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SPEARHEADING AUSTRALIA’S GOLD MINING RESURGENCE Dacian Gold is months away from becoming the next midtier gold producer, and its properties on the established Mt Morgans field could easily take it to world class Written by John O’Hanlon Produced by Josef Smith
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ount Morgans near Laverton in Western Australia has been a renowned centre for gold production since ore was first discovered there in 1896. Named after Alfred Edward Morgans, a Welsh investor who first developed the productive open pit Westralia mine, it had produced a million ounces of gold by 2011, by which time it was pretty much mined out, and in April that year the company that owned it threw in the
towel. By happy coincidence it was in the same year that Avoca Resources merged with Anatolia to form Alacer Gold, which now focuses its attention on the goldfields of Turkey. Avoca was a successful enterprise that started as a junior exploration company and grew via an IPO to become a leading gold producer on the ASX.
Following the merger and an 11-year journey Avoca’s CEO Rohan Williams says he felt ready for some time out, but that was
Rohan Williams Executive Chairman
Mr Williams is the founding director of Dacian Gold Ltd overseeing the $8M acquisition of the Mt Morgans Gold Project prior to the Company’s $20M exploration IPO in late 2012. He initially served as the Company’s Non-Executive Chairman, but became its Executive Chairman in early 2014. Since this time the Company has grown to a $400M market capitalisation and is presently focussed on the construction of the 200Kozpa Mt Morgans Gold Project ahead of initial gold production in March 2018. Prior to Dacian Gold, Mr Williams was the founding CEO and Managing Director of Avoca Resources Ltd, and led that company from its $7 million exploration IPO in 2002 until its merger with Anatolia Minerals in 2011 to form Alacer Gold Corp, which valued Avoca at $1 billion. At the time of the merger, Avoca Resources Ltd was the third largest ASX listed Australian gold producer. Mr Williams also serves on the Board of the Telethon Kids Institute.
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not to be – Mount Morgans came to his notice and enticed him to pursue a growing conviction that the project had potential. He raised $10 million (Australian) privately to buy the project outright from its administrators in January 2012. In November of the same year Dacian Gold listed on the ASX following an IPO that raised $20 million. “With that behind us we had three years to do a thorough exploration: if our theory was right we hoped to be able to build a mine,” says Williams. The success of Avoca, and the fact that much of the same team was involved at Dacian, helped sway the investors, he admits, and since the IPO the project has proceeded very much as well as he and his backers could possibly hope. In just two locations, below the old Westralia open pit and at a surface deposit just 10 miles away named Jupiter, the drill-out confirmed an ore base of 1.2 million ounces of gold at an average recovery cost of around A$1,000 per ounce. With Australian gold prices currently firming at close to $1,700 per ounce the mine,
which has been confirmed to have at least an eight-year lifespan, will break even well within two years. In the event Williams is very much more optimistic, and is holding himself in check when he claims to being well on the way to becoming a 200,000-ounce per year gold producer over a 10-year period, making Dacian Gold a significant new mid-tier Australian gold producer. “We did a feasibility study and that showed it was going to be an economic proposition and then it
WITH OUR $20 MILLION IPO BEHIND US WE HAD THREE YEARS TO DO A THOROUGH EXPLORATION: IF OUR THEORY WAS RIGHT WE HOPED TO BE ABLE TO BUILD A MINE w w w. d a c i a n g o l d . c o m . a u
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was a matter of raising finance and construction and in March next year we will have our first gold bars.� Striking gold
This first gold will come from the brand new 2.5 million tonne per annum carbon-in-leach (CIL) processing plant being built under an EPC contract by GR Engineering, which will also be responsible for building supporting infrastructure including a tailings storage facility; raw water supply infrastructure; workshops, offices and infrastructure to support the Jupiter open pit; an administration complex; and a new haul road. The processing plant is located
close to the Jupiter pit, where, later this year, run-of-mine ore will be trucked from the new underground mining complex being built by RUC Mining. The underground mining contract includes development of a new portal for Beresford, rehabilitation of the historic underground portal and Allanson decline; and level development, ore driving, and stope production. These are partners that Williams and his team know well, having worked with them at Avoca. Two separate mines are to be built to extract ore from the two main deposits at Westralia – Beresford and Allanson – with construction at the Beresford mine started in
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mid-May. “Our plan is to place around half a million tonnes of ore on the ROM pad so that when the processing plant is turned on in March 2018 it can go straight into full production. He adds that the processing plant will have a design life of at least 20 years, reflecting his confidence on the as yet unconfirmed future potential of the 520 square kilometre Mt Morgans project. Rohan Williams is a man who likes to back his gut instincts as a geologist with firm evidence. When he first looked at the site, the paucity of diamond drill cores at site once shocked him and gladdened his heart. “It was a great indicator to me
of how under-explored this project was. Westralia is a field that had produced over a million ounces of gold yet there was almost no diamond drilling completed at depth – without that the geologists could not really understand what controls the ore bodies.” Already Dacian has increased 20-fold the amount of hard evidence in terms of drill cores, he continues: “Exploration is one of the things we do well. We put effort, dollars and geological science into understanding the mineralisation as well as humanly possible. Diamond drilling is the only way to do that.” With that in mind the company raised an additional $20 million in its last raising for its continuing
WESTRALIA IS A FIELD THAT HAD PRODUCED
OVER A MILLION OUNCES OF GOLD YET THERE WAS ALMOST NO DIAMOND DRILLING
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exploration programme, he says. Many companies with a clear path to profitable production might be tempted to focus exclusively on construction, but not Dacian, which wants to still be bringing in new resources 20 years from now.
near-surface gold. Once all these results have been interpreted he intends to bring in the diamond drilling and reverse circulation (RC) rigs to confirm what he believes may well become a third major resource for the company. You only have to look at the area Expansion? that embraces Mt Morgans to feel It’s already been established that the buzz. Just outside lies the world Westralia is a large mineralised class Wallaby gold mine and within system extending over three a 25 kilometre radius there are many kilometres, and that the Jupiter other names to conjure with such deposit is also a big open pit at as the Sunrise Dam and Granny nearly two kilometres long. With Smith gold mines. “I can’t think of all systems go on developing another gold system in Australia these areas Williams is intent where there are that many twoon investigating a third potential million plus gold deposits. We are system on the property known as definitely in elephant country and Cameron Well, just nine kilometres it excites us.” That combination from the treatment plant. A 750-hole of enthusiasm, experience and reconnaissance drilling programme scientific rigour is what makes has just been completed using a Dacian a leading light in the combination of air-core and RAB resurgence of Australia’s gold mining (rotary air blast) drilling, showing industry after a period of recession. up encouraging quantities of
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