In an announcement to the ASX this week, the company said the claims related to the construction and operation of the Beaconsfield mine’s bioxidation plant.

The BMJV consists of Allstate Explorations NL 51.51% and Beaconsfield Gold NL 48.9%. The throughput capacity of the plant is 200,000 tonnes per annum, but gold production to date has been less than optimal.

The first claim is for up to $2.4 million against BMJV’s contract works and advanced consequential loss insurer for losses suffered as a result of reduced gold recovery rates from ore processed between January and March, claimed to be due to mechanical failures in the bioxidation circuit.

The second claim is for up to $16.64 million in respect to damages arising from alleged delays in commissioning of the bioxidation plant.

MiningNews.net contacted Allstate Explorations NL to expand further on the insurance claims but a spokesman for the company declined to comment.

The mine’s troubles in bringing its bioxidation plant up to speed have been well documented.

Beaconsfield Gold NL’s March quarterly states that gold production of 14,016oz for the quarter was only 60% of the expected gold production level at the time.

Decreased production was attributed to agitator gearbox problems in three out of the four bacterial oxidation tanks and the 10 week lead time to obtain replacement parts. The report calculated that this section of the plant was only operating at 30-50% of design capacity.

The company’s June quarterly reported continuing mechanical problems with the bacterial oxidation plant.

The mechanical performance of the agitation and aeration systems in the tanks were said to have affected feed rates to the bacterial oxidation plant, oxidation efficiency and gold recovery. Gold recovery for the June quarter averaged 71% and 15,013oz were produced.

Allstate shares were suspended on Tuesday, August 29, following its announcement to the stock market.