Dacian Gold is on the cusp of becoming Australia’s next mid-tier gold producer, after a transformational 2016 which saw a 90,000m drilling program increase the Mt Morgan resource by 176 per cent.
GOLD developer Dacian can see the light at the end of the tunnel after almost six years of exploration and development at its near-production Mt Morgans gold project near Laverton, WA.
Gold production will be principally sourced from two mining areas, Jupiter and Westralia, for expected annual production of 200,000 ounces per annum (ozpa).
At the company’s IPO to the ASX in 2012, Mt Morgans had a resource base of 840,000 ounces (oz) of gold.
By the time Dacian released a definitive feasibility study in November 2016 that resource base increased almost four times to an ore reserve of 1.2 million ounces (moz) and a resource of 3.3moz.
After securing $150m in project debt funding, Dacian began construction works in early 2017.
In tandem with mine development, an expansion study at the Westralia mine area outlined a potential ore reserve increase to 21.4 million tonnes (mt) at 2.4 grams per tonne (g/t) for 1.65moz, which would increase the mine life from eight to nine years and reduce all in sustaining costs (AISC) to between $970/oz and $975/ oz due to higher grade ore finds.
In a September update the company revealed that construction of its 2.5 million tonnes per annum (mtpa) treatment plant was more than 25 per cent complete, and underground mining at the Beresford deposit had passed the 1000m mark, ahead of schedule.
Then, on 4 October Dacian intersected first ore at the Beresford underground mine, four weeks ahead of schedule.
Beresford is one of two mines that make up the 1.6moz Westralia resource at Mt Morgans.
Total capital costs for the Mt Morgans were estimated at $197m, made up of a reduced infrastructure spend of $149m and mine establishment costs of $48m.
“Project construction at Mt Morgans is on time and on budget, ensuring we
“the size of the anomaly is consistent with a large deposit at depth and we are spending $1m a month working aggressively and in parallel with the development of Mt Morgan’s to realise its potential.”
remain firmly on track to start production from March next year,” Dacian executive chairman Rohan Williams said.
“It is remarkable that it was less than five years ago that we completed our IPO as a junior explorer and now we have mined the first ore from the two 1 million ounce discoveries we have made since then. In less than six months, we will be Australia’s newest mid-tier gold producer.
“Dacian’s success is due to the exceptional skills and work ethic of our employees, consultants and contractors, including RUC Mining.
“I would like to thank them all for getting the company to where it is, and to where it is going.”
Unlike most other miners to develop their first producing asset, Dacian Gold is undertaking a simultaneous exploration program at its Cameron Well prospect, 9km northwest of where Dacian’s 2.5mtpa treatment facility will be located.
In August, the company intersected gold in all six diamond drill holes at Cameron Well, confirming the shallow dip of a mineralised, 1.5km long structure.
Mr Williams said progressing exploration in tandem with ramping up Mt Morgans underpinned the company’s confidence in an asset which could become the company’s third major gold system.
“We have four exploration drilling rigs operating, three of which are at the highly promising Cameron Well prospect, as part of our strategy to continue growing the mineral resource base and mine life,” Mr Williams said.
“Cameron Well is an emerging discovery with a clearly defined very large zone of near surface gold.
“The real prize there will be finding a large resource to turn into an underground mine.
“The size of the anomaly is consistent with a large deposit at depth and we are spending $1m a month working aggressively and in parallel with the development of Mt Morgan’s to realise its potential.”
Mr Williams said the team at Dacian was looking forward to the 2018 March quarter as they counted down to production, increase cash flow and continue exploration drilling.
“Our plan is to put half a million tonnes of high grade ore on the ROM pad ready for when we turn the plant on to have quite a fast ramp up of production.”
Underground at Beresford.
The historic Westralia deposit was first discovered in 1896.