Dacian Gold is set to award the engineering, procurement and construction (EPC) contract for its Mt Morgans gold project in Western Australia to GR Engineering.
The gold developer has issued a letter of intent (LOI) to GR Engineering for the EPC of a 2.5 million tonne per annum mineral processing plant, as well as supporting infrastructure at the site 25 kilometres southwest of Laverton in WA’s Goldfields region.
Dacian last month raised $110 million to complete funding for Mt Morgans, keeping the project on track to start construction within weeks, the company said in an ASX statement.
It is expected that the EPC contract, likely to be in the form of a guaranteed maximum price (GMP), will be officially signed in mid-March following confirmation of its terms and conditions.
The Mt Morgans feasibility study estimated capital costs to build the project of $220 million, which included $172 million of infrastructure and $48 million of mine establishment costs for the underground Westralia mine area and the Jupiter open pit.
Dacian executive chairman Rohan Williams said by issuing the LOI to GR Engineering it also kept the company on track to deliver gold production at Mt Morgans in the first quarter of next year.
“We have enjoyed a long-standing relationship with GR engineering at Mt Morgans, which has included the metallurgical testwork and treatment plant design work for the Mt Morgans feasibility study, as well as previous EPC contracts with other organisations where some of our senior executives have been involved,” Williams said.
GR Engineering, a WA-based engineering consulting and contracting company, has already started an early works program, including final engineering drawings and procuring tenders.
The carbon-in-leach (CIL) treatment facility will be constructed close to the Jupiter open pit in the eastern half of the 640-square-kilometre Mt Morgans site. Ore will be sourced from two underground gold mines at the Westralia deposit.
In addition to the CIL treatment facility, the letter of intent covers EPC of 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.
GR Engineering managing director Geoff Jones said the LOI followed a long-term association with the Mt Morgans project and the Dacian team.
“The project award sits alongside GR Engineering’s proven capability and expertise in the process engineering, design and construction of gold processing facilities,” Jones said.
Dacian’s Mt Morgans feasibility study delivered ore reserves of 18.6 million tonnes at two grams of gold per tonne for 1.2 million ounces. The company is also continuing to make progress elsewhere at the project, including the recent start of exploration drilling at the site’s Cameron Well.