Dacian Gold is set to award an underground mining contract at the Mt Morgans gold project in Western Australia to RUC Cementation Mining.
Perth-based Dacian has issued RUC with a conditional letter of intent relating to the underground development and production stoping from the Beresford and Allanson underground mines, which together comprise the Westralia mine area at Mt Morgans.
RUC, a subsidiary of mining services group Murray and Roberts Holdings, is a WA-based mining contractor that specialises in underground mining and shaft-sinking.
The underground mining contract, which is expected to have an initial three-year term with two discretionary one-year extensions, will include development of a new portal for Beresford, rehabilitation of the existing Beresford portal and Allansford decline, decline and level development, ore driving, and stope production.
Dacian executive chairman Rohan Williams said the company was rapidly ticking the boxes on the path to becoming Australia’s next significant mid-tier gold producer.
“With a letter of intent issued last month to GR Engineering to build the new 2.5 million tonne per annum (Mtpa) treatment plant and now to experienced WA-based underground mining services group RUC Mining for the underground mining contract, we now have two of the key contracts in place which are required to bring Mt Morgans into gold production in less than 12 months,” Williams said.
“During the construction phase and initial mining phase at Mt Morgans we will maintain our aggressive exploration programs aimed at discovering new gold resources. As a result, we expect to be providing strong news flow over the coming months.”
Dacian completed a $110 million raising in February to help fund development of the project. In November 2016, the company reported the operation would cost $220 million to build, with production expected to start in 2018.
A feasibility study for Mt Morgans outlined initial ore reserves of 18.6Mtpa at two grams per tonne for 1.2 million ounces. Dacian forecasts an initial eight-year mine life with annual output of 186,000 ounces for the first four years.