Ausgold Limited (ASX:AUC) (Ausgold, or the Company) is pleased to announce the results of a scoping level study (the Scoping Study) which demonstrates the potential for a larger scale, 5 Mtpa throughput at the Katanning Gold Project (KGP or the Project). This increased throughput would be capable of delivering, on average, 136 koz pa over a ten-year life of mine (LOM) using the same mine plan determined in the KGP Prefeasibility Study (PFS) in August last year (ASX, 1 August 2022).
Underscores the Katanning Gold Project as the largest undeveloped, free-milling, open cut, gold project in Western Australia.
Study outcomes include:
- Projected average gold production of 155,000 oz pa over first six years and an average 136,000 oz pa over the 10-year Scoping Study evaluation period at average head grade of 1.05 g/t Au
- 30% increase in average annual gold production to PFS
- Lower strip ratio (W:O) of 4.1
- Increase of pre-tax project NPV5 to $819M by 63% when compared to PFS
- 20-month payback period, and a post-tax IRR of 46%, with a 10-year life of mine
- All-in Sustaining Cost (AISC) of $1,549 oz
- Pre-production capital cost of $297M, including 7% contingency
- Same PFS level Mineral Resources and Mine Plan at a lower cut-off grade 0.45g/t
Study is based on prices and costs updated from Q3 2022 PFS to current:
- A$2,750 gold price
- A$2,200 open pit optimisation
- 25% increase in mining costs
- 5% increase in capital and other operating costs
The 5 Mtpa throughput option from the Scoping Study indicated:
- LOM revenue of A$3.64 Bn
- LOM project EBITDA A$1.63 Bn
- LOM pre-tax free cashflow of A$1.14Bn
- LOM post-tax free cashflow of A$770 M
- Pre-production capital requirement of A$297 M
- Pre-tax NPV5 of A$819M
- Post-tax NPV5 of A$541M
- Post-tax internal rate of return (IRR) of 46%
- Payback period of 20 months
Commenting on the Scoping Study, Ausgold Managing Director, Matthew Greentree, said:
“Following the results of the 2022 PFS, this Scoping Study clearly indicates increased scale from the PFS level mine plan producing 163 k more ounces than the PFS over life of mine.
More importantly in the first six years, higher gold grades deliver an extra 174 koz from what was determined in the PFS. The LOM average production profile of over 136 koz pa delivers an early payback within the first 20 months, even with the additional capital required for a larger 5 Mtpa operation, which is estimated to be $297M. The 5 Mtpa scenario delivers a pre-tax NPV5 of A$819M, a post-tax NPV5 of A$541M and a post–tax IRR of 46% which strongly supports a debt-equity funding model.
This Scoping Study was undertaken to assess the optionality of the KGP while progressing the DFS. The Project demonstrates potential for further production scale and delivers a number of outcomes:
- High gold production and cash flow enables early payback of initial capital
- Location provides access to supporting infrastructure, work force and stable low cost energy with access to renewable sources from grid
- Large Resource delivers a long mine life and provides opportunities to further optimise production with consideration of different mining scenarios
- Updated Resource due in Q3 2023 will further expand current mine plan
Key Facts:
Ausgold is becoming the next Australian mid-tier Gold producer
About us:
About Ausgold
Ausgold Limited (ASX: AUC) is a gold exploration and development company based in Western Australia. The Company’s flagship project is the Katanning Gold Project, located 275km south-east of Perth and approximately 40km north-east of the wheatbelt town of Katanning.
Ausgold holds a dominant ground position in this relatively underexplored greenstone belt, an area prospective for Archean gold deposits. The current Resource at Katanning is 2.64 Moz gold.
Ausgold’s portfolio also includes the Doolgunna Station Cu-Au project and the Yamarna Ni-Cu-Co project in Western Australia and the Cracow Au Project in Queensland.
Contact details:
Elvis Jurcevic
Investor Relations
ej@irxadvisors.com
0408268271