Name of the Project
Mt Morgans gold project.

Location
The project is located in the Laverton gold district, in Western Australia.

Client
Dacian Gold.

Project Description
A feasibility study on the project has shown it to be technically and economically feasible, beginning with an initial ore reserve of 18.58-million tonnes grading 2 g/t gold for 1.2-million ounces over eight years.

The study proposes a large underground mining complex at Westralia, which comprises the Beresford and Allanson underground mines; and one large openpit at Jupiter. Both operations will feed a new 2.5-million-tonne-a-year carbon-in-leach (CIL) treatment facility to be built close to the Jupiter pit.

Infrastructure at the mine includes the CIL treatment facility, a 416-person accommodation village, construction of mine service facilities at the Westralia and Jupiter mine areas, an administration complex, power reticulation, the establishment of raw water supply, re-establishing haul and service roads, as well as phone, data and radio communications.

The project is expected to deliver 186 000 oz of gold over the first four years of an eight-year mine life, based on a 2.5-million-tonne-a-year CIL operation.

A prefeasibility study on the expanded Westralia mine area has the potential to increase the mine life to nine years, with production in the first seven years expected to average 197 000 oz of gold.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Project payback is estimated at 21 months using a gold price of A$1 600/oz.

Value
Infrastructure capital costs have been reduced from A$172-million to A$148.9-million.

Mine establishment costs are estimated at A$48-million.

Duration
The CIL plant is expected to be commissioned in the first quarter of 2018.

Latest Developments
Dacian Gold has awarded the final material contract required for the Mt Morgans mine to start production.

The company has awarded the mining contract for the Jupiter openpit to Macmahon Contractors, which will start mining operations at the Heffernans Hill area this month. First gold production and cash flow are expected to follow within 17 weeks.

Executive chairperson Rohan Williams has said that project construction is progressing rapidly. The CIL treatment plant is more than 75% complete, underground mining is 743 m ahead of schedule and eight drilling rigs are on site.

The openpit mining contract will have an initial term of 60 months and three option periods extending over an additional 31 months, representing the current scheduled life of the pit, which has a maiden ore reserve of 14.8-million tonnes at 1.4 g/t gold for 643 000 oz.

First ore at Mt Morgans was mined at the Beresford underground mine, where mining operations started in mid-May.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Construction at Mt Morgans is on time and within budget, ensuring that the company remains firmly on track to start production from March next year.

Contact Details for Project Information
Dacian Gold, tel +618 6323 9000, fax +61 8 6323 9099 or email .info@daciangold.com.au