Ausgold Limited (ASX: AUC) – Katanning Gold Project DFS Confirms Long-Life, High-Margin Gold Mining Operation.
- Noel Ong
- Jul 27
- 6 min read
Updated: Jul 28
Announcement

Ausgold Limited (ASX: AUC) has delivered a definitive milestone with the release of its Definitive Feasibility Study (DFS) for the 100%-owned Katanning Gold Project (KGP). The study validates KGP as one of Australia’s most advanced undeveloped open-pit gold projects, combining scale, near-term development potential, and robust economics within a Tier-1 jurisdiction (Figure 1).

Figure 1: KGP Project - Long-life, low-risk operation in a Tier-1 jurisdiction (source: AUC)
Ausgold Executive Chairman John Dorward commented:
“We are delighted with the outcomes of the DFS which clearly demonstrate the robust financial returns that will be generated by the KGP. The onschedule completion of this high-quality study marks a critical milestone in Ausgold’s journey to becoming Australia’s next mid-tier gold producer.
We are now turning our minds to the next phase of project development, including front-end engineering and design and debt financing, while we also progress activities to finalise land access and complete permitting for the Project.”
Key DFS Highlights – A Glance at the Path of the Gold Mining Operation.
(Figure 2).
Life-of-Mine (10 years):
▸ 1.14Moz gold production
▸ AISC: A$2,265/oz
▸ Post-tax NPV5: A$954 million
▸ IRR: 53%
▸ Post-tax cashflow: A$1.37 billion
▸ Payback: 13 months
First 4 Years (High-Grade Phase):
▸ Avg. production: 140koz/year
▸ AISC: A$2,180/oz
▸ Gold recovery: 91.1%
Ore Reserve: 35.2Mt @ 1.11g/t for 1.25Moz (84% Proved)
Updated Mineral Resource: 69Mt @ 1.11g/t for 2.44Moz (91% Measured & Indicated) (Figure 3)
Pre-Production CapEx: A$355.1 million (incl. contingency)

Figure 2: KGP Project – KGP DFS layout (source: AUC)

Figure 3: Updated MRE of 69Mt @ 1.11g/t Au for 2.44Moz Constrained to A$4,500/oz optimised pit shell (source: AUC)
Mining & Processing Overview
The DFS outlines a conventional open pit operation (Figure 4):
Mining Strategy:
▸ Load-and-haul with a strip ratio of 6.85
▸ Ore mined: 3.5Mtpa
▸ High-grade feed front-loaded to optimise early cashflows
Processing Facility:
▸ 3.6Mtpa CIL plant
▸ Recovery: 90.4% LOM average
▸ Tailings detoxification and TSF lined with geomembrane for environmental compliance
Power: Hybrid LNG + solar with BESS (42% renewable contribution)

Figure 4: KGP Process Plant Layout (source: AUC)

Figure 5: Integrated Waste Rock and TSF Facility (source: AUC)
Financial Metrics and Sensitivities
Base Case @ A$4,300/oz gold price:
▸ NPV5 (post-tax): A$954M
▸ IRR: 53%
▸ Payback: 13 months
Spot Case @ A$5,000/oz:
▸ NPV5: A$1.35B
▸ IRR: 68%
▸ Payback: 12 months
Cashflow:
▸ Pre-tax: A$1.93B
▸ Post-tax: A$1.37B
▸ WA Royalties: A$122M
▸ Commonwealth Tax: A$565M
Regional & Social Impact
Job Creation:
▸ Construction phase: ~250 FTEs
▸ Operational phase: ~350 FTEs
Community & Indigenous Engagement:
▸ Ongoing collaboration with Traditional Owners and local councils
▸ Regional benefits and procurement programs under discussion
Development Timeline & Next Steps
Permitting & Land Access:
▸ Ongoing; key hearings scheduled from August 2025
Project Milestones:
▸ FID targeted: mid-2026
▸ Construction: ~18 months
▸ First gold pour: late 2027
Regional Exploration
Ausgold holds a dominant +3,500km² land position across the Katanning Greenstone Belt, encompassing all known mineralised trends. The FY26 drilling program will target regional prospects to identify satellite deposits to support a broader production hub at Katanning. Key targets include Nanicup-Zinger (shallow, high-grade hits), Kulin (untested >3km soil anomaly with strong trenching results), and Stanley (28km of gold-in-soil anomalism within the same host rocks as KGP but underexplored at depth) (Figure 6).

Figure 6: Ausgold - Regional Exploration (source: AUC)
Samso Concluding Comments
This DFS from Ausgold does, in my view, give an answer to the doubts of the project. Why has it taken this long to create management confidence to backup the mining game?, I think its just the time taken to collect the data and "maybe" the rising gold price help them push the concept further.
The mining game is all about de-risking as much as possible before committing funds to operations. For those that are new to this side of the resource industry, this is where things get really boring for speculators and really interesting for those that INVEST in solid projects. The market capitalisation of Ausgold is now RUD $255M and this is where serious DYOR and serious risk management for incoming investors starts.

Figure 7: Ausgold share price chart as of 23rd July 2025. (source: commsec)
The Ausgold journey has been a long one, and could the DFS be the start of a mining story for the company, or is it setting itself up for a bigger player to come and take the company out? Shareholders who are in the money will be very happy. The rising fortune since 2024 for shareholders will keep future fundraising roadshows buoyant, as long as the gold price remains at this level or higher.
There is still work to be done, no doubt—land access, permitting, and securing financing. But that’s part of the journey, and the DFS gives them the credibility to have those conversations at the right table. With the first gold targeted for late 2027, there is now a visible runway to development.
For investors who follow Samso, this is where we usually say—it’s time to keep your eyes on the data. The Katanning Gold Project isn’t just a gold story anymore. It’s a project with structure, clarity, and a path forward and most importantly, clarity on potential value on paper
This looks to be a good conservative investment play for gold mining cash flow or an M&A exit for existing shareholders.
The Samso Way – Seek the Research
This DFS reaffirms the discipline of staged de-risking. Ausgold has moved from resource growth to validated economics while preserving the upside of further reserve conversion and exploration-led extensions. With 91% of the MRE in Measured & Indicated, and a lean AISC profile in the lower half of the cost curve, the Katanning story now stands as a practical case study in project buildability and capital efficiency.
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