Ausgold (ASX: AUC) has announced positive results from its definitive feasibility study (DFS) for the Katanning gold project, marking what the company considers a critical step towards becoming a mid-tier gold producer in Australia. Ausgold is a mineral exploration and development company focused on gold projects in Western Australia. Its flagship project is the Katanning Gold Project.
The company believes the DFS confirms Katanning’s status as a development-ready, long-life gold project, projecting strong gold production and attractive financial returns over a 10-year mine life. Executive chair John Dorward stated that the DFS outcomes clearly demonstrate the robust financial returns Katanning is expected to generate. The company says the ore reserve de-risks its open pit mine plan, enabling it to expedite project financing and implementation.
The DFS, undertaken by Ausgold and Minescope Services, provides a comprehensive estimate of production, capital, and operating costs. It also provides 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 study estimates average annual gold production of 140,000 ounces for the first four years and 1.14 million ounces over the mine’s life.
The project forecasts a 13-month payback period from the start of production, with a post-tax cash flow of $1.37 billion and a 53% internal rate of return, based on a gold price of $4,300 per ounce. Ausgold is currently undertaking environmental work and progressing early engineering works. The company updated its mineral resource estimate for Katanning in September 2023, which now stands at 69Mt at 1.11 grams per tonne for 2.44Moz of contained gold.
