Name of the Project
Mt Morgans gold project.

Location
The project is located in the Laverton gold district, in Western Australia.

Client
Dacian Gold.

Project Description
A feasibility study on the project has shown it to be technically and economically feasible, beginning with an initial ore reserve of 18.58-million tonnes grading 2 g/t gold for 1.2-million ounces over eight years.

The study proposes a large underground mining complex at Westralia, which comprises the Beresford and Allanson underground mines; and one large openpit at Jupiter. Both operations will feed a new 2.5-million-tonne-a-year carbon-in-leach (CIL) treatment facility to be built close to the Jupiter pit.

Infrastructure at the mine includes the CIL treatment facility, a 416-person accommodation village, construction of mine service facilities at the Westralia and Jupiter mine areas, an administration complex, power reticulation, the establishment of raw water supply, re-establishing haul and service roads, as well as phone, data and radio communications.

The 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 CIL operation.

A prefeasibility study on 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.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Project payback is estimated at 21 months using a gold price of A$1 600/oz.

Value
Infrastructure capital costs have been reduced from A$172-million to A$148.9-million.

Mine establishment costs are estimated at A$48-million.

Duration
The CIL plant is expected to be commissioned in the first quarter of 2018.

Latest Developments
Dacian Gold has cut A$23.1-million from the A$172-million infrastructure capital costs of its planned Mt Morgans gold project.

The company has executed the engineering, procurement and construction (EPC) contract for the Mt Morgans project with GR Engineering Services at a guaranteed maximum price of A$107.1-million.

Savings made on the EPC contract and other items have enabled Dacian to reduce the total estimated infrastructure capital cost for Mt Morgans to A$148.9-million.

With the EPC contract signed, Dacian will progress to finalise the terms of the underground mining contract with RUC Mining.

The EPC contract encompasses:
• the new 2.5-million-tonne-a-year CIL treatment facility;
• supporting infrastructure, including the tailings storage facility, the raw water supply infrastructure, workshops, offices;
• other infrastructure to support the Jupiter openpit; and
• the main administration complex and construction of a new section of haul road between the new treatment facility and the existing Jupiter haul road.

Additional infrastructure costs not included in the EPC contract will include the permanent accommodation village, the Westerlia mine service area, certain road works and civils, power supply and reticulation, and additional owners costs for an estimated A$36.6-million.

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.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
The project remains on track to be in production in the March quarter of 2018.

Contact Details for Project Information
Dacian Gold, tel +618 6323 9000, fax +61 8 6323 9099 or email .info@daciangold.com.au