Why the Dacian Gold share price rocketed 17% higher today

The Dacian Gold Ltd (ASX:DCN) share price was on fire on Monday. Here's why…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One of the best performers on the All Ordinaries index on Monday was the Dacian Gold Ltd (ASX: DCN) share price.

Despite the S&P/ASX All Ords Gold index sinking 2.8% lower, this gold miner's shares rose a massive 17% to $1.32.

Why did the Dacian Gold share price rocket higher?

Investors were scrambling to get hold of the company's shares on Monday after it provided an update on its Mt Morgans Gold Operation (MMGO), which is located near Laverton in Western Australia.

According to the release, key operational benchmarks improved during July compared with the June quarter. This led to total ore movement rates across both the underground and open pit stabilising at planned levels in July.

As a result, total mined ore grade at the Westralia underground site increased to 3.5g/t, versus 2.5g/t in the June quarter, as underground productivities across Beresford South, Beresford North and Allanson met expectations.

Looking ahead, management expects MMGO production to be 150,000-170,000 ounces in FY 2020, weighted approximately 45%/55% between the first half and the second half.

Its all in costs are forecast to be between A$1,400 to A$1,500 an ounce, which means that MMGO will be a highly profitable operation if the gold price stays around these levels.

Dacian Gold's executive chairman, Rohan Williams, said: "It is pleasing to start the FY2020 year with a plus 16,000-ounce month, positioning us to meet expectations set with our recently updated Life-of-Mine. Importantly the mill to claimed production reconciliation was excellent at 102%, again confirming the good correlation between grade control models and mill production."

Overall, I've been very impressed with the way Dacian Gold has ramped up production and feel it is a decent alternative to gold mining giants Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST).

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Gainers

rising gold share price represented by a green arrow on piles of gold block
Share Gainers

Here are the top 10 ASX 200 shares today

It was a horrible way to end the trading week today for ASX investors.

Read more »

Female miner smiling at a mine site.
Share Gainers

Up 834% in a year, guess which ASX mining stock is hitting new all-time highs today

The ASX mining stock has gone from strength to strength over the past year.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why Fiducian Group, Northern Star, Paradigm, and Santos shares are charging higher

These shares are avoiding the market selloff.

Read more »

Man pointing at a blue rising share price graph.
Financial Shares

How is this ASX 200 financial stock popping 6% today?

This lucky company has just swung into the green in 2024...

Read more »

a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.
Share Gainers

Why BHP, Challenger, Rio Tinto, and Telix shares are pushing higher today

These ASX shares are having a strong session. But why?

Read more »

rising gold share price represented by a green arrow on piles of gold block
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX 200 kept up the selling this Wednesday, with another day in the red.

Read more »

Green arrow going up on a stock market chart, symbolising a rising share price.
Share Gainers

Why Bank of Queensland, DroneShield, Evolution Mining, and Lynas shares are storming higher today

These ASX shares are having a very strong session on hump day.

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was mayhem on the markets today, with one of the worst days in a long time for ASX shares.

Read more »