Da­cian Gold

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.

The Australian Mining Review - - CONTENTS - CAMERON DRUM­MOND

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.”

Ex­plo­ration

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.”

Im­age: Da­cian Gold.

Un­der­ground at Beres­ford.

The his­toric Wes­tralia de­posit was first dis­cov­ered in 1896.

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