JOHANNESBURG (miningweekly.com) – Construction of the Dalgaranga gold project, in Western Australia, is on budget and ahead of schedule with first gold expected in May, ASX-listed gold exploration and development company Gascoyne Resources reported on Thursday.

Construction of the 2.5-million-ton-a-year Dalgaranga processing plant is progressing on schedule for wet ore commissioning and first gold in May. Site establishment is under way and the mining contractor is scheduled to start mining in early March, while the liquefied natural gas (LNG) generators are en route for delivery in March.

Design and engineering is complete and construction of the processing plant is well advanced with completion expected in around three months; a month ahead of schedule.

Concrete and civil works at the plant and installation of the carbon-in-leach tanks have been completed. The reagent storage area has also been completed with the final electrical and piping connections under way.

The water services area is nearing completion, including reverse osmosis treatment plant, fire system, raw and process water pumps. Electrical and instrument installation is almost complete with commissioning of this portion of the plant scheduled for late February.

Installation of the semi-autogenous grinding mill is well advanced, crusher and run-of-mine bin installation is under way and structural steel erection on site is nearing completion, said Gascoyne MD Michael Dunbar.

Mining contractor company NRW has commenced site establishment and mobilisation of the mining equipment. To date one of the excavators, a number of trucks and ancillary mobile equipment have been mobilised, and NRW is on schedule to commence mining in early March.

As part of the mining contract, NRW has purchased new truck trays that will increase the payloads of the trucks and improve efficiency. Many of these new trays have been fabricated and are scheduled to arrive on site in the next few weeks.

The company is also building a dedicated airstrip next to the 240-person Dalgaranga village, which will allow direct flights by March.

“The Zenith power station and the LNG fuel storage facility construction is on schedule. Construction of the engine hall and main power control room have progressed significantly in the past month,” added Dunbar.

The backup diesel generators have arrived in Perth and the Austrian gas engine manufacturer Jenbacher gas generators have been built and are en route to Australia with delivery to site scheduled for March, with commissioning in late April.

The LNG fuel storage tanks are currently being delivered to site and are expected to be filled and operational in mid-April in preparation for power station commissioning in late April and the process plant commissioning in May.

The Dalgaranga project has proved and probable ore reserves of 15.3-million tonnes at 1.3 g/t for 612 000 oz of gold.

The project is about 65 km by road north-west of Mt Magnet in the Murchison gold mining region. It covers the majority of the Dalgaranga greenstone belt.

After discovery in the early 1990s, from 1996 to 2000 the project produced 229 000 oz of gold with reported cash costs of less than $350/oz.

The project contains a measured, indicated and inferred resource of 31.1-million tonnes at 1.3 g/t gold for 1.32-million ounces of contained gold, with proved and probable ore reserves of 612 000 oz. The ore reserves are included in the mineral resource.

“The feasibility study that has been completed has highlighted a robust development case for the project,” said Dunbar.

The feasibility study investigated the development of two openpits feeding a 2.5-million-tonne-a-year processing facility resulting in production of around 100 000 oz a year for six years and concluded that the operation would be a low cost, high margin and long life operation with high operating margins.

Significant exploration potential also remains outside the known resources with numerous historical geochemical prospects only partly tested.