Dacian saves on Mt Morgans costs

PERTH (miningweekly.com) – Gold developer Dacian Gold has shaved A$23.1-million from the A$172-million infrastructure capital costs of its planned Mt Morgans gold project, in Western Australia.

The ASX-listed company has executed the engineering, procurement and construction (EPC) contract for the Mt Morgans project with GR Engineering Services at a guaranteed maximum price of A$107.1-million.

The company said on Wednesday that savings made on the EPC contract and other items had enabled Dacian to reduce the total estimated infrastructure capital cost for Mt Morgans to A$148.9-million.

“We are very pleased to have finalised this key EPC contract under a guaranteed maximum price with GR Engineering,” said Dacian executive chairperson Rohan Williams.

“This represents another significant milestone in our journey towards becoming Australia’s next significant midtier gold producer in just 11 months.”

“With the EPC contract now signed, we will move forward to finalise the terms of the underground mining contract with RUC Mining that we announced last week. Activity levels are picking up on site as well as our exploration efforts at Cameron Well,” Williams said.

The EPC contract covers the new 2.5-million-tonne-a-year carbon-in-leach (CIL) treatment facility, as well as other supporting infrastructure, including the tailings storage facility, the raw water supply infrastructure, workshops, offices and other infrastructure to support the Jupiter openpit, the main administration complex and construction of a new section of haul road between the new treatment facility and the existing Jupiter haul road.

Additional infrastructure costs not included in the EPC contract will include the permanent accommodation village, the Westerlia mine service area, certain road works and civils, power supply and reticulation, and additional owners costs totalling some A$36.6-million.

The A$220-million project is expected to deliver 186 000 oz of gold over the first four years of an eight-year mine life, based on a 2.5-million-tonne-a-year CIL operation.

A prefeasibility study into the expanded Westralia mine area has the potential to increase the mine life to nine years, with production in the first seven years expected to average 197 000 oz of gold.