Katanning Gold Project DFS Reveals 1.14Moz Production and A$355M Capital Need

A Definitive Step Forward for Katanning

Ausgold Limited (ASX – AUC) has released a comprehensive Definitive Feasibility Study (DFS) for its wholly owned Katanning Gold Project (KGP) in Western Australia, marking a pivotal milestone towards developing a substantial new open pit gold mine. The DFS outlines a 10-year mine life with an average annual production of 140,000 ounces in the first four years and total life-of-mine production of 1.14 million ounces.

The study confirms the project’s strong economic fundamentals, with a post-tax net present value (NPV5) of A$954 million and an internal rate of return (IRR) of 53% based on a conservative gold price of A$4,300 per ounce. At current spot prices near A$5,000 per ounce, the NPV rises to A$1.36 billion with an IRR of 68%, underscoring the project’s resilience to gold price fluctuations.

Financial and Operational Highlights

The DFS estimates a pre-production capital expenditure of A$355 million, including contingency, with a rapid payback period of just 13 months from first production. Operating costs are competitive, with an all-in sustaining cost (AISC) of A$2,265 per ounce over the life of the mine, and slightly lower at A$2,180 per ounce during the first four years when production peaks.

Underpinning these metrics is a robust Ore Reserve of 1.25 million ounces, predominantly in the Proved category, supporting a de-risked open pit mine plan. The project benefits from excellent infrastructure proximity, located near the regional hub of Katanning and within a manageable drive from Perth and other major centres.

Technical and Environmental Considerations

The DFS incorporates detailed mining, processing, and environmental studies. Mining will employ conventional open pit methods with selective excavation to minimize dilution and ore loss. The processing plant is designed for 3.6 million tonnes per annum throughput, utilizing proven gravity and carbon-in-leach technology to achieve an average gold recovery of 90.4%.

Environmental management plans include engineered waste rock dumps and a tailings storage facility lined with a geomembrane to prevent groundwater contamination. The power supply will be a hybrid system combining LNG, solar, and battery storage, with renewables expected to supply 42% of energy needs.

Path to Development

Ausgold is advancing towards a final investment decision targeted for mid-2026, with first gold production anticipated by the end of 2027. The company is actively progressing project financing, permitting, land access negotiations, and early engineering works. Ausgold has engaged Grant Samuel as debt advisor and has received positive feedback from financiers to date.

While the DFS outcomes are encouraging, Ausgold acknowledges risks including the need to secure approximately A$355 million in funding and to finalize land access agreements, some of which are subject to court hearings. The mine plan includes a small proportion of Inferred Resources with lower geological confidence, which could affect production targets.

Regional and Community Impact

The project is expected to generate significant regional benefits, including up to 350 full-time operational roles and 250 construction jobs. Ausgold is engaging with local councils and Traditional Owner groups to establish collaboration frameworks for heritage management, employment, and contracting opportunities, aiming to foster sustainable community partnerships.