Ausgold Limited has delivered an updated Definitive Feasibility Study for its Katanning Gold Project, revealing increased gold production and enhanced financial returns, supported by a $90 million capital raise to accelerate development.
- Life-of-mine gold production increased to 1.22 million ounces
- Post-tax NPV5 rises to A$1.03 billion at A$4,300/oz gold price
- Underwritten $80 million share placement plus $10 million share purchase plan completed
- Project enters WA Government’s Priority Approvals Program for streamlined permitting
- Major 44,000m drilling campaign underway with promising initial assay results
Updated Feasibility Study Signals Stronger Katanning Gold Project
Ausgold Limited has released a comprehensive update on its flagship Katanning Gold Project (KGP) in Western Australia, showcasing a significant step forward in the project’s development. The updated Definitive Feasibility Study (DFS) delivered in December 2025 outlines a longer mine life, increased gold production, and improved financial metrics, positioning KGP as a compelling new gold mining operation.
The DFS update forecasts life-of-mine gold production rising by 82,000 ounces to 1.22 million ounces, with an average annual production of 143,000 ounces in the first four years. Financially, the project’s post-tax net present value (NPV5) climbs to A$1.03 billion at a conservative gold price of A$4,300 per ounce, alongside an internal rate of return (IRR) of 52.4%. At current spot prices near A$6,400 per ounce, these figures soar to an NPV5 of A$2.30 billion and an IRR of 92%, underscoring the project’s robust economics.
Capital Raising Fuels Development Momentum
To underpin the accelerated development pathway, Ausgold successfully completed an underwritten $80 million share placement and a $10 million share purchase plan during the quarter. These funds are earmarked for critical pre-development activities including construction of a 250-bed workforce accommodation facility, land acquisition, ongoing exploration, and general working capital. The capital raise significantly strengthens Ausgold’s balance sheet, providing financial flexibility as it advances toward a Final Investment Decision (FID) targeted for mid-2026.
Permitting and Land Agreements Advance
Permitting progress has been notable, with the KGP entering the Western Australian Government’s Priority Approvals Program. This initiative facilitates coordinated cross-agency management of environmental and development approvals, expediting the regulatory pathway. The Environmental Protection Authority (EPA) has commenced formal assessment including a public review phase, reflecting the project’s readiness for development.
Additionally, Ausgold secured a long-term lease agreement with the Shire of Katanning for land to establish the workforce accommodation village, strategically located on the town’s outskirts. The company also acquired 240 hectares of freehold land integral to the expanded mine footprint, enabling operational flexibility and potential resource growth.
Exploration Campaign Confirms Growth Potential
Ausgold has launched an extensive 44,000-metre drilling campaign across the KGP and regional targets, aiming to expand the resource base and de-risk the mine plan. Early assay results have been encouraging, with high-grade mineralisation extending beyond current resource boundaries and in-fill drilling returning grades higher than modelled. These results reinforce the potential for resource upgrades and new discoveries, critical for sustaining long-term project value.
Executive Chairman John Dorward highlighted the quarter’s achievements, noting the transformative impact of recent land acquisitions and the company’s proactive approach to project execution. He emphasised the strong early cash flows forecasted and the company’s commitment to delivering a final investment decision by mid-2026.
Looking Ahead
With multiple work streams underway, including engineering design, contract tendering, permitting, and financing discussions, Ausgold is well-positioned to transition from development to construction. The company’s robust cash position of A$75.6 million and successful capital raising provide a solid foundation for the next phase of growth.
Bottom Line?
Ausgold’s strengthened Katanning project and capital base set the stage for a pivotal final investment decision in 2026.
Questions in the middle?
- How will ongoing drilling results impact the resource upgrade and mine plan?
- What are the key risks in securing final project financing and regulatory approvals?
- How might fluctuating gold prices affect the project’s economic viability and Ausgold’s strategy?