The Bendigo Goldfield is Australia's second largest goldfield, having produced 22 million ounces of gold between 1851 and 1954. Development of the modern decline mine, initially for underground exploration and bulk sampling, commenced in 1998. The project is targeting new reefs below and along from historic workings beneath the city of Bendigo._x000D_
The major technical challenge for the project is the inability to solely use drill core gold assays to estimate the grade of reefs, due to the coarsegrained nature of gold mineralisation, known as the nugget effect. In 2002, a program of bulk sampling commenced, resulting in the development of factors for converting drill hole grades to in situ reef grades. In mid 2006 commercial production commenced following the construction of a 600 000 t/yr processing plant adjacent to the Kangaroo Flat Mine portal, with plant feed being derived from four reefs in the Sheepshead and Deborah lines of reef._x000D_
In early 2007 it became clear that the initial ore reserves had been overestimated, leading to an immediate change of strategy from production to exploration. A cash conservation program was also put in place. Exploration refocused onto the more historically productive Garden Gully and New Chum lines of reef, whilst a new grade estimation tool based primarily on the visual assessment of drill core was implemented. Immediate exploration success occurred with the discovery of four reefs in the Garden Gully line in early 2007._x000D_
Successful step-out drilling during the year led to the decision to undertake trial mining in Gill reef. Trial production commenced in June 2008 and includes the processing of discrete ore blocks and the introduction of selective mining techniques._x000D_
This paper examines the steps that have been taken to refocus exploration and to gain confidence in new exploration results, particularly through the visual grade estimation technique and assessment of trial mining Gill reef on the Garden Gully line. In addition, project factors relating to human skills, community relationships and financial management in a dynamic external environment are also addressed.