Dacian Gold Ltd. recently sought expressions of interest (EoI) for third parties to access its 2.9-million-metric-ton-per-year (mt/y) mill. The proposed merger of Genesis with St. Barbara Ltd., and comments from Genesis and St. Barbara that ore from the Ulysses gold project may now be re-directed to the Gwalia mill (rather than Mt. Morgans mill) created uncertainty for Dacian’s development plan.
Even if the Genesis-St. Barbara merger fails to complete, St. Barbara and Genesis are working together on an ore purchase agreement to potentially enable Ulysses or other Genesis ore sources to be processed at the Gwalia mill. Dacian was relying on Genesis’ Ulysses ore to optimize its mill throughput, while industry-wide shortages of people and equipment placed pressure on near term ore delivery.
The expression of interest’s process has not yet identified an equivalent replacement ore source and risks around approvals timing and general project delivery for multiple third-party ore sources complicate scheduling. The uncertainty around dump leach grade, lead times to improve longer term water security, the cost environment, along with near term tailing storage lift capital investment funding requirement have resulted in the company determining to pause the EoI process and complete its transition to exploration and development in March 2023.
In the light of the previously mentioned factors, the Dacian Board has determined that the mill will be put on care and maintenance to preserve suitable stockpiles to complement a future restart of operations at Mt Morgans and preserve cash by deferring capital investment in tailings storage facility lifts and replacement water sources, while progressing required studies and approvals.
