Climax Mining Ltd continues to move closer towards production at its copper-gold project at Dinkidi in the Philippines with the announcement of further capital equipment purchases and successful continuation of the planning and construction activities at site.

Climax has placed an order for two Outokumpu grinding mills for the Dinkidi Project at a cost of Aus$13 milliion and a delivery time of up to 90 weeks. The order also includes spare parts and the motor sizing of 4,300 kWh for both mills allows for rationalization of spares.

The mills consist of a 7.3m diameter SAG mill and a 5.5m diameter ball mill.

The grinding circuit is rated at an average 2.5 million tonnes per annum capacity covering the various ore suites and hardness variations for Dinkidi ore.

Climax CEO Rob Thomson says "the grinding circuit has been identified as the critical long lead item and the timing of this order allows Climax to achieve commercial production during third quarter 2008".

The Dinkidi gold-copper deposit, located in the minerals-rich Northern Luzon region, northwest of Manila. Dinkidi is expected to produce at a rate of 227,000 ounces gold equivalent over 10 years. Dinkidi's current reserves total 2.5 million ounces gold equivalent from a total resource of 5.8m ounces gold equivalent, with very strong potential to upgrade the resource through further exploration.

Work is progressing well at the site with the access road upgrade making good progress. All Dinkidi site geotechnical work has been completed ready for construction and camp construction design is starting. The final engineering reviews are in progress across a wide range of early award contracts such as open pit mining.

The Neuva-Viscaya State University has undertaken pre-construction baseline social and environmental studies. The results of these studies will be integrated into the construction and social development program.

The wet season has now started in the Philippines, but no significant hindrance has occurred to site development activities that are being undertaken.

"In this wet season period through to January 2007 the major planned activities will include detailed process and infrastructure design. The development plan is to then come out of the wet season ready for ground activities, earthworks construction and early equipment ordering," Rob Thomson says.

These plans are subject to completion of financing and final land acquisition and with the excellent progress being made the Company is confident of maintaining this development schedule.