Dalgranga confirmed as low-cost, high-margin gold development – Gascoyne

PERTH (miningweekly.com) – A feasibility study of the Dalgaranga gold project, in Western Australia, has indicated that the project could produce 592 000 oz over a six-year mine life.

ASX-listed Gascoyne Resources reported on Friday that the feasibility study projected that the project would require a capital investment of A$86-million, based on two opencut mines and a new conventional semiautogenous grinding mill circuit, and gravity and carbon-in-leach processing plants with a 2.5-million-tonne-a-year capacity.

The project is estimated to have a life-of-mine operating cash cost of A$869/oz, and will deliver revenues of A$866-million.

The feasibility study estimated a pretax net present value of A$177-million and an internal rate of return of 65%, based on a gold price of A$1 600/oz.

“The completion of the feasibility study and calculation of an updated ore reserve for the project is a considerable step forward for the company,” said Gascoyne MD Mike Dunbar.

“It confirms Dalgaranga will be a low-cost and high-margin Western Australian gold development with very robust economics. The higher grades from the Golden Wings deposit, along with the low all-in sustaining costs, will allow very rapid paybacks of the preproduction capital costs and will set the project up to remain competitive at gold prices well below the current levels.”

On the back of the compelling outcomes of the feasibility study, the Gascoyne board has decided to proceed to construction at Dalgaranga, subject to suitable financing arrangements.

Dunbar said that the six-year mine life was just an initial estimation, with significant exploration potential still remaining outside the resource and current mine plans at the Gilbey’s South prospect, as well as other regional prospects.

An aggressive exploration effort would continue to further enhance the project, Dunbar said.