Land Access Secured but Execution Risks Remain for Ausgold’s Katanning Mine
Ausgold Limited’s latest Definitive Feasibility Study update for the Katanning Gold Project confirms a robust, low-risk operation with strong economics and a decade-long production horizon. The company has cleared key land access hurdles and launched an extensive drilling campaign to underpin future growth.
- Katanning Gold Project DFS update confirms 1.33Moz Ore Reserve and 2.44Moz Mineral Resource
- Post-tax NPV of A$1.03 billion and IRR of 52.4% at A$4,300/oz gold price
- Initial production targeted for late 2027 with a rapid 17-month payback period
- Significant land acquisition resolves previous access issues, enabling expanded mining
- 44,000m drilling program underway to extend resource and de-risk project
A Definitive Step Forward for Katanning
Ausgold Limited has released a comprehensive update to its Definitive Feasibility Study (DFS) for the Katanning Gold Project (KGP) in Western Australia, marking a significant milestone in advancing the project toward production. The update confirms a robust, low-risk open-pit gold mine with a projected life exceeding ten years, underpinned by a 1.33 million ounce Ore Reserve and a broader 2.44 million ounce Mineral Resource.
Key economic metrics stand out – at a gold price of A$4,300 per ounce, the project delivers a post-tax net present value (NPV) of A$1.03 billion and an internal rate of return (IRR) of 52.4%, with a rapid payback period of just 17 months following first production. These figures highlight the strong financial viability of the KGP, positioning it as a compelling addition to Australia’s gold mining landscape.
Clearing Land Access and Unlocking Potential
One of the most notable developments is the resolution of a long-standing land access issue. Ausgold’s acquisition of key land holdings, previously denied for three years, removes a significant impediment to project development. This strategic move not only secures mining rights but also expands the life-of-mine gold production potential, offering greater flexibility in mine planning and scheduling.
With land access secured, Ausgold has initiated an ambitious 44,000-metre drilling campaign focused on resource growth and de-risking. Early results from the Central Zone, including high-grade intercepts such as 16 metres at 19.25 grams per tonne gold, reinforce the potential for resource expansion. The drilling program targets extensions down-plunge and down-dip of known lodes, underground resource expansion, and infill drilling to strengthen confidence ahead of the final investment decision.
Operational and Financial Highlights
The DFS update outlines a straightforward processing approach featuring a 3.6 million tonnes per annum carbon-in-leach (CIL) plant with expected gold recoveries exceeding 90%. The project benefits from a low strip ratio of 7.02 over the life of mine and competitive all-in sustaining costs (AISC) averaging around A$2,200 per ounce, placing Katanning in the lower half of the Australian cost curve.
Initial capital expenditure is estimated at A$354 million, including contingencies and pre-production operating costs. The project’s robust economics are further enhanced by a conservative gold price assumption of A$3,000 per ounce for reserve calculations, underscoring the resilience of the business case.
Permitting and Community Engagement on Track
Katanning’s location in a Tier-1 mining jurisdiction like Western Australia brings regulatory advantages. The project is part of the state’s Priority Approvals Program, with environmental assessments underway and community engagement progressing positively. Early engineering works and key hires are in place to maintain momentum toward a final investment decision expected in the near term.
Ausgold’s refreshed board and management team bring deep technical and operational expertise, further bolstering confidence in the project’s delivery. The company’s extensive land package, including over 3,000 square kilometres of tenure capturing major mineralised trends, provides a strong platform for future exploration and satellite resource development.
Looking Ahead
With a clear pathway to production, strong financial metrics, and a strategic drilling program underway, Ausgold’s Katanning Gold Project is poised to become Australia’s next mid-tier gold producer. The coming months will be critical as drilling results, permitting progress, and financing arrangements unfold, shaping the project’s trajectory toward first gold in late 2027.
Bottom Line?
Katanning’s DFS update sets a solid foundation, but execution risks and market dynamics will test Ausgold’s path to production.
Questions in the middle?
- How will ongoing drilling results impact the mine life and reserve upgrades?
- What are the key risks in securing final permits and financing for construction?
- How sensitive are project economics to fluctuating gold prices beyond current assumptions?