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Dacian finds a friend in NTM

by Michael Washbourne

here is no one better placed than outgoing NTM Gold Ltd
Tmanaging director Andrew Muir to adjudicate whether
embattled miner Dacian Gold Ltd has truly turned the corner.
Dacian is set to acquire 100% of the shares in NTM later this
quarter after the two companies agreed to a $285 million
merger in mid-November. Under the scheme of arrangement,
NTM shareholders will receive one Dacian share for every 2.7
shares held in the Muir-led junior explorer.
Upon completion of the merger, NTM shareholders will hold
31.6% of the combined group.
The merger – scheduled to take effect on March 3 – will see
NTM’s undeveloped Redcliffe project integrated into Dacian’s
nearby Mt Morgans operations which have been plagued by
production problems since first gold was poured in early 2018.
Since that milestone Dacian has essentially lost 90% of its value,
hitting rock bottom in April last year when the company was
forced to undertake a significantly discounted capital raising of
$98 million after mothballing its underground operations and
switching the production focus to selective open pits. The GTS deposit – part of NTM’s Redcliffe project – will provide
Dacian with some critical high-grade feed for its Mt Morgans
Leigh Junk, who joined Dacian as managing director almost
operations, near Laverton
12 months ago, has been widely praised for turning around the
company’s fortunes. This was reflected in its positive start to
FY2021 with 32,799oz produced for an AISC of $1,315/oz in the The combined group will have a total resource base of 45.4mt
September quarter. @ 1.88 g/t gold for 2.75 moz upon completion of the merger.
Both metrics are in line with Dacian’s full-year guidance of Dacian is expected to initially target the high-grade, shallow
110,000-120,000oz at $1,400-1,550/oz AISC for the Laverton- oxide mineralisation in the Hub and GTS deposits at Redcliffe in
based operations. a bid to both enhance and extend its mine plan.
Speaking to GMJ following the merger announcement, Muir “Dacian have a target of about 18 months to get some of our
was quick to reassure investors his company would not be deposits into development, so we’ll be trying to assist that
combining with Dacian if there was any hint of further operational timeframe by initially doing some drilling and then a few of
troubles. the necessary study works that are going to help that process
along,” Muir said.
“We did pretty extensive due diligence when we were discussing
a transaction,” Muir said. “Obviously with the production issues “We see it as one of those genuine win-win stories. We’ve got
that they’ve had, we needed to get our heads around what it all some high-grade material that Dacian can get access to faster
meant and where they were going and what the upside was, than what they ordinally would be able to and it also allows the
but we’re very comfortable with the direction that Dacian has monetisation of our Redcliffe project instead of us going at it
gone in. ourselves.
“I think Leigh’s made a big difference on the production front… “We could have continued down the path of continuing to
and the due diligence that we did on them aligned really well explore and over time look to get a standalone operation up and
with what the company said they were going to do, so we’re running, but obviously it takes a lot of time, exploration success
actually very optimistic about the future of Dacian. and funds to do that. And this also still gives us exposure to any
exploration success, not just by us but also Dacian as well.”
“Hand on heart, we couldn’t put our shareholders into a
company that we didn’t think had turned the corner. We think Junk will continue to lead the combined group as managing
they have and there’s a lot of upside, both on the mining side but director, with Dacian chairman Ian Cochrane also retaining his
also on the exploration side.” position and NTM director Eduard Eshuys moving across to fill
a non-executive board role.
NTM’s Redcliffe project is within 100km of Dacian’s 2.5 mtpa
processing infrastructure at Mt Morgans and hosts a global After almost three years with NTM, Muir plans to take a short
resource of 13.4mt @ 1.57 g/t gold for 679,000oz, including a break before seeking new opportunities in the junior space
high-grade component of 890,000t @ 4.9 g/t for 141,000oz. where his skillset lies.

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