Australian development and mining company Kingsgate Consolidated is seeking impairment charges of around A$300m ($277.5m) against its Challenger gold mine amidst falling commodity prices.

In addition, the company stated it would now focus on Challenger West ore body, which is expected to result in annual production rate of 70,000 ounces to 80,000 ounces for the next two to three years.

As per the new mine plan, the company is set to reduce development costs by 30%, alongside cut down of workforce due to reduced underground development. Also, gold miner is planning to execute a new mining contract on 1 August 2013, following the completion of current mining contract.

Kingsgate Consolidated CEO and managing director Gavin Thomas stated that the new strategic plan is aimed at achieving the operational flexibility in the Challenger mine and to adapt to changing market conditions.

"Whilst there is still significant work to be completed on Challenger West, the mining and exploration results completed to date highlight the potential for this to support a more sustainable mining operation at Challenger," added Thomas.

Kingsgate, meanwhile, has undertaken new resource and reserve estimation due to be completed within the next two months.