Mid-cap gold explorer Gascoyne Resources (ASX: GCY) has kicked off a key portion of any aspirational gold producer’s schedule: ore commissioning.
Gascoyne has updated the market with news that ore commissioning at its Dalgaranga gold project in Western Australia is now underway.
The project has a 2.5 million tonne per annum (Mtpa) processing plant already on site, as well as containing a JORC-compliant resource of 31.1Mt @ 1.3 g/t for 1,320,000 ounces of contained gold.
Overall, Gascoyne owns other gold prospects across WA such as Egerton, where previous drilling has hit high-grade intercepts as high as 71.7 g/t gold. At its other project in WA (Glenburgh), Gascoyne has posted a resource of 21.3Mt @ 1.5 g/t Au for 1.0 million oz gold). The company’s combined tally is around 2.3 million ounces of contained gold spread across two projects and several prospects with granted mining leases.
Importantly for Gascoyne, its resource figure just from Dalgaranga includes proved and probable ore reserves of 15.3 million tonnes at 1.3 g/t for a contained 612,000 ounces of gold. This figure was estimated following the company’s feasibility study completed in November 2016 although ongoing development and improving market conditions have led to Gascoyne aspiring for more from Dalgaranga.
Over the past 5 years, gold prices have traded in a broad range of $1,100-$1,400 per ounce and have received added impetus since December last year on the back of growing fears regarding ongoing Federal Reserve monetary policy that has weakened the US dollar, one of the largest factors that influences gold prices in both the spot and futures markets.
Focusing on Dalgaranga
The Dalgaranga Gold Project is located approximately 65km from Mt Magnet in the Murchison gold mining region of Western Australia and covers the majority of the Dalgaranga greenstone belt.
After discovery in the early 1990’s, the project was quickly developed to produce around 229,000 ounces of gold between 1996-2000, with reported cash costs of less than $350 per ounce.
To complete the necessary ore commissioning, Gascoyne has employed the services of GR Engineering (GRES) which has been tasked with completing all the outstanding requirements at the Dalgaranga processing plant.
Gascoyne says that the process plant is “effectively complete” with components being commissioned with ore and progressively tested up to their design capacities, adding that “first gold production expected in around 10 days”. If the commissioning programme is successful, it schedules Gascoyne’s first gold production for 18th May 2018.
Furthermore, the gold junior says that construction of the project has progressed ahead of the original schedule, and critically, “remains under budget”. To date, Gascoyne has commenced ore crushing, completed the necessary mechanical and electrical installations, as well as, finished the reagent storage area with “first reagent deliveries received”.
Today’s news of developmental progress at Dalgaranga helped Gascoyne shares tick up around 4% up to $0.54 per share, valuing the company at A$237 million by market capitalisation.