JOHANNESBURG (miningweekly.com) – ASX-listed GR Engineering Services (GRES) has entered into a conditional letter of intent (LoI) for an engineering, procurement and construction (EPC) contract at Dacian Gold’s Mount Morgans gold project, near Laverton, Western Australia.
Under the terms of the LoI, GRES will design, build and commission a 2.5-million-tonne-a-year carbon-in-leach treatment facility near the Jupiter openpit in the eastern half of the 640 km2 Mount Morgans project area.
Ore will also be sourced from two new high-grade underground gold mines at Westralia, located 15 km west of the site of the new treatment facility.
GRES will also be responsible for the supporting infrastructure for the project, including the tailings storage facility, the raw water supply infrastructure, workshops, offices and other infrastructure to support the Jupiter openpit, a main administration complex and the construction of a new section of haul road between the new treatment facility and the existing Jupiter haul road.
While the EPC contract is expected to be entered into by mid-March, GRES has already started an early works programme, focusing on the completion of final engineering drawings, procuring tenders and placing orders for certain critical items ahead of the signing of the final EPC contract.
The project schedule will facilitate completion and first gold production in the first quarter of 2018. It is intended that the contract be entered into on a guaranteed maximum price basis.
Dacian chairperson Rohan Williams said this marked another significant milestone in the company’s journey towards becoming a significant midtier gold producer.
“This follows hard on the heels of the recently announced fully underwritten A$110-million equity raising that now completes the financing required for the construction of [Mount Morgans], ensuring that we remain on track to achieve our timetable of delivering first gold production in the first quarter of next year,” he said.
Williams added that the GRES team knows the Mount Morgans project well, noting that the company had a strong understanding of Dacian’s culture and aims.
“We continue to make strong progress at Mount Morgans on numerous other fronts, including the recent start of exploration drilling at Cameron Well with two rigs. This should ensure that we can deliver strong news flow over the coming months from both project development activities and organic exploration and growth initiatives – a great combination for any emerging gold company.”