Ausgold Clears Path for Katanning DFS Re-Optimisation with Strategic Land Acquisition

Ausgold (ASX: AUC) has struck a breakthrough land deal that clears a long-running legal hurdle and paves the way for the full development of its Katanning gold project in Western Australia.

The company has agreed to acquire 860 hectares of freehold land covering a significant portion of the project’s mineral resource, resolving disputes that have been limiting the project’s development since 2023.

The agreement will also allow Ausgold to re-optimise its definitive feasibility study (DFS) and commence new exploration drilling across highly prospective ground.

Land Acquisition Breakthrough

Ausgold has signed a binding agreement with unrelated parties to acquire the freehold land, which includes 212 hectares of its existing Mining Licence ML70/211.

This land hosts a material proportion of the Katanning gold project’s mineral resource and mineable ounces, which had previously been excluded from DFS mine planning due to tenure constraints.

The acquisition also removes the need for two legal actions lodged in 2023 – which have now been discontinued – eliminating a major uncertainty over the project’s development path.

The newly consolidated tenure also delivers Ausgold unimpeded control over infrastructure corridors, mine scheduling, and waste dump positioning.

Executive chair John Dorward said the acquisition was “the key de-risking event for Katanning” that will allow the company to finally unlock the project’s full potential.

DFS Re-Optimisation

With the expanded tenure secured, Ausgold will now update its June 2025 DFS to incorporate the newly acquired land and optimise mine planning.

The revised plan will seek to add additional life-of-mine production from previously excluded Central Zone resources while also reducing mining costs by relocating waste dumps to more efficient locations, which Ausgold expects to enable higher annual throughput and improved cash flow metrics compared with the June study.

The vendors must vacate the land by February 2027, ensuring clear access ahead of planned mining activities.

Mr Dorward said the update would provide “material enhancements” to the DFS and help attract financing partners for the build.

Exploration Access Restored

For the first time in years, Ausgold will be able to drill previously inaccessible parts of the Central Zone and White Dam lodes.

The company plans to launch a multi-rig program this year to test down-plunge extensions of high-grade ore shoots and follow up on earlier intercepts such as 16 metres at 19.25 grams per tonne and 7m at 10.94g/t gold.

These areas are considered critical to adding higher-margin ounces that can be mined early in the production schedule.

The restored access also opens up new surface positions for infrastructure such as haul roads and laydown areas, simplifying development logistics.

Mr Dorward said exploration success on the new ground would “further solidify Katanning as one of the most significant emerging gold districts in the state.”

Financing and Terms

Total consideration for the land package is $35 million, comprising $15m payable this month and $20m due by August 2026 or at final investment decision, whichever comes first.

Ausgold reported $45m in cash at the end of July, providing funding capacity to meet the first payment, and the company said it remains in active discussions with financiers to structure the deferred component in line with project funding requirements.

The purchase includes relocation compensation for four families currently residing on the property, with access granted immediately for exploration and studies.

Ausgold said the terms balance the needs of all stakeholders while ensuring it can sustain the current momentum at Katanning.

Infrastructure and Development

The land acquisition follows Ausgold’s August development update, which detailed progress on infrastructure planning and water supply agreements for Katanning.

The company secured access to a borefield 5km south of the project area, with testing underway to confirm adequate water flow rates for operations.

It also acquired a 348-hectare farm near the processing plant site for $1.5m, providing options for future tailings capacity and supporting mine life extensions beyond the DFS.

These steps add flexibility to project design while supporting a pathway to further expansion if exploration delivers additional ounces.

The combination of land access, water security, and planning progress provides a clear foundation for the project’s construction phase.

Full Steam Ahead

Ausgold will now focus on launching its new drilling campaign, updating its DFS, and advancing approvals to position Katanning for development.

The company described the agreement as “transformative”, noting that it can now incorporate the significant gold endowment artificially excluded from previous planning into future mine schedules.

Work will also continue on hydrogeology, engineering, and permitting to ensure project readiness ahead of final investment decision.

With the land secured, Ausgold has moved closer to realising the full potential of one of Western Australia’s most promising undeveloped gold projects.