MT MORGANS OVERVIEW

Dacian Gold Limited (ASX:DCN) acquired the Mt Morgans project in early 2012, and after raising $20 million in an IPO, listed on the ASX in November 2012. The funds from the IPO raising financed a 3 years of exploration on the Mt Morgans Gold Project (MMGP).  In those three years the Company discovered over 1 million ounces of gold at each of the Westralia and Jupiter Prospects; at a discovery cost of less than A$7/ounce leading into a scoping study and then proceeding to the completion of a successful Feasibility Study.

As announced to the ASX on 21 November 2016, Dacian Gold completed the MMGP Feasibility Study with key outcomes including:

  • An initial Ore Reserve of 18.6Mt @ 2.0 g/t Au for 1.2Moz at an AISC of A$1,039/oz comprising:
    • The Westralia Mine Area (Beresford and Allanson underground mines) initial Ore Reserve of 492Koz at an AISC of A$837/oz over an initial 4 year period; and
    • The Jupiter Mine Area Ore Reserve of 643Koz from a 1.8km long open pit at an AISC of A$1,193/oz mined over an 8 year period;
  • Infrastructure capital costs of A$172M includes new:
    • 5Mtpa CIL treatment facility and tailings storage facility; 416-person accommodation village, construction of mine service facilities at the Westralia and Jupiter Mine Areas; administration complex, power reticulation, establishment of raw water supply; re-establishing haul and service roads; and phone, data and radio communications;
  • Mine-establishment capital costs of A$48M at Beresford and Allanson underground mines; and at Jupiter open pit;
  • Gold production to commence in Q1 CY2018;
  • Project Payback period of 21 months using A$1,600/oz gold price (US$1,200/oz); and

Completion of the MMGP expansion Pre-Feasibility Study (which incorporates the MMGP Feasibility Study) with key outcomes including:

  • Potential increase of the 1.2Moz MMGP Ore Reserve to 21.4Mt @ 2.4g/t Au for 1.7Moz;
  • Corresponding MMGP AISC improves to potentially A$970-975/oz;
  • Westralia Mine Area potentially increases to 938Koz at an AISC of $A795-805/oz;
  • 73% of ounces considered in the expansion PFS is underpinned by the existing high confidence Ore Reserves;
  • Mine life potentially extends to 9 years with first 7 years averaging 197Koz of annual gold production; and
  • An additional capital expenditure of approximately A$3M with no additional financing or material permitting requirements is assumed in the expansion PFS.

A $150M Project Facility Agreement signed with Westpac, ANZ and BNP Paribas.

COMPANY STRATEGY

The Company started 2016 with a 90,000m resource drill-out and completed the year with a maiden Ore Reserve of 1.2 million ounces of gold, a $150M project facility, a $26M share placement and the momentum to commence construction works at Mt Morgans early in 2017.  We remain on track to be Australia’s next mid-tier gold producer with production scheduled for Q1 in CY2018.

The Company is also very excited about what our exploration activities will deliver.  Dacian Gold will be focusing initially on increasing the Jupiter Ore Reserve where we have already seen numerous shallow, high grade drill results near the proposed open pit; and are we planning on a major infill drill program on the multi-kilometre Cameron Well near-surface drill anomaly.