PERTH (miningweekly.com) – The share price of ASX-listed gold miner Dacian Gold increased by nearly 22% on Wednesday following an updated life-of-mine (LoM) review for its Mt Morgans project, which underpinned a more-than-one-million-ounce production profile.
The updated LoM plan estimated an average annual production of 170 000 oz over the first five years of operation, at an all-in cost of between A$1 340/oz and A$1 440/oz, with total gold production over the eight-year mine life expected to reach 1.1-million ounces, at an all-in cost of A$1 280/oz to A$1 380/oz.
“This updated LoM review confirms the strong production and cash flow generation capacity of Mt Morgans over the next eight years. We have taken learnings from our first full year of production at Mt Morgans and applied it to the current ore reserves to deliver a high-margin gold production profile over the next eight years,” said Dacian executive chairperson Rohan Williams.
“With forecast gold production of over one-million ounces for the next eight years, based almost exclusively on ore reserves, and the all-in cost base of between A$1 280/oz and A$1 380/oz, which includes all capital, we are confident that the Mt Morgans operation will deliver strong margins and cash flow.”
Williams said that there was also opportunity to grow the forecast production base through the conversion of existing resources not used in the LoM, drilling out recently-announced discoveries at Morgans North, Basin Margin and elsewhere throughout the project area, which for the most part remains under-explored.
Dacian on Wednesday also said that for the 2020 financial year, Mt Morgans is expected to deliver between 150 000 oz and 170 000 oz of gold, at an all-in cost of between A$1 400/oz and A$1 500/oz.
Rohan said that following a concerted effort to rebuild operating momentum at the Westralia underground during the June quarter, the company anticipated a continued focus on accelerating planned development rates at the mine in the first half of 2020.
This will position Dacian favourably from the beginning of the second half of the 2020 financial year, with production weighted towards the second half of the year.
Dacian’s share price traded at a high of 67c a share on Wednesday, up from a low of 55.5c a share.