Mt Morgans Gold Operation

Dacian Gold Limited (ASX:DCN) acquired the Mt Morgans operations in early 2012, and after raising A$20M in an IPO, listed on the ASX in November 2012. The funds from the IPO raising financed three years of exploration on the Mt Morgans Gold Operation (MMGO). In those three years the Company discovered over 1 million ounces of gold at each of the Westralia and Jupiter Prospects, at a discovery cost of less than A$7/ounce, leading into a scoping study and then proceeding to the completion of a successful Feasibility Study.

As announced on 21 November 2016, Dacian Gold completed the MMGO Feasibility Study with key outcomes including:

  • An initial Ore Reserve of 18.6Mt @ 2.0 g/t Au for 1.2Moz at an AISC of A$1,039/oz comprising:
    • The Westralia Mine Area (Beresford and Allanson underground mines) initial Ore Reserve of 492,000oz;
    • The Jupiter Mine Area Ore Reserve of 643,000oz;
    • The combined mining complexes supported an initial mine life of 8 years, producing gold of 186,000oz per annum over the first 4 years.
  • Total capital cost for MMGO to reach its first gold milestone was A$200 million, comprising:
    • Infrastructure capital costs of A$172M including new:
      • 5Mtpa CIL treatment facility and tailings storage facility;
      • 410-person accommodation village;
      • construction of mine service facilities at the Westralia and Jupiter Mine Areas;
      • administration complex;
      • power reticulation;
      • establishment of raw water supply;
      • re-establishing haul and service roads; and
      • phone, data and radio communications.
    • Mine-establishment capital costs of A$48M at Beresford and Allanson underground mines and at Jupiter open pit.
  • Project Payback period of 21 months using A$1,600/oz gold price (US$1,200/oz).
  • Released simultaneously was the MMGO Expansion Pre-Feasibility Study (which incorporates the MMGO Feasibility Study) with key outcomes including:
    • Potential increase of the 1.2Moz MMGO Ore Reserve to 21.4Mt @ 2.4g/t Au for 1.7Moz;
    • Corresponding MMGO AISC improves to A$970-975/oz;
    • Westralia Mine Area increases to 938,000oz at an AISC of $A795-805/oz;
    • 73% of ounces considered in the expansion PFS is underpinned by the existing high confidence Ore Reserves;
    • Mine life extends to 9 years with first 7 years averaging 197,000oz of annual gold production; and
    • An additional capital expenditure of approximately A$3M.
  • A$150M Project Facility Agreement signed with Westpac, ANZ and BNP Paribas provided the necessary financial resources to construct the mine.
  • Gold production commenced in Q1 CY2018 with the mine set to produce between 180-210,000oz in its first full year of production during FY2019.