Dacian eyes mid-tier status
13th July 2018
Resources Rising Stars
Rohan Williams has signalled his intention for Dacian Gold to rapidly join the ranks of Australia’s mid-tier gold miners just three months after celebrating first production from its newly minted Mt Morgans project near Laverton (reports The West Australian).
Dacian announced plans to raise as much as $45 million to ramp up exploration beneath its existing Westralia mine and aggressively drill out its neighbouring Cameron Well prospect.
The accelerated exploration programs seek to increase the mine life and production rates at Westralia and unlock Cameron Well as a potential third mining centre at Mt Morgans.
Dacian will also spend $12 million to extinguish a one per cent capped production royalty and another tonnage-based royalty over its Jupiter open pit mine.
The raising will take the form of a $37 million placement with capacity to accept a further $3 million in oversubscriptions, along with a $5 million share purchase plan.
It is priced at $2.70, representing a 10 per cent discount to the company’s last traded price of $3.01.
The raising comes just days after Dacian announced it had achieved output guidance in its first full quarter of production at Mt Morgans. The company produced 34,155oz in the June quarter, comfortably within its 30,000oz to 40,000oz guidance range, and has issued a full-year 2019 forecast of 180,000oz to 210,000oz.
Dacian wants to establish Mt Morgans as a 200,000oz-plus a year gold producer with a mine life of more than 10 years. A run rate higher than 200,000ozpa would put Dacian alongside Ramelius Resources in terms of its production profile and not far behind Saracen Mineral Holdings.
Executive chairman Rohan Williams said the raising aimed to “fast-track the value realisation” at Mt Morgans by bringing forward discovery of new mineral resources, potentially new mines and higher production rates.
He said cancelling the Jupiter life-of-mine production royalty would allow the operations to generate more cash.
Dacian poured first gold from Mt Morgans in early April after completing the $200 million project on time and on budget. Ore is mined from the base of the historic Westralia pit, which comprises the Beresford and Allanson underground portals, and the Jupiter open pit mine and is processed through a new 2.5Mtpa carbon-in-leach plant built by GR Engineering.
Built on top of an historic gold field that has produced more than 1.3Moz since 1896, Mt Morgans has a 3.3Moz resource and 1.2Moz reserve. The project is expected to operate at all-in sustaining costs of about $1000/oz.
Image credit: The West Australian - Mogens Johansen
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