21/11/2016 - 14:49

Dacian's gold project to cost $220m

21/11/2016 - 14:49

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Dacian Gold says it will cost $220 million to bring its Mt Morgans gold project near Laverton into production, which it hopes to do by early 2018.

An artist's impression of Dacian Gold's Mt Morgans gold mine near Laverton.

Dacian Gold says it will cost $220 million to bring its Mt Morgans gold project near Laverton into production, which it hopes to do by early 2018.

The Perth-based aspiring gold miner released its feasibility study on Mt Morgans today, which was completed by GR Engineering Services.

The study revealed a $172 million cost to develop infrastructure at the project, including a 2.5 million tonnes per annum CIL treatment facility and tailings storage facility, a 416-person accommodation village and mine service facilities.

Mine-establishment costs have come in at $48 million.

The study has predicted an initial ore reserve of 18.6mt at 2 grams per tonne of gold for 1.2 million ounces at an all-in sustaining cost of $1,039 per tonne.

The project will have an initial mine life of eight years.

Dacian plans to fund the project’s costs through a combination of debt and equity, and expects to enter into a project facility agreement as early as next month.

It plans to begin construction work immediately after locking in project financing, with first production targeted for the first quarter of 2018.

Dacian chairman Rohan Williams said the studies showed the project would be a high-quality gold project with significant production scale, low costs and potential for further growth.

“It is almost four years to the day that Dacian listed on the ASX as a junior explorer and today we announce an initial 8-year ore reserve that will mine 1.2 million ounces of gold,” he said.

“We have delivered on our feasibility study target of converting the 2015 scoping study potential production profile into a maiden ore reserve.

“There are also abundant growth opportunities, with the new expansion PFS demonstrating the potential to increase production while potentially reducing the all-in sustaining costs to around $970/oz over a nine-year period.

“Add to that the excellent exploration upside, and it’s not hard to see a long mine life at Mt Morgans.”

Dacian shares closed 2.5 per cent lower to $3.07 each.

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