How Ausgold’s DFS Update Transforms Katanning Gold Project’s Future

A Transformative Update to Katanning’s Feasibility

Ausgold Limited (ASX – AUC) has unveiled an updated Definitive Feasibility Study (DFS) for its wholly owned Katanning Gold Project (KGP) in Western Australia, reflecting the substantial benefits of a transformative land acquisition completed in August 2025. This update not only lifts the life-of-mine gold production forecast by 82,000 ounces to 1.22 million ounces but also enhances the project’s financial metrics and operational profile.

The revised mine plan capitalises on expanded land tenure, allowing access to previously constrained ore zones within the Central Zone of the deposit. This unlocks additional gold resources and enables more efficient waste management, reducing haulage distances and mining costs. The result is a more robust and extended mine life, with average annual gold production elevated to 143,000 ounces per annum in the first four years and a significantly improved production profile in years five through ten.

Financial Strength and Operational Efficiency

At a conservative gold price of A$4,300 per ounce, the updated DFS projects a post-tax net present value (NPV5) of A$1.028 billion and an internal rate of return (IRR) of 52.4%, underscoring the project’s strong economic viability. At current spot gold prices near A$6,400 per ounce, the NPV5 more than doubles to A$2.30 billion with an IRR soaring to 92%. The pre-production capital expenditure is estimated at A$354 million, with a rapid payback period of just 17 months, highlighting the project’s capacity to generate early cash flows.

Operational costs have also improved, with an all-in sustaining cost (AISC) reduced to A$2,252 per ounce over the life of the mine and A$2,157 per ounce during the initial four years. These cost efficiencies are supported by detailed mine scheduling, optimized pit designs, and a processing plant designed to handle 3.6 million tonnes per annum using proven technology.

De-risked Ore Reserve and Development Readiness

The updated Ore Reserve estimate stands at 1.33 million ounces, predominantly in the Proved category (83%), providing a solid foundation for project financing and development. The mine plan relies on conventional open pit mining methods with selective extraction to minimise dilution and ore loss. Ausgold has made significant progress on pre-development activities, including front-end engineering, tendering for key contracts such as workforce accommodation and power supply, and advancing permitting processes.

Strategically located near the regional hub of Katanning and within reasonable driving distance of Perth and other regional centres, the project benefits from existing infrastructure and a supportive local community. Ausgold is actively engaging with local councils and Traditional Owner groups to establish regional benefits programs and ensure collaborative heritage management and employment opportunities.

Outlook and Next Steps

With a comprehensive DFS Update in hand, Ausgold is targeting a final investment decision (FID) by mid-2026 and aims for first gold production by the end of 2027. The company has appointed Grant Samuel as debt advisor and is progressing financing discussions, buoyed by positive feedback from potential financiers. An aggressive exploration program is underway to extend mine life and discover new resources, which could further enhance the project’s value.

While the DFS Update presents a compelling case for development, Ausgold acknowledges the inherent risks related to securing full land access and funding. The inclusion of a small proportion of Inferred Mineral Resources in the mine plan introduces some geological uncertainty, and ongoing environmental approvals and community consultations remain critical milestones.