Ausgold said that its wholly-owned Katanning Gold Project in Western Australia will require pre-production capital of A$355m ($231m), as per the findings of a definitive feasibility study (DFS).
The study was executed by Ausgold in collaboration with Minescope Services.
It confirms that the Katanning Gold Project is ready for development as a long-life open-pit gold project with a 13-month payback and substantial financial returns across varying forecasted gold prices.
Average annual gold production is projected to be 140,000oz in the first four years, supporting strong early cash flow and quick capital recovery.
The project’s base case indicates a post-tax NPV5 cashflow of A$950m ($620m) and an internal rate of return (IRR) of 53% at a gold price of A$4,300 per ounce. At the current spot price of approximately A$5,000 per ounce, these figures rise to A$1.36bn ($880m) and an IRR of 68%.
Ausgold executive chairman John Dorward said: “We are delighted with the outcomes of the DFS which clearly demonstrate the robust financial returns that will be generated by the KGP.
“The on-schedule completion of this high-quality study marks a critical milestone in Ausgold’s journey to becoming Australia’s next mid-tier gold producer. We are now turning our minds to the next phase of project development, including front-end engineering and design and debt financing, while we also progress activities to finalise land access and complete permitting for the project.”
The project comprises an ore reserve totalling 1.25 million ounces (with 84% in the Proved category), ensuring a life-of-mine production of 1.14 million ounces at an average gold recovery rate of 90.4%.
The estimated All-in Sustaining Cost (AISC) over the mine’s lifetime is A$2,265 per ounce ($1,472 per ounce), reducing slightly to A$2,180 per ounce ($1,417 per ounce) during the first four years.
Located near Katanning, the project is said to benefit from excellent roads and infrastructure and is accessible from Perth and other major regional centres such as Albany, Busselton, and Bunbury.
Ausgold has also announced an exploration programme in its surrounding regional tenement holdings aimed at extending the mine’s life.
The operation is expected to create local employment opportunities with a drive-in drive-out workforce peaking at approximately 350 full-time roles and a construction workforce reaching up to 250 full-time equivalent positions during the pre-production phase.
The next steps towards a final investment decision include ongoing environmental work such as permitting and compliance reporting, as well as progressing land access activities scheduled for hearings in August 2025. Additional efforts involve community engagement with local groups and early engineering works to facilitate equipment ordering.
