All images: Dacian Gold.
BY CAMERON DRUMMOND
THERE’S a lot to like about the rapid development of Dacian Gold’s Mt Morgans gold project. The miner has set a vigorous pace on the road to production, already coming in under its initial project cost by $23 million.
Production from Dacian Gold’s flagship $197 million Mt Morgans project near Laverton, WA is expected to start this month, less than three years after the Dacian board approved its development.
The fast-tracked gold project has been Dacian’s sole focus since its $20m initial public offering (IPO) onto the ASX in 2012.
At that time, Mt Morgans had a resource base of 840,000 ounces (oz) of gold.
In the years that followed, exploration work uncovered a further two, 1 million-plus ounce (moz) gold deposits at Westralia and Jupiter.
Mt Morgans now has a total mineral resource base of 3.3moz to produce 200,000oz a year across an initial eight-year mine life.
The project’s estimated all-in sustaining costs (AISC) of $1039/oz includes two new underground mines (Beresford and Allanson) beneath the historically mined Westralia pit, which are expected to deliver 492,000oz at a low AISC of $837/oz over an initial four year mine life. The large open pit at Jupiter contains 643,000oz at an expected AISC average of $1193/oz over an eight year period.
Dacian has enjoyed lower than expected infrastructure costs, reduced from $172m to $149m.
That infrastructure includes a new 2.5 million tonne per annum (mtpa) CIL treatment plant and tailings storage facility; 400 person accommodation village, mine service facilities at Westralia and other related mine infrastructure.
Dacian executive chairman Rohan Williams said the development and construction of Mt Morgans was proceeding exactly to plan.
“Thanks to the outstanding work by our staff and contractors, Dacian has achieved what we said we would do,” Mr Williams said.
“We remain on time and on budget, which means the project is being de?risked by the day and we are getting closer to production and cash?flow by the day.
“It’s an exciting time for the company as we continue our transformation from developer to gold producer.”
Exploration and Expansion
To help bring down the Mt Morgans AISC, Dacian has been concentrating on proving up further resources at Westralia, as Beresford and Allanson are expected to be two of Australia’s lowest cost-per-ounce deposits.
Dacian said it would be prioritising the deposits as early production and expansion sources to maximise the cash-margin from the early stage mining at Mt Morgans.
“It remains a core focus for Dacian to extend the Westralia mine area ore reserve life beyond 2021, and the 3.5mt at 6.5 grams per tonne (g/t) for 715,000oz of inferred mineral resource that lies directly along strike and beneath provides the company with the potential to extend the mine life at both Beresford and Allanson,” the company stated.
Dacian said that the first underground stope was fired in late January, and mine development was 873m ahead of its feasibility schedule.
Also underneath Westralia’s previously mined underground mine lies the Transvaal deposit, which has an ore reserve of 0.5mt at 3.9g/t for a further 65,000oz and is scheduled for mining in 2020.
Mr Williams said the exploration front was also starting to bear fruit, with RC drilling results released in February confirming the Cameron Well prospect as Dacian’s third major discovery.
“RC drilling has now intersected good widths and grades of shallow oxide mineralisation over an area of 1.5km by up to 1km, confirming the mineralisation seen in our original aircore drilling programs laying the foundations for a maiden oxide Mineral Resource,” he said.
“This is a very exciting development given the vast extent of anomalism and mineralisation seen in previous drilling over an area of 6km2.
“We have commenced a 16,000m RC program targeting a maiden oxide Mineral Resource at Cameron Well.
“In parallel, we have started collecting Feasibility Study data to be used in assessing the potential for oxide Ore Reserves at Cameron Well with the target of announcing a maiden ore reserve by the middle of the year.
“With the additional discovery of at least four bedrock structures below the extensive oxide gold mineralisation, we are confident that Cameron Well has the potential to become the company’s third significant mining complex at Mt Morgans.
“With our first gold pour now just seven weeks away, this exciting discovery comes on the eve of Dacian Gold’s transformation to become Australia’s next significant mid?tier gold producer.”