Mt Morgans to cost A$220m

PERTH (miningweekly.com) – The Mt Morgans gold project, in Western Australia, could deliver 186 000 oz/y over the first four years of an eight-year mine life, a new feasibility study has revealed.

ASX-listed Dacian Gold said on Monday that the project would require a capital investment of A$220-million, and would include the construction of a new 2.5-million-tonne-a-year carbon-in-leach treatment and tailings storage facility.

The feasibility study estimated that the project has an initial ore reserve of 18.6-million tonnes, grading 2 g/t gold for 1.2-million ounces of gold. The Westralia mine area is estimated to have an initial ore reserve of 492 000 oz, while the Jupiter mine area is estimated to host a 643 000 oz reserve.

In addition to the feasibility study, Morgans also released a prefeasibility study (PFS) on the potential to expand the Westralia mine area, including increasing the 1.2-million-ounce Mt Morgans reserve to 1.7-million ounces by potentially increasing the Westralia mine area to 938 000 oz.

About 73% of the ounces considered in the expansion PFS are underpinned by the existing high confidence in the ore reserve.

Dacian noted that the mine life could also potentially be extended to nine years, with production in the first seven years averaging 197 000 oz of gold.

The expansion will require an additional A$3-million in capital, with no additional financing or material permitting required.

Executive chairperson Rohan Williams told shareholders that the studies showed the Mt Morgans project would be a high-quality gold project with significant production scale, low costs and outstanding potential for further growth.

“It is almost four years to the day that Dacian listed on the ASX as a junior explorer and today we announce an initial eight-year ore reserve that will mine 1.2-million ounces of gold.

“We have delivered on our feasibility study target of converting the 2015 scoping study potential production profile into a maiden ore reserve.”

Williams said that there were also abundant growth opportunities, with the new expansion PFS demonstrating the potential to increase production while potentially reducing all-in sustaining costs to around A$970/oz, from A$1 039/oz, over a nine-year period.

“Add to that the excellent exploration upside, and its not hard to see a long mine life at Mt Morgans,” he added.

The Dacian board has approved the PFS, and subject to obtaining suitable financing arrangements, has approved the project to proceed to construction.

It is anticipated that construction will start immediately after project financing has been completed, with gold production targeted to start in the first quarter of 2018.