Doray board gives nod for Deflector

The board of gold miner Doray Minerals has given the nod to proceed with developing its recently acquired Deflector project in the Murchison region as soon as it has received enough funding.

Doray said it would be targeting 160,000 ounces of gold production per annum between Deflector and its Andy Well project, at an average all-in sustaining cost of less than $1,000/oz.

The company is expecting to produce about 61,000oz of gold per annum at Deflector over an initial six-year mine life.

The project, which Doray acquired through its takeover of Mutiny Gold, will have a pre-production capex of $88.2 million.

That's about $26 million than what the company previously anticipated, but a spokesperson from the company said it was the result of an alteration to a mining schedule to start the open pit earlier, which will allow there to be more feed on the ROM pad prior to commissioning.

There was no change to infrastructure capex costs.

Doray has also hired Perth-based GR Engineering Services to construct a new 454,000 tonnes per annum processing plant at the site.

Managing director Allan Kelly said the board’s review of Deflector reconfirmed that it would be a high-grade, low-cost gold project with significant upside.

“The company looks forward to commencing construction as soon as possible once funding is completed,” Mr Kelly said.

The project will initially comprise an open pit, with underground mining planned towards the end of the first year.

Doray plans to use an existing tailings storage facility at the Gullewa mine site, which it also acquired when it took over Mutiny, with tailings to be transferred from the new Deflector plant via a new pipeline.

It also plans to construct a new accommodation village at the project.

Open pit mining is scheduled to begin in February next year, while underground mining is planned to begin in June next year.

“Doray is currently in discussions with a number of potential purchasers of the high-grade copper-gold-silver concentrate which will be produced from Deflector,” the company said.

“The response from these companies has been very positive and several draft agreements have been received for review and discussion.”

The existing infrastructure and previous mining areas of Deflector have been under care and maintenance since mining stopped in 2004.

Doray recently appointed PCF Capital as the debt finance adviser for the project.

Doray shares were 1.1 per cent higher at 46 cents each at 11:30am.