PERTH (miningweekly.com) – Gold developer Dacian Gold has struck agreements with fellow listed APA Group and Zenith Energy for a power solution at its Mt Morgans gold project, in Western Australia.
The company selected a natural gas and gas-fired power station as the preferred option to power the A$220-million Mt Morgans project.
Dacian has executed a gas transportation agreement with the APA Group, which will see the construction of a 4-km lateral from APA’s Eastern Goldfields pipeline, as well as associated above-ground infrastructure at the mine site.
The supply agreement will run for an initial ten-and-a-half years, with first gas transported in the first quarter of 2018 in order to meet the target of first gold production in March 2018.
Dacian will contribute A$4.5-million to the capital cost for the infrastructure, with the remaining capital and operating costs to be paid to APA through a transportation tariff.
The contract is worth a total of around A$57-million.
Dacian, meanwhile, also entered into a letter of intent with Zenith Energy to award a power purchase agreement for the building, ownership and operation of a 17 MW gas-fired power station, which will be constructed adjacent to the 2.5-million-tonne-a-year Mt Morgan carbon-in-leach (CIL) treatment facility.
Commissioning of the gas-fired power station is also scheduled for the first quarter of 2018, and all capital and operating costs for the power station infrastructure, and the ongoing supply of electricity will be paid to Zenith through an operating tariff over an eight-year contract term.
The Mt Morgans project is expected to produce some 186 000 oz of gold over the first four years of an eight-year mine life, based on a 2.5-million-tonne-a-year CIL operation.