Doray to take $50 million impairment

Gold explorer and developer Doray Minerals will take an earnings hit of between $40 million and $50 million due to a fall in the Australian dollar gold price.

The company had used a $1,600 an ounce gold price in its initial bankable feasibility study, but the current spot price is closer to $1,300.

Doray is mining the Wilber Lode deposit at the Andy Well gold project in northern Murchison, which has been in production for almost a year.

The company has also discovered two additional high-grade deposits at the project, winning founding directors Allan Kelly and Heath Hellewell the Association of Mining and Exploration Companies prospector of the year award in 2014.

These discoveries, and an extension of the Wilber Lode deposit, have Doray expecting to extend gold production beyond the initial mine life.

The impairment came after Doray’s review of non-current assets and the value will be finalised when the company’s financial statements are released for the year to June, expected to be in September.

The company said there would be no impact on its existing project finance facility.

Last month, Doray announced it would purchase a majority interest in Archean Star Resource’s Gnaweeda gold project, also in the Murchison Region.

Doray was down 2.2 per cent to 63 cents at the time of writing.