JOHANNESBURG (miningweekly.com) – Gold developer Gascoyne Resources has selected remote power generation specialist Zenith Energy to build, own and operate (BOO) a 15 MW gas-fired power station at the Dalgaranga gold project in Western Australia.
The companies have executed a power purchase agreement (PPA), in terms of which supply will start late in the second quarter of 2018, under an initial six-year term, which can be extended for a further four years.
The Dalgaranga project, in the Murchison goldfield, is currently in the construction phase and Gascoyne confirmed earlier in the week that it would produce its first gold in the second quarter of next year.
Gascoyne MD Mike Dunbar said on Friday that the choice of gas-fuelled generators considerably de-risked the project as it reduced input costs and lowered the company's exposure to any future escalation in the diesel price for power generation.
Zenith Energy, which is listed on the ASX, said that the PPA should have a positive impact on its earnings in the 2018 financial year and should have a materially positive impact in the 2019 financial year.
The new capacity at the Dalgaranga project, together with several recent new projects, will see Zeneth’s BOO capacity grow from about 110 MW to more than 125 MW of installed capacity at completion of construction.
Last week, Zenith was selected as preferred bidder for a 62 MW power station at Newmont Mining’s Tamani gold mine, in the Tamani desert of Northern Territory.