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FINALIST: EXPLORER
18/10/22 10:45 am
Gold Mining Journal 2022 - Strip ad - 20 x 420.indd 1 18/10/22 10:45 am
Gold Mining Journal 2022 - Strip ad - 20 x 420.indd 1

Ausgold

only just

getting

started Ausgold has launched a new drilling campaign at its 2.16 moz Katanning project

by Michael Washbourne

usgold Ltd is still an explorer at heart, according to managing Ausgold’s resource and reserve announcements, in May
Adirector Matthew Greentree, despite a transformational year and August respectively, came on the back of an aggressive
which has positioned the company as a developer in waiting. exploration programme at Katanning, including more than
Perhaps the quietest achiever in the local gold sector over the 30,000m of drilling in the Central and Southern zones. The
past few years, Ausgold added almost 1 moz to the total resource company also raised $16 million early last year to fund that
at its 2.16 moz Katanning project during 2022, as well as declaring campaign and more.
a maiden reserve of 32mt @ 1.25 g/t gold for 1.28 moz alongside For Greentree, the eureka moment that suggested the project
a robust PFS which forecast low-cost production of 105,000 ozpa could be much bigger than previously thought occurred several
over 11 years using simple open-cut mining methods. years ago when Ausgold intersected 26m @ 6.6 g/t at what is
Now in his sixth year at the helm of the company, Greentree now called Jinkas South.
believes the full scale of the Katanning project is still to be realised. “The discovery hole at Jinkas South was a success because it
“We’ve still got the ethos of an explorer because we haven’t given validated the conceptual model I had developed previously with
up the view that this is a much larger project,” he told GMJ. my SRK Consulting cap on,” he said. “Once we understood that,
it enabled us to really go to town in terms of building up the scale.”
“Both the resource and now the feasibility study have shown
this is a very large, attractive project in terms of economics. Ausgold also found success using downhole EM to firm up drill
But alongside that, we’ve also got a number of very exciting targets. Reported discovery costs over the past year were just
prospects and extensions to the current mineralisation to follow $11/oz.
up, so we won’t be giving up exploration any time soon. We’re A new exploration campaign targeting extensions to the Central
really looking at this as an opportunity to move into cash flow so and Southern zones, as well as examining the underground
we can increase the scale of the project and the company.” potential of the project, began in November as the company
The PFS also indicated average production of 126,000 ozpa over officially launched into DFS mode.
the first six years at a head grade of 1.47 g/t gold, generating That study is expected to be completed before the end of 2023,
$555 million of after-tax cash flow over that period. Capex for ensuring Ausgold will remain at the forefront of investor minds for
the proposed mine and 3 mtpa conventional gravity and CIL at least the next 12 months. The company was recently given a
processing facility is priced at $225 million. special mention in Argonaut’s annual list of the “best undeveloped
Other key financials outlined in the study include post-tax NPV metals and mining projects” on the ASX.
of $364 million, IRR of 40.7% and payback in 1.7 years of first Greentree expects interest in the company to grow further as it
gold. The estimated AISC over the first six years of production is continues to “unlock” mineral development opportunities around
$1,370/oz. Katanning.
“Not many companies come out with a plus-1 moz maiden ore “What we’re demonstrating with good, systematic exploration that
reserve, but what’s especially fantastic about this is the financial this is a very large gold province which just hasn’t had the same
metrics we’ve been able to obtain with it,” Greentree said. attention as other parts of the Yilgarn,” he said.
“We used a fairly conservative $2,300/oz Australian gold price in “What we’ve identified is the tip of the iceberg. This is still a pretty
this financial modelling and it gave us a payback period of just 18 underexplored greenstone belt and we think there is a much
months. If we move that closer to today’s spot gold price [$2,600/ larger project at play.”
oz at the time of print], the NPV increases quite considerably.”

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