Ausgold's belt-scale Katanning gold project is poised to shine

News.com.au

18-06-2025

Ausgold's Katanning gold project covers 3500km2 of ground in WA's South West region
DFS for proposed 3.6Mtpa development with a 10-year mine life nearing completion
Decision to mine could come as early as Q1 or Q2 2026
Pegging large tracts of ground around promising projects is common enough in the mining world, but having a junior company lock down what's essentially an entire greenstone belt is far less common.
Yet that's exactly what Ausgold (ASX:AUC) has managed to achieve with its Katanning gold project in Western Australia's Great Southern, where it has secured a landholding of over 3500km2 that is just 30km from the town of Katanning and some 275km southeast (and 3.5hrs via the Albany Highway) from Perth.
This is primarily on freehold land – requiring the company to engage with landholders rather than deal with native title agreements, and includes mineralised trends that strike over 100km.
This achievement was made possible by the relatively recent recognition by the Geological Survey of Western Australia in 2019 that what was previously considered to be just granite was actually a greenstone belt.
Greenstone belts are much sought after for explorers due to their well-known gold prospectivity.
Executive chairman John Dorward, who took the helm about a year ago as Ausgold brought in fresh blood with experience in operations and project development, told Stockhead the late identification of the project area as a greenstone enabled the company to really 'put its foot' on the entire belt.
'All of the ground that is of interest we have under tenure,' he added.
Katanning gold project
That greenstone was indeed fertile. Ausgold has defined one of the largest undeveloped resources in WA of 3.04Moz of gold at an average grade of 1.06g/t.
Further highlighting the level of work already conducted, this includes higher confidence measured and indicated resources totalling over 2.42Moz and an ore reserve of 1.28Moz at 1.25g/t.
That is enough for a plant with proposed throughput of 3.6 million tonnes per annum to comfortably sustain production of some 136,000oz of gold per annum for an initial 10-year mine life.
Katanning is certainly attractive enough for Ausgold to be able to attract primarily northern hemisphere institutions to back a $38m placement last year to fast track its development.
This includes the key definitive feasibility study which the company is putting the finishing touches on. It's due for release before the end of the month.
'It's starting to look really good, taking shape. I think it's going be a really strong project,' he added.
He also noted the feasibility study is a big step towards putting a milestone out in the public domain and that not missing it would be a critical step on the right path for the company, contrasting with when it previously struggled to advance projects in a timely fashion.
That gold prices are still trading at near record levels – A$5212/oz on Wednesday – is certainly helping, though Dorward said Katanning will be very competitive against other developments even at conservative price assumptions.
Only the beginning
The current Katanning project is a starter kit for Ausgold believes will be a multi-decade asset. The company's enormous land holding means there is plenty of the greenstone belt still to explore for large new gold deposits.
'We have started to actively explore that. We have enough to build a very attractive project. today, but we think it's just the early innings and very much just the starter for what we think will ultimately be there,' he said.
Immediate growth could come through drilling to the north and south of existing resources as it remains open in those directions.
There is also potential for repeat structures in the immediate vicinity of the project and opportunities for high-grade satellite feeders to be found across the company's regional exploration package.
A major ~19,000m drill program is currently underway including 12,000m of RC drilling proximal to the KGP designed to de-risk the first 18 months of production and grow the mineral resource.
The infill drilling has already delivered near-surface gold intercepts such as 14m grading 4.58g/t gold from 29m in the Central Zone that support the de-risking strategy and high-grade results such as 10m at 10.55g/t gold from 42m in the Southern Zone that supports the project's growth potential.
Likewise, drilling has extended the Datatine high-grade shoot in the Northern Zone by ~240m down-plunge after returning a notable intercept of 6.6m at 3.4g/t gold from 362m, reinforcing its potential as a high-grade underground prospect that remains open down-plunge.
Drilling at regional prospects has also intersected broad gold zones, which reinforce Ausgold's belief in the prospectivity of its regional growth pipeline.
Road ahead
Besides the upcoming DFS, Ausgold is focused on permitting.
'We will have our initial application in by the end of this month to start the permitting clock, which we think is around a nine-month timeline,' Dorward said.
The company is also looking at debt financing, led by chief financial officer Benjamin Stockdale, a experienced operator who has assisted junior mining companies in securing financing for development of their first project.
'We are also starting detailed engineering and looking to buy long lead items as well as securing the last of the land access that we need in terms of compensating the underlying landholders,' he noted.
'It's going to be a busy 12 months but by end of Q1, early Q2 next year, we'll be looking to press the button on breaking ground.
'Once we publish the DFS, it is going to look to people like a very straight down the middle of the fairway, substantial Western Australian open pit gold mine.
'There's nothing challenging in terms of the mining or the metallurgy or the sort of the environmental aspects or anything like that.
'It's a straightforward project that's of really good size and it will make a tonne of money.'