Dacian Gold has executed an engineering, procurement and construction (EPC) contract at the Mt Morgans gold project in Western Australia with GR Engineering.
The EPC contract, which follows the announcement of a letter of intent between the two companies last month, involves development of the Mt Morgans treatment facility and supporting infrastructure. It has a guaranteed maximum price of $107.1 million.
According to Dacian, the contract is for the EPC of a 2.5 million tonne per annum carbon-in-leach treatment facility. It also covers supporting infrastructure near the site’s Jupiter open pit, including the tailings storage facility, water supply infrastructure, workshops and offices, an administration complex, and construction of a haul road.
Dacian executive chairman Rohan Williams said the company secured a $23 million capital saving from the infrastructure costs estimated in last year’s Mt Morgans feasibility study with this contract.
“With the EPC contract now signed, we will move forward to finalise the terms of the underground mining contract with RUC Mining that we announced last week,” Willliams said.
“Activity levels are picking up on site as well as our exploration efforts at Cameron Well.”
Dacian will provide $5.2 million worth of accommodation, fuel and other owner’s expenses as part of the EPC contract, lifting the overall cost for construction of the treatment facility and associated infrastructure to $112.3 million.
Contract works are already under way, with completion and first gold production expected in first quarter 2018.
GR managing director Geoff Jones said entry into the contract provided certainty and supported a strong start to the 2018 financial year for the company.
“With site mobilisation imminent, we look forward to continuing our work with Dacian Gold to deliver safe and successful outcomes for the project,” Jones said.