching.
 
Norton has started a feasibility study on the front following column-leach test work that demonstrated high gold recoveries, confirming the potential to add considerable long-life, low-cost ounces to existing operations.
 
“This is just one of the areas of technological innovation we are investigating to increase production, and ties in with Norton’s vision of setting the industry benchmark in innovation,” Norton said.
 
Norton is also balancing its goal of increasing production and lowering costs with its mission of aggressively pursuing exploration to ensure Paddington’s legacy lives on.
 
In what is no doubt a testament to Norton, the company’s successful exploration and resource development work has resulted in the Paddington operation’s resource inventory varying little from about 6 million ounces in the past five years.
 
Despite mining depletion of 870,000oz for the same period, the company has maintained an ore reserve of about 1Moz.
 
The Paddington operation has a 10-year mine life, but Norton is confident of extending that substantially.
 
Norton has a pipeline of 80 known prospects across its extensive landholding, placing ongoing investment in exploration and resource development by approving a $77 million investment into proving up resources last year.
 
“The balance between the exploration and production is quite clear because to make production sustainable, you need exploration and you need a large resource base to make your production sustainable,” Chen said.
 
“Uncovering resources is our key for growth, so we’re going to continue to invest in exploration.”
 
The Mount Pleasant project is an open pit and underground mining hub that remains the main focus for exploration and resource development.
 
Ongoing programs there include a review of open cut and underground resource potential of the Tuart prospect, evaluation of deep high-grade mineralisation potential at the Golden Kilometre prospect, and continued resource definition of the Homestead high-grade mineralised veins.
 
Norton is also reviewing smaller open cut targets at Blue Gum West and near-surface extensions of the Black Flag West vein.
 
In addition, the recently opened Enterprise mine and the broader Ora Banda project remain important and prospective resource development areas.
 
“Our major ore bodies remain open along strike and at depth, so that offers opportunities to further increase our resource base,” Chen said.
 
Norton, meanwhile, remains committed to its goal of zero harm across its 472-man workforce, which comprises 113 contractors. The company has managed to halve its lost-time injury frequency rate to 6 and continues to work on further reducing this figure.
 
While Norton is kicking goals at Paddington, Zijin’s growth mandate means more success at the operation is on the cards.
 
“Our pace for growth isn’t going to slow down” Chen said.
 
“In the next 12 months, we’re going to keep looking for high-quality ore to further increase our mill feed grade.
 
“Our operations will be here for a long time.”