Dacian Gold selects natural gas for Mt Morgans project

Dacian Gold has chosen to use a natural gas and a gas-fired power station to generate electricity at its Mount Morgans gold project in Western Australia.

The project,  located south west of Laverton, has an estimated initial mine life of eight years, with an annual output of 186,000 ounces of gold for the first four years.

Dacian signed a gas transportation agreement (GTA) with energy infrastructure business APA Group which includes the construction of a 4km lateral from its Eastern Goldfields Pipeline to the project’s power station.

Under the GTA, gas will be transported to the power station in the first quarter of 2018, to meet the company’s goal of first gold production by March 2018.

The 4km gas lateral, called the Mt Morgans gas pipeline, will connect to a barred-tee installed into the Eastern Goldfields pipeline that passes through the project.

APA has begun work programs on the design and engineering of the pipeline and associated infrastructure, geotechnical studies and ordering long-lead items.

The GTA is for up to 10 years and is worth around $75 million.

APA managing director Mick McCormack said Dacian will be the fourth company to connect to its ‘Goldfields Grid’ since the commissioning of the Eastern Goldfields pipeline in 2015.

“Gas will travel approximately 1,200km across four APA pipelines – the Goldfields gas pipeline, the Murrin Murrin lateral, the Eastern Goldfields pipeline and the new lateral,” he said.

Dacian Gold has also entered a letter of intent to award a Power Purchase Agreement with Zenith Energy for the building, ownership and operation (BOO) of a 17MW gas fired power station to be constructed next to the project’s new 2.5Mtpa carbon in lead (CIL) treatment facility.

The power station will incorporate gas generators to provide the Mt Morgans clean, gas fuelled power generation.

Work has commenced on engineering and design, and ordering of gas generators, buildings, control panels.

Dacian also added that commencement of civil works for the power station is “imminent”.

“Zenith Energy managing director Hamish Moffat said, “We are very pleased to have been selected by Dacian and look forward to working with the Dacian team to deliver a world class supply solution to the Mt Morgans project for many years to come.”

Commissioning of the gas fired power station is set for the first quarter of 2018.

Dacian expects to finalise a supply contract with a gas provider during the fourth quarter of 2017.