Ausgold set to fully unlock Katanning potential after transformative land acquisition clears key development hurdle

• Ausgold reaches agreement to acquire ~860 hectares of freehold land covering a material proportion of the Katanning gold resource
• Company to optimise its June 2025 DFS to add life-of-mine gold production and reduce mining costs
• It will also start exploration in the area, which has some of the most prospective gold lodes

Special Report: Ausgold’s plans to develop its Katanning gold project in WA’s Great Southern region have received a significant shot in the arm after it reached agreement to acquire a substantial parcel of freehold land.

The acquisition of the ~860-hectare land package is set to not only simplify mine plans but also remove artificial constraints to the ore reserve as it covers a material proportion of the project’s gold resource of 2.44Moz and about 212 hectares of Mining Licence ML70/211.

It also ends a legal case running since August 2023 in relation to Plaints 688801 and 719694, through which Ausgold (ASX:AUC) had sought to enforce its right to mine on Mining Licence ML70/211.

The company will now re-optimise its June 2025 definitive feasibility study to capitalise on not having to remain within the eastern boundary of the mining licence.

“Securing this land is the key de-risking event for the development of the KGP,” executive chairman John Dorward said.

“Land access issues, which have impaired the optimal development of the Katanning gold project up to this point, have now been removed and we can now get on with the unfinished business of determining the full potential of this emerging gold district.

“Significant gold endowment was artificially excluded from the DFS due to previous tenure constraints and we look forward to showcasing the full potential of the KGP.

“We expect to be able to deliver material enhancements to the existing project as we progress our permitting and financing activities towards a final investment decision.”

The company is paying $35m for the land with the first $15m payable on August 26, 2025, and the remaining $20m to be paid upon the earlier of FID or August 26, 2026.

More from Ausgold: Katanning all set for feasibility and financing milestones

Road ahead

With the new ground in hand, AUC now plans to carry out further optimisation of the DFS mine plan with a view to adding additional life-of-mine gold production from areas of the Central Zone which are part of existing resources but excluded from production estimates because of previous tenure constraints.

It will also seek to reduce mining costs by relocating waste dumps to more favourable locations to reduce haulage distances.

Under the agreement, the vendors will have to vacate the land by February 28, 2027, which is prior to the anticipated timing for mining to start.

As part of the acquisition, AUC has also gained immediate access to the land for the purposes of exploration, studies and surveys – something it had previously been denied while the dispute was ongoing.

This has prevented exploration drilling from being undertaken during that time in some of the most prospective areas.

It now plans to start a multi-rig drill program on the land to test key areas such as the down-plunge extent of the Central Zone ore shoots – where previous drilling before access was denied returned high-grade results – and the White Dam lode that had seen some of the highest-grade results.

Previous drilling within the Central Zone had returned assays such as 16m grading 19.25g/t Au from a down-hole depth of 97m and 10m at 10.94g/t from 81m.

This article was developed in collaboration with Ausgold, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.