Gascoyne readies for Dalgaranga start

20th March 2017 By: Esmarie Swanepoel - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – Gold developer Gascoyne Resources has signed a letter of intent (LoI) with engineering firm GR Engineering Services for an engineering, procurement and construction contract for a 2.5-million-tonne-a-year mineral processing plant at the Dalgaranga gold project, in Western Australia.

“Signing the LoI is an important step forward for the company as we move towards production. The feasibility study that we completed in November envisaged an engineering, procurement and construction management implementation strategy; however, this would have come at a cost risk,” said Gascoyne MD Mike Dunbar.

He told shareholders on Monday that the board decided to further derisk the Dalgaranga development by moving to a guaranteed maximum price (GMP) style of implementation.

“We are pleased to have signed the LoI with GR Engineering as it is widely considered as the benchmark in terms of GMP project delivery in Western Australia,” Dunbar said.

The award of the contract is subject to final board approvals, the receipt of statutory approvals, financing and the finalisation of terms and conditions for the contract.

Subject to the satisfaction of the conditions, the Dalgaranga project is scheduled to start ore commissioning in the second quarter of 2018.

A feasibility study for the Dalgaranga project has indicated potential to produce 592 000 oz over a six-year mine life. The project will require a capital investment of A$86-million, based on two opencut mines and a gravity and carbon-in-leach processing plant with a 2.5-million-tonne-a-year capacity.