Da­cian Gold

Da­cian Gold has a clear path to be­come Aus­tralia’s next mid-tier gold miner with ex­pand­ing cash flow and or­ganic growth from its newly opened Mt Mor­gans project.

The Australian Mining Review - - CONTENTS - JES­SICA CUM­MINS

IN late March, first gold was poured at Da­cian Gold’s flag­ship $200 mil­lion Mt Mor­gans gold project in WA.

It was big mile­stone for the ju­nior miner; for one Mt Mor­gans pre­sented Da­cian with 200,000 ounces of gold pro­duc­tion over a 10-year mine life.

The project also of­fered or­ganic growth through its min­ing cen­tres Wes­tralia, a 1 mil­lion tonne per an­num (mtpa) un­der­ground op­er­a­tion; Jupiter, its 1.5mtpa open cut op­er­a­tion; and new dis­cov­ery Cameron Well.

Da­cian Gold ex­ec­u­tive chair­man and chief ex­ec­u­tive Ro­han Wil­liams told The Aus­tralian Min­ing Re­view the project would re­main a key fo­cus for the com­pany over the com­ing years un­til it was known how big the Mt Mor­gans gold op­er­a­tion could be.

“It’s all about get­ting to steady state, that’s the next big step for us — get­ting up to our 200,000 ounce run rate — which we be­lieve we can do by the end of this cal­en­dar year,” Mr Wil­liams said.

“We are very fo­cused on get­ting to that level.”

Mr Wil­liams said the June quar­ter was a great suc­cess for the com­pany.

“When we set our­selves a tar­get of pro­duc­ing gold at a par­tic­u­lar time and we meet that tar­get then that is a good tick for us,” he said.

“When we say we want to pro­duce be­tween 30,000 and 40,000 ounces in our first quar­ter and we do 34,000 ounces, then that’s an­other good tick.

“I sus­pect in­vestors are qui­etly pleased that we are do­ing what we say we are go­ing to do.”

In FY19 Da­cian’s pro­duc­tion guid­ance was tar­get­ing be­tween 180,000 and 210,000oz of gold.

Mt Mor­gans

Da­cian ac­quired Mt Mor­gans in early 2012 be­fore rais­ing $20 mil­lion in an IPO, which fi­nanced three years of ex­plo­ration.

“We made two dis­cov­er­ies pretty quickly, and then over the next three years we turned those dis­cov­er­ies into pro­duc­ing gold mines,” Mr Wil­liams said.

The two min­ing com­plexes – Wes­tralia (Beres­ford and Al­lan­son un­der­ground mines) and Jupiter – are 15 km apart.

Da­cian’s third, un­de­vel­oped min­ing cen­tre, Cameron Well – 9km to the north-west of the com­pany’s new 2.5mtpa treat­ment plant – was also show­ing prom­ise.

In Septem­ber 2016, Da­cian be­gan the first round of re­con­nais­sance drilling at Cameron Well, which con­firmed it as a large, highly prospec­tive gold tar­get.

Mr Wil­liams said with Wes­tralia and Jupiter up and run­ning, it was “get­ting back into ex­plo­ration” at Cameron Well, with the aim of an­nounc­ing a re­serve for the de­posit by the end of the cal­en­dar year.

“Hope­fully it will be­come our third mine,” he said.

Ex­plo­ration

Mt Mor­gans is sit­u­ated among nu­mer­ous mul­ti­mil­lion ounce gold mines within Laver­ton, the sec­ond high­est en­dowed gold dis­trict in WA after Kal­go­or­lie.

“Ex­plo­ration is im­por­tant be­cause we be­lieve that the gold field we have at Mt Mor­gan’s is big­ger than what it cur­rently is,” Mr Wil­liams said.

“It’s in­cum­bent for us, and our share­hold­ers ex­pect us, to de­ter­mine if our ideas are right.

“We think there is a lot more gold to be found and rather than sit on our hands and do noth­ing - if we find more gold, that in­creases the share price and in­creases value.”

Dur­ing the June quar­ter, Da­cian dis­cov­ered two thick high-grade in­ter­sec­tions – 3.1g/t gold from 59m and 2.6 g/t gold at 96m at Cameron Well.

“The more we drill at Cameron Well, the more we be­lieve we are onto some­thing very sub­stan­tial here,” he said.

The prospec­tive Laver­ton gold dis­trict is known to be home to syen­ite, which Mr Wil­liams said “is an un­usual rock type that con­tains gold.”

“There are very few other places in WA where you find them and there is a real con­cen­tra­tion of them in Laver­ton – Cedar Is­land on Lake Carey to the south of Mt Mor­gans is one of them,” he said.

“If you have a syen­ite you have a pretty good chance that you’re go­ing to find gold.

“Ex­plo­ration is never suc­cess­fully guar­an­teed but just by virtue of it be­ing a syen­ite rock type it has the po­ten­tial of host­ing gold – and if we are re­ally lucky Cedar Is­land might be­come our fourth mine.”

Look­ing Ahead

Mov­ing into 2019, Mr Wil­liams said Da­cian had a two part goal.

“We want to main­tain that pro­duc­tion level at 200,000 ounces of gold per an­num, which will give us the mid-tier sta­tus that we are look­ing for,” he said.

“And the sec­ond part is to find new ore re­serves and look at how to im­prove share value by bring­ing them into pro­duc­tion.”

All im­ages: Da­cian Gold.

Cameron Well is be­tween the com­pany’s Wes­tralia and Jupiter min­ing ar­eas at Mt Mor­gans.

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