Western Australian explorer Dacian Gold has suspended mining at its Mt Morgans operation located in Laverton, with Leigh Junk stepping down as managing director.
The company stated the rapid change of the operating environment over the past six months had seen significant inflationary cost pressures which resulted in an increase in cost base, prompting a review of the operating strategy.
Open pit mining operations are to be suspended by the end of June, with underground operations to continue until the previously developed stopes have been mined in Q1, FY23.
Open pit mining at the nearby Hub at Redcliffe, acquired last year, will commence later in FY23 when mining approvals are received.
Processing of existing stockpiles totalling about five million tonnes will kick off in Q1, FY23. This will allow Dacian to continue milling operations during FY23 while it pivots towards exploration and development under a new leaner operating model that reduces its cost base with the expectation mining operations will recommence in the future.
The company forecasts cash and gold-on-hand of approximately $17 million at June 30, after the $12.75 million bank debt repayment.
Mt Morgans has a large operating processing facility with significant replacement value in today’s high cost environment, substantial existing stockpiles, an expanded suite of development projects, an attractive land position with numerous, compelling drill targets, a multi-million ounce resource base which is substantially debt-free.
Dacian’s geology and exploration manager Dale Richards will take over as chief executive officer.