Ausgold Delivers 1.28 Million Ounces Maiden Ore Reserve at Katanning

THE DRILL SERGEANT: Ausgold (ASX: AUC) reported a maiden Ore Reserve by way of a completed Prefeasibility Study (PFS) for the company’s 100 per cent-owned Katanning gold project in the south-east of Western Australia.

Ausgold said the PFS had confirmed a 1.28 million ounce Maiden Ore Reserve at the Katanning gold project while highlighting the project as one of the largest undeveloped free-milling open cut gold projects in Western Australia, with low capital costs and substantial scope to increase the total scale of this project in the near term.

“Ausgold is now positioned firmly on the path to becoming Australia’s next mid-tier gold producer with the Katanning Gold Project delivering a large 1.28 Million Ounce Ore Reserve with excellent financial metrics demonstrating low cost, low technical risk, and a high-margin operation,” Ausgold managing director Matthew Greentree said in the company’s ASX announcement.

“High-grade ores identified early in the mining schedule deliver, over the first six production years, 126,000 ounces of gold on average per year and help to generate $555 million of after tax free cashflow to the project over this period.

“This early cashflow generation facilitates an early payback of the estimated $225 million of pre-production capital after 21 months, sets up an impressive IRR of 40.7 per cent and supports a debt-equity funding model.

“This initial Ore Reserve confirms the company’s robust understanding of the Katanning gold deposit and further supports our thesis that this represents the foundation of an excellent mine operation with clear upside potential.”