Ausgold Limited’s Definitive Feasibility Study for the Katanning Gold Project confirms a decade of strong gold production and robust financial returns, while regional exploration efforts continue to expand the growth pipeline.
- Katanning Gold Project DFS delivers A$0.95 billion post-tax NPV5 at A$4,300/oz gold price
- Average annual production of 140,000 ounces in first four years with 13-month capital payback
- Ore Reserve of 1.25 million ounces underpinning 10-year mine life at 90.4% recovery
- Aggressive regional drilling extends high-grade zones at Datatine, Zinger, and Stanley prospects
- Ausgold secures $35 million placement and advances permitting and financing towards 2026 FID
Definitive Feasibility Study Validates Katanning Gold Project
Ausgold Limited has marked a pivotal milestone with the completion of its Definitive Feasibility Study (DFS) for the 100%-owned Katanning Gold Project (KGP) in Western Australia. The study, delivered on time and on budget, outlines a robust 10-year open-pit gold mining operation with an average annual production of 140,000 ounces during the first four years. This early production profile supports strong cash flows and a rapid capital payback period of just 13 months, based on a gold price of A$4,300 per ounce.
Financially, the DFS projects a post-tax net present value (NPV5) of A$954 million and an internal rate of return (IRR) of 53%, underscoring the project's economic viability. At current spot gold prices near A$5,000 per ounce, the NPV5 rises to A$1.36 billion with an IRR of 68%, highlighting significant upside potential. The project is underpinned by a substantial Ore Reserve of 1.25 million ounces, with 84% classified as proved, and a life-of-mine gold recovery rate of 90.4%.
Strategic Location and Sustainable Operations
Located approximately 275 kilometers southeast of Perth, the KGP benefits from excellent infrastructure, including proximity to major regional centers such as Albany, Busselton, and Bunbury. The project’s design incorporates a hybrid power solution combining LNG, solar, and battery energy storage, aiming to deliver 42% renewable energy, aligning with modern sustainability standards.
The mine is expected to generate significant regional employment, with a peak workforce of around 350 full-time drive-in-drive-out roles during operations and approximately 250 jobs during the 18-month construction phase. Ausgold is actively engaging with local communities and Traditional Owner groups to foster collaboration on heritage management, training, and employment opportunities.
Exploration Success Fuels Growth Pipeline
Alongside the DFS, Ausgold has maintained an aggressive exploration program across the Katanning Greenstone Belt, which spans over 3,500 square kilometers. Recent drilling has extended high-grade gold mineralization at key prospects including Datatine, Zinger, and Stanley. Notably, down-plunge drilling at Datatine intercepted 6.6 meters at 3.40 grams per tonne gold, confirming continuity of high-grade shoots beyond existing resources.
At Zinger, wide and consistent mineralized zones were intersected, including 10 meters at 4.75 grams per tonne gold, reinforcing the prospect’s potential as a significant satellite deposit. The Stanley Gold Project also returned encouraging broad mineralized zones, supporting the company’s strategy to develop a regional production hub anchored by the KGP.
Advancing Permitting, Financing, and Development
Ausgold is progressing key workstreams towards a Final Investment Decision (FID) targeted for mid-2026, with first gold production anticipated by the end of 2027. Environmental permitting is underway, including referrals under the Environment Protection and Biodiversity Conservation Act, with state and federal agencies engaged in ongoing assessments.
On the financing front, the company has initiated a debt financing process with Grant Samuel as advisor and recently secured binding commitments for a $35 million placement to sophisticated investors, bolstering its cash position to over $12 million at quarter-end. Ausgold is also advancing front-end engineering and design (FEED) and early works to ensure timely procurement of long-lead items.
Expanding Regional Footprint via Strategic Farm-In
Further strengthening its regional presence, Ausgold signed a farm-in and joint venture agreement with Critica Ltd to acquire a majority interest in Exploration Licence E70/5077 adjacent to its Kulin Gold Project. This tenure hosts significant untested gold-in-soil anomalies, with trenching returning notable intercepts such as 31 meters at 1.0 gram per tonne gold, indicating promising exploration upside.
These regional initiatives complement Ausgold’s broader strategy to unlock the full potential of the Katanning Greenstone Belt, positioning the company as a future mid-tier gold producer in Western Australia.
Bottom Line?
With DFS validation and exploration momentum, Ausgold is poised to transform Katanning into a major gold producer, but permitting and financing remain critical next hurdles.
Questions in the middle?
- Will Ausgold secure timely environmental approvals to meet its mid-2026 Final Investment Decision target?
- How will ongoing exploration results at Datatine and Zinger influence the mine plan and resource upgrades?
- What financing terms will Ausgold secure for project development, and how might market conditions impact capital costs?