Name of the Project
Dalgaranga gold project.

Location
The project is located in the Dalgaranga greenstone belt, in the Murchison province of Western Australia.

Client
Gascoyne Resources.

Project Description
The project contains an updated mineral resource of 31.1-million tonnes grading 1.3 g/t, and includes an updated proven and probable mineral reserve of 14.3-million tonnes grading 1.27 g/t. 

The updated mine plan excludes the Sly Fox mineral resource of 77 000 oz, which is expected to improve the production profile in years 3 and 4.

As a result of the updated mineral resource announced in March, the mine plan, design and schedule have been updated to align production with the increased throughput rate that modelling has shown to be achievable, while soft oxide and transitional ore will be processed in the early years.

The project comprises two opencut mines, a new conventional semiautogenous (SAG) milling circuit and a gravity and carbon-in-leach (CIL) processing plant with a throughput capacity of 2.5-million tonnes a year.

The processing plant will be located adjacent to the existing waste dump, to the east of the Gilbeys openpit, to minimise mine haulage costs.

The new mine design for the Gilbeys deposit has resulted in the Dalgaranga production target being increased to 15.3-million tonnes grading 1.3 g/t gold for 623 000 oz within the deposit, including the Gilbeys South and Golden Wings openpits.

As a result of the revised mine design and schedule, along with the increased throughput in the early years of the operation, a revised production target has been developed. The new production schedule will result in the project producing 244 000 oz in the first two years of operation, representing an increase of more than 35 000 oz in that time, compared with the feasibility study mine schedule, and is expected to improve project economics significantly.

The project has an initial mine life of six years.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of A$177-million and an internal rate of return of 65%, based on a A$1 600/oz gold price, with a payback of 18 months.

Value
Preproduction capital costs for the processing plant and associated infrastructure are estimated at A$86-million, including contingencies of $6.1-million.

Duration
Subject to conditions being met, the Dalgaranga project is scheduled to start ore commissioning in the second quarter of 2018.

Latest Developments
Construction of the Dalgaranga processing plant is progressing on schedule for wet ore commissioning and first gold in May. Site establishment is under way and the mining contractor is scheduled to start mining in early March, while the liquefied natural gas (LNG) generators are also en route for delivery in March.

Design and engineering are complete and construction of the processing plant is well advanced with completion expected in about three months – a month ahead of schedule.

Concrete and civil works at the plant and installation of the carbon-in-leach tanks have been completed. The reagent storage area has also been completed, with the final electrical and piping connections under way.

The water services area is nearing completion, including the reverse osmosis treatment plant, fire system, raw and process water pumps. Electrical and instrument installation is almost complete, with commissioning of this portion of the plant scheduled for late February.

Installation of the SAG mill is well advanced, crusher and run-of-mine bin installation is under way and structural steel erection on site is nearing completion.

Mining contractor company NRW has started site establishment and mobilisation of the mining equipment. To date, one of the excavators, a number of trucks and ancillary mobile equipment have been mobilized. NRW is on schedule to start mining in early March.

As part of the mining contract, NRW has bpught new truck trays that will increase the payloads of the trucks and improve efficiency. Many of these new trays have been fabricated and are scheduled to arrive on site in the next few weeks.

The company is also building a dedicated airstrip next to the 240-person Dalgaranga village, which will allow for direct flights by March.

“The Zenith power station and the LNG fuel storage facility construction is on schedule. Construction of the engine hall and main power control room have progressed significantly in the past month,” Gascoyne MD Michael Dunbar has said.

The backup diesel generators have arrived in Perth. Austrian gas engine manufacturer Jenbacher’s gas generators have been built and are en route to Australia, with delivery to site scheduled for March and commissioning in late April.

The LNG fuel storage tanks are being delivered to site and are expected to be filled and operational in mid-April in preparation for power station commissioning in late April and the process plant commissioning in May.

Key Contracts and Suppliers
GR Engineering (processing plant) and Zenith Energy (gas-fired power station).

On Budget and on Time?
Construction of the Dalgaranga gold project is on budget and ahead of schedule, with first gold expected in May.

Contact Details for Project Information
Gascogne Resources, tel +61 8 9481 3434, fax +61 8 9481 0411 or email admin@gascoyneresources.com.au.