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 provided an update on the Mt Morgans gold project.

Construction of the CIL treatment plant is more than 90% complete and is on schedule and on budget.

The high-pressure gas pipeline, which connects the Eastern Goldfields pipeline to the gas-receiving infrastructure being constructed at the Mt Morgans power station, has been installed.

Underground mining at Beresford and Allanson is now 873 m ahead of the feasibility study mining schedule, with ore intersected on five separate levels at Beresford and ore development having started on several levels.

Mining has started at Dacian’s second mining centre, the Jupiter openpit, with the first blast at Heffernan’s Hill occurring on December 29, 2017.

More than 40 km of grade control drilling has been completed with 563 surface reverse circulation (RC) holes for more than 15.5 km at Jupiter, and 224 underground diamond drill holes for more than 26.5 km completed at Beresford.

Recruitment of operational personnel is progressing well. All 37 positions at the treatment plant, including maintenance personnel, have been filled. Some of these positions have been filled by members of the nearby Mt Margaret community.

RC resource drilling for the oxide mineralisation at Cameron Well is almost complete, with the first results to be released to the market in the coming weeks.

Three diamond drill rigs operating at Westralia are infill-drilling the lower inferred mineral resource to upgrade it to indicated mineral resource and are starting deeper resource-addition drilling.

Numerous service and supply contracts are in place, with remaining contracts, including the air charter service, certain plant consumables (grinding media, activated carbon and reagents) and gas supply, to be finalised within weeks.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Construction at Mt Morgans is on time and within budget, ensuring that the company remains firmly on track to start production from March next year.

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