PERTH (miningweekly.com) – Gold developer Dacian Gold has selected its contractor for underground mining at its Mt Morgans gold project, in Western Australia, issuing RUC Cementation Mining – a subsidiary of JSE-listed Murray & Roberts (M&R) – with a letter of intent (LoI).
The conditional LoI will be replaced by a formal underground mining services contract following agreement on the final terms and conditions of the contract, and board approval, Dacian said on Thursday.
Dacian last month issued a LoI to GR Engineering to build the new 2.5-million-tonne-a-year treatment plant proposed for the Mt Morgans project, near Laverton, and a A$110-million fully underwritten equity raising to fund project construction.
“We are rapidly ticking the boxes on the path to becoming Australia’s next significant midtier gold producer,” said Dacian executive chairperson Rohan Williams.
M&R described the award of the three-year contract for underground mine development and production at Mt Morgans as a “major milestone” in RUC Cementation Mining’s transformation from mid-level to being recognised as a top-tier mining contractor.
The company added that the contract was awarded after an extensive competitive bid process.
The A$220-million Mt Morgan project is expected to deliver 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 carbon-in-leach operation.
A prefeasibility study into the expanded Westralia mine area has the potential to increase the mine life to nine years, with production in the first seven years expected to average 197 000 oz of gold.