Ausgold (ASX:AUC) gets $38m backing to take Katanning Gold through final decision

Ausgold has received a firm $38 million backing from institutional and sophisticated investors to take its Katanning Gold Project through to a final investment decision in the Western Australian South West.

The company believes its 3.04 million ounce at 1.06 grams per tonne resource and 1.28Moz @ 1.25g/t of maiden ore reserves warrant a stand-alone gold operation exceeding 136,000 ounces a year.

And the Perth-based explorer and developer is obviously not alone, now holding the funds to complete its definitive feasibility study, settle the acquisition of freehold land, and continue exploring ahead of a final decision.

Ausgold’s new Executive Chairman John Dorward was pleased to be himself subscribing for $1 million from the placement subject to approvals, which he said would see the company strongly positioned through to FID.

“I am enormously excited about Ausgold’s growth potential, leveraging the existing three-million-ounce resource base at the Katanning Gold Project and the company’s large landholding in one of Australia’s great, untapped greenstone belts,” he said.

Company Managing Director Matthew Greentree said the landmark raising would underpin key work programs and position Ausgold for a pivotal phase of growth.

“We are now completing the final elements of the definitive feasibility study for the project development, which will be delivered in the second half of this year,” he said.

He added funding would enable it to complete the acquisition of key farming properties covering the main orebody and infrastructure areas and it would further de-risk Katanning through grade control drilling and the ordering long-lead items.

“Exploration along the 17km KGP mine trend and thirteen drill-ready regional targets will aim to deliver the multi-million-ounce potential at Katanning,” Greentree said.

Ausgold has compared itself to where $1.75 billion market capper Capricorn Minerals (ASX:CCM) was with its flagship Karlawinda operation around four years ago, but Katanning was bigger, with higher grades, double the tenure, and better access to infrastructure.

The junior company is still a way off that mark, but a raising of more than half its $66 million market cap will at least offer the opportunity to become a new mid-tier producer.

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