Gascoyne clinches long-term LNG deal for Dalgaranga project

JOHANNESBURG (miningweekly.com) - ASX-listed Gascoyne Resources, through its 100%-owned subsidiary GNT Resources, has executed a long-term liquefied natural gas (LNG) fuel supply agreement with Evol, a fully-owned subsidiary of the Wesfarmers group.

The locally sourced LNG provides the lowest-cost and lowest-emissions fuel solution for the power generation needs of Gascoyne's Western Australia-based Dalgaranga gold project. Another significant advantage is that LNG will be used in the project's 2.5-million-tonne-a-year gold processing facility to fuel its carbon regeneration kiln, elution boiler and bullion furnace, reducing the cost and complexity of multiple fuel sources within the plant.

Construction of the LNG facilities and Zenith Pacific's 15 MW power station has started and is on schedule for completion prior to the commissioning of the processing plant, which is on track for May this year.

"This provides Dalgaranga with a low-cost, clean, reliable and locally sourced fuel solution. The LNG supply agreement, with extension options, provides certainty for the project, giving us the ability to grow the project, knowing that there is a long-term fuel solution in place.

"The choice of gas-fuelled generators considerably derisks the project, as it reduces input costs and substantially lowers our exposure to any future escalation in the diesel price for power generation. LNG also provides flexibility to fuel parts of the process plant with LNG, rather than having to source other, more expensive, fuel options for the elution and recovery circuits as well as the carbon regeneration kiln," Gascoyne MD Mike Dunbar said.