The best performer on the All Ordinaries index by some distance on Wednesday has been the Dacian Gold Ltd (ASX: DCN) share price.
In late morning trade the gold producer’s shares are up a massive 17% to 61.5 cents.
Why is the Dacian Gold share price on fire today?
This morning Dacian Gold released an update on its Life of Mine (LOM) plan and its FY 2020 operating guidance for the Mt Morgans Gold Operation in Western Australia.
According to the release, the updated mine plan confirms that Mt Morgans is a significant gold production centre with strong operating cash flows forecast for at least the next eight years.
The release explains that the company is forecasting over one million ounces of gold production in total with an all-in-cost base of between $A1,280-A$1,380 an ounce. The first five years are expected to average production of 170,000 ounces per annum.
Another positive is that because Mt Morgans is centred over the highly prospective Mt Margaret anticline within the prolific Laverton goldfields, management is confident that there is potential to increase the mine plan well beyond the eight years through ongoing exploration success.
Dacian Gold’s executive chairman, Rohan Williams, said: “This updated Life of Mine review confirms the strong production and cash flow generating capacity of Mt Morgans over the next eight years. We have taken learnings from our first full year of production at Mt Morgans and applied it to the current Ore Reserve to deliver a high-margin gold production profile over the next eight years.”
In FY 2020 the company expects production in the range of 150,000-170,000 ounces at a Mt Morgans all-in-cost of A$1,400-A$1,500 an ounce. These costs are inclusive of all forecasted capital spend at Mt Morgans with no incremental capital planned.
This is a big positive for Dacian Gold shareholders as there had be a lot of question marks over the future of the operation and the company itself.
Elsewhere in the industry, the Evolution Mining Ltd (ASX: EVN) share price hit a multi-year high this morning following the release of its preliminary full year results and the OceanaGold Corp (ASX: OGC) share price has edged higher following an update on activities at its Didipio operation.