Dacian’s Mt Morgans gives up first ore before schedule

13th October 2017
Resources Rising Stars

Dacian Gold’s Mt Morgans gold project near Laverton is running almost a month ahead of schedule after its Beresford underground development hit ore for the first time last week, reports The West Australian.

Rohan Williams-led Dacian — which has a seven-year life-of-mine ahead of it at Mt Morgans and is expecting to generate more than 200,000 ounces of gold a year — says it is tracking ahead of time in its bid to become a gold producer by early next year.

By the end of last month, 1837m of underground development at the Beresford had been completed by contractor RUC Mining, 328m better than expectations, with gold-bearing ore only expected to be struck by November 5.

Mining is expected to begin this month at the adjacent Allanson underground mine at Westralia, a zone which includes about half of Dacian’s 3.3Moz Mt Morgans resource.

RBC Capital Markets analyst Paul Hissey, who initiated coverage on $420 million-capped Dacian last month with an outperform rating and $3-a-share price target, said the news Mt Morgans was tracking ahead of schedule gave confidence it would hit its target as a low-cost development.

“As the project progresses through the development stages to first production — and full ramp-up — we expect any overhanging discount in the stock to unwind,” he wrote in a research note.

“We believe Dacian continues to provide valuation upside, with Mt Morgans a low-capex, low-cost development with proximate exploration upside.”

Zenith Energy also confirmed this morning that it had struck a deal with Dacian to build, own and operate a 17MW gas-fired power station at Mt Morgans as well as an eight-year power purchase agreement with extension options starting from March next year. The power station will use gas from APA’s existing Eastern Goldfields Gas Pipeline.

Dacian’s Mt Morgans exploration efforts, centred on the new Cameron Well prospect, will be closely watched not just by the market, but by neighbouring junior Syndicated Metals.

It is poised to begin a 11,000m aircore drill drive at its nearby Monument Gold Project this month centred on its Korong and Korong East prospects, where the explorer identified a “significant” gold target in geological settings similar to Dacian’s 1.4Moz Jupiter deposit and Gold Fields’ 7.5Moz Wallaby mine.

Located alongside a 3km by 1.5km felsic intrusion, Korong East will receive some of the love along with targets between the Old Copper and Korong targets in first pass drilling.


Image: Rohan Williams, via The Australian

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