Ausgold Limited (ASX: AUC) (“Ausgold”, the “Company”) is pleased announce the results of a Scoping Study for the Company’s 100% owned Katanning Gold Project (“KGP”, the “Project”), with key outcomes highlighting the potential of the Project to support a viable standalone gold mining and processing operation.
The Scoping Study incorporates a revised Mineral Resource Estimate of 33.9Mt at 1.10 g/t Au for 1.2 million ounces of gold, which includes recent drilling and a lower cut-off grade of 0.6 g/t. The lower cut-off grade is based on results from the current Scoping Study. The preliminary economics indicate the Project has positive financial metrics over an initial mine life of 7 years with capital payback early in the life of the project.
As a result of the positive outcome of the Scoping Study the Ausgold Board has approved the commencement of the further studies and metallurgical test work, as well as a new drilling program with the aim of expanding the current Resource with a focus on targeting high-grade mineralisation within the Central Zone.
Ausgold’s Managing Director, Matthew Greentree commented: “The Scoping Study is a huge step forward for the Katanning Gold Project highlighting as it does the potential for a standalone mining operation. The Scoping Study outlines a base case for a 1.25 Mtpa mining operation capable of producing over 350Koz over an initial 7-year mine life with an attractive payback period of less than two and half years. The Study has been completed to a high standard by an experienced team of independent Western Australian based consultants who have developed conservative operating parameters providing a high degree of confidence in study outcomes. This provides a realistic base case at an A$2,000 per oz gold price providing an attractive payback period of less than 2½ years, with these economics being significantly improved when current spot gold prices are considered. The project is located less than 300km from Perth and close to high-quality infrastructure which supports the near-term development of the project. The significant near Resource exploration potential, improves the economics of this project with a planned drill program to further enhance projects economics.”
“The Scoping Study highlights the potential for the development of a robust standalone gold operation and, as a result, the Ausgold Board has approved the commencement of further studies, metallurgical test work and new drilling programs with the aim of expanding the current Resource with a focus on targeting high-grade mineralisation to expand the current Resource within the Central Zone.”
Source: Ausgold Limited (ASX:AUC)