PERTH (miningweekly.com) – ASX-listed Ausgold will pursue a larger five-million-tonne-a-year operation at its Katanning gold project, in Western Australia.
The junior company on Monday released the results of a scoping study into the enlarged project, which resulted in a 30% increase in average yearly gold production compared with the 2022 prefeasibility study (PFS).
The PFS envisaged a three-million-tonne-a-year operation recovering 1.16-million ounces of gold over an 11-year mine life at a rate of 105 000 oz/y. The PFS estimated a pre-production capital cost of A$225-million, a pre-tax net present value of A$515-million and an internal rate of return of 41%, with life-of-mine earnings before interest, taxes, depreciation and amortisation (Ebitda) estimated at A$981-million.
Ausgold on Monday told shareholders that the enlarged scoping study estimated a mine life of just under ten years, with Katanning expected to produce 1.32-million ounces over the mine life, at a rate of 136 000 oz/y.
The enlarged project will require a capital injection of A$297-million, have a pre-tax net present value of A$819-million and an internal rate of return of 46%, with the LoM Ebitda estimated at A$1.62-billion.
Ausgold MD Matthew Greentree told shareholders that the LoM average production profile of the enlarged operation delivered an early payback within the first 20 months, even with the additional capital required for the larger operation.
A definitive feasibility study on the expanded project is due for completion in the fourth quarter of this year, and a resource upgrade is planned for early in the third quarter.