Ausgold said the updated mineral resource — comprising 89 million tonnes at 1.06g/t for 3.04 million ounces — reflected the significant endowment of the precious metal project 275km south-west of Perth.

Managing director Matthew Greentree said the result cemented the target as one of the most significant new multi-million ounce open-pit gold development projects in Australia.

“The further significant increase in contained ounces reflects the success of our targeted drilling programs in the past year and also delivers a substantial increase in measured and indicated resources to underpin the upcoming definitive feasibility study,” Mr Greentree said.

““The Katanning gold project is now moving rapidly towards development, and we are looking forward to delivering a number of significant milestones in the coming months as we further de-risk the project with the completion of the feasibility study and move ahead with permitting, financing and pre-development activities.”

Ausgold shares were up almost 6 per cent in early trade before paring gains to be 3 per cent higher at 3.5¢ at 10.25am.

More than 17,000m of drilling has been completed at the site since April last year, delivering a 13 per cent rise in forecast overall grade.

Ausgold said results to date supported a stand-alone open pit operation, with the majority of the resource reported 220m below the surface and further underground potential.

It said the resource remains open both at depth and along strike.