Ausgold races to become a gold producer

Ausgold believes it’s on-track to become Australia’s next mid-tier gold producer having clinched a series of milestones in recent weeks.

After releasing assay results in mid-June that reaffirmed the potential for underground mining at the Katanning gold project, Ausgold delivered its definitive feasibility study on June 30.

This demonstrated the potential for 140,000 ounces (oz) per annum of gold production across Katanning’s first four years, with 1.14Moz expected to be produced over the life-of-mine.

Ausgold said this would deliver $1.37 billion of post-tax cashflow at a $4300/oz gold price. Katanning capital expenditure is expected to amount to $355 million, which is forecast to be paid back in 13 months at a $4300/oz gold price.

The company rode the momentum to then launch a $35 million raise (priced at $0.57 per share) to help accelerate Katanning towards a final investment decision and enable the purchase of long-lead items.

“The recent on-time and on-budget successful completion of the definitive feasibility study for the Katanning gold project was a major milestone on the road to Ausgold becoming Australia’s next mid-tier gold producer,” Ausgold executive chair John Dorward said.

“This new capital stands us in good stead to progress works in relation to our next goal of rapidly accelerating the development of the KGP (Katanning gold project) to a final investment decision and continuing to explore our extensive tenement holding.”

Ausgold said the placement was supported by a number of “highly credentialled” offshore and domestic institutional investors introduced as shareholders.

Non-executive director Paul Weedon subscribed to $100,000 of new shares, while Dorward subscribed to $50,000 through the raise.

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