Photo by: Bloomberg
PERTH (miningweekly.com) – Gold miner Dacian Gold on Friday announced plans to suspend openpit mining operations at the Jupiter deposit, at its Mt Morgans mine, in Western Australia, while also announcing the resignation of MD Leigh Junk.
Dacian told shareholders that the rapid change of the operating environment over the past six months had seen significant inflationary cost pressures which resulted in an increase in cost base, prompting a review of the operating strategy.
The company has now decided to suspend openpit mining at Jupiter by the end of June 2022, but will continue with underground operations until the previously developed stopes have been mined in the first quarter of 2023.
Openpit mining at the Hub and Redcliffe deposits will start later in 2023, when mining approvals have been received.
In the meantime, processing of the existing nearly five-million tonnes of stockpiles will start in the first quarter of next year, while drilling will continue at Jupiter.
The company told shareholders that during the continued milling operations in 2023, Dacian would pivot towards exploration and development under a new, leaner operating model that would reduce its cost base with the expectation that mining operations would restart in the future.
“In light of the current high inflationary environment, the board has taken the decision to reset the company strategy by discontinuing the current openpit mining operations at Mt Morgans. In doing so we are pivoting to exploration and a focus on the significant potential we see beneath and alongside the Jupiter openpits. This, along with the strategic value of our processing facilities and infrastructure in the Laverton Leanora gold belt, underpins the company,” said nonexecutive chairperson Mick Wilkes.
To facilitate the change in strategic direction, GM for geology and exploration, Dale Richards, has been appointed as CEO, with Junk handing in his resignation.
“On behalf of the board I would like to thank Junk for his significant contribution to the company over the past three years and wish him well for the future. I would also like to welcome Richards as the incoming CEO and look forward to working closely with him to unlock the potential of the Mt Morgans operation,” said Wilkes.
Dacian produced 23 608 oz of gold in the March quarter from the Mt Morgans operations, at an all-in sustaining cost (AISC) of A$2 008/oz. For the June quarter, production had been estimated at between 37 000 oz and 40 000 oz, while full-year production had been targeted at between 93 000 oz and 97 000 oz, at an AISC of between A$1 850/oz and A$1 950/oz.