Ausgold delivers robust DFS with 1.14Moz over a 10-year mine life for Katanning gold project

Ausgold (ASX: AUC) says the positive results of its definitive feasibility study (DFS) for the Katanning gold project are a critical milestone in its journey to becoming Australia’s next mid-tier gold producer.

The company believe the DFS results reinforce Katanning’s status as a development-ready, long-life gold project with a fast payback period across a range of forecast gold prices.

It also sees the study as confirmation of the project’s potential for strong gold production and excellent financial returns over a 10-year mine life.

‘Robust financial returns’

“We are delighted with the outcomes of the DFS which clearly demonstrate the robust financial returns Katanning will generate,” executive chair John Dorward said.

Katanning’s ore reserve de-risks the company’s open pit mine plan, allowing it to accelerate project financing and implementation.

“We are now turning our minds to the next phase of project development, including front-end engineering and design and debt financing, while we also progress activities to finalise land access and complete permitting for the project,” Mr Dorward said.

Comprehensive cost estimate

Undertaken by an integrated Ausgold and Minescope Services project delivery team, the DFS has provided a comprehensive estimate of production, capital and operating costs.

It has also provided the company with a detailed schedule for the engineering, procurement, construction, commissioning and ramp-up of a 3.6-million-tonnes-per-annum gold mining and processing facility at Katanning.

The DFS estimated the project has the capacity for average annual gold production of 140,000 ounces per annum in the first four years and 1.14Moz over the full life-of-mine.

It also forecast payback of 13 months from first production, with a post-tax cash flow of $1.37 billion and a 53% internal rate of return at a gold price of $4,300/oz.

Range of workstreams

Ausgold is currently undertaking a range of workstreams including ongoing environmental work made up of permitting, monitoring and compliance reporting, in preparation for making a final investment decision.

The company is also progressing early engineering works to allow ordering of long lead-time equipment.

In the meantime, it has updated a September 2023 mineral resource estimate for Katanning, which now stands at 69Mt at 1.11 grams per tonne for 2.44Moz of contained gold.