30/09/2015 - 14:05

Dacian's gold project to cost $157m

30/09/2015 - 14:05

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Dacian Gold's share price hit a three-year high today after the explorer said the scoping study for its Mt Morgans mine project showed it would be "an outstanding WA gold project at every level".

Dacian chairman Rohan Williams.

Dacian Gold's share price hit a three-year high today after the explorer said the scoping study for its Mt Morgans mine project showed it would be "an outstanding WA gold project at every level".

Dacian's shares continued their strong run over the past fortnight, jumping 6 cents today to close at 70 cents - their highest level since late 2012, when the stock briefly spiked higher after the company's listing on the ASX.

Dacian said it will cost $157 million to bring Mt Morgans into production by 2018.

The scoping study estimates annual production of 220,000 ounces per annum with a life of mine all-in sustaining cost of $929/oz, and at a C1 cash cost of $812/oz.

The study found the project would produce 1.2 million ounces over an initial seven-year life.

Along with existing infrastructure including a gas pipeline, haul roads and a camp, Dacian plans to build a 2.5 million tonne per annum ore processing facility.

The scoping study contemplates the development of a large open pit mining complex at the project’s Jupiter prospect, and a large underground mining complex at the Westralia prospect.

Executive chairman Rohan Williams said the scoping study showed Mt Morgans was set to be an outstanding WA gold project at every level.

“Strong production rates and low costs will likely deliver robust margins and cashflow, particularly at the current Australian-dollar gold price,” Mr Williams said.

“We are confident that Mt Morgans’ strong economic and technical merits will enable us to secure the funding required on attractive terms.

“With the definitive feasibility study on track for completion late next year and extensive infrastructure already in place, we expect to begin production in 2018.”

Dacian considers the project to be economically viable based on its ability to quickly pay back project start-up costs and provide ongoing cashflows.

The feasibility study on Mt Morgans is due to be completed next year, at which point the company’s board will make a decision on whether or not to proceed with construction of the project.

If approved, construction would begin in 2017.

Dacian plans to hire contractors to carry out all mining activity, while management and technical services will be carried out by its own personnel.

Dacian began trading on the ASX in late 2012 after completing a $20 million initial public offering at 50 cents per share.

 

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