Equipment problems to hit Dacian production

Dacian Gold has lowered its full-year production forecast at its Mt Morgans gold project by up to 16 per cent, due to an equipment shortage at the mine.

In a statement, Dacian said Mt Morgans was now expected to produce between 150,000 ounces and 160,000oz this financial year, down from its previous forecast of 180,000oz.

The company said the shortfall stemmed from reduced availability of underground equipment at its Westralia deposit. Although it did not elaborate on why the problem had occurred, Daican said it had been resolved.

The availability issue limited output at Mt Morgans to an anticipated 36,000-38,000oz for the March quarter at a forecast all-in sustaining cost (AISC) of between $1,400 and $1,500/oz.

June quarter production is estimated at between 50,000-55,000oz at an AISC of between $1,050 and $1,150/oz.

Dacian executive chairman Rohan Williams said the company and its underground mining contractor had moved as quickly as possible to resolve the issues around equipment availability.

“We are confident that the issues we faced in the March quarter have been resolved and we are forecasting a strong June quarter with a corresponding excellent all-in-sustaining-cost profile which puts us on track to achieve our targeted annualised production run-rate of 200,000 ounces,” he said.

“Importantly, mine-to-mill reconciliation since processing of the Westralia underground and open pit ores started in April last year remains very good at 101 per cent.”

The $220 million Mt Morgan project reached commercial production in December.

Shares in Dacian were down 6.9 per cent to trade at $2.28 each at 3.45pm AEDT.