Ausgold is backing potential to deliver a viable, standalone gold mining and processing operation at the Katanning gold project in Western Australia.
A scoping study at Katanning confirms a base case for a 1.25 million tonnes per annum mining operation, capable of producing over 350,000 ounces over an initial seven-year mine life, according to Ausgold managing director Matthew Greentree.
The study also uncovers opportunities to further optimise its project economics, including additional drilling in areas identified during the study and metallurgical test work to optimise the current gold recovery estimates.
“The scoping study is a huge step forward for the Katanning gold project highlighting as it does the potential for a standalone mining operation,” Greentree said.
“The significant near resource exploration potential, improves the economics of this project with a planned drill program to further enhance projects economics.”
This positive outcome has led the Ausgold board to approve the start of further studies and metallurgical test work, including the new drilling program.
This is aimed at expanding Katanning’s current resource, with a focus on targeting high-grade mineralisation within the Central Zone.
The metallurgical test work, meanwhile, could optimise Katanning’s current gold recovery estimates, throughput and plant performance, and reduce operating costs.
Ausgold estimated a payback period of less than 2.5 years at Katanning, with a base case of $2000 an ounce gold price.
The company has also revised the resource estimate for Katanning, which is now standing at 33.9 million tonnes at 1.10 grams per tonne of gold for 1.2 million ounces.
The Katanning project is less than 300 kilometres from Perth and is close to infrastructure, supporting the near-term development of the project.