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Dacian Gold has indefinitely suspended operations at its Mt Morgans operation, citing supply chain and labour challenges.

But the company has indicated that the closure will allow it to reassess and conduct maintenance without the pressure of production costs. In other words, Mt Morgans is closing for a future facelift.

Mt Morgans is located 37km west-southwest from Laverton in WA

During its life, the Mt Morgans gold mine boasted the only operating mill of its size in the region not in the hands of a major miner. The mill was capable of processing around 2.9 million tonnes per annum.

News of the indefinite suspension comes after Dacian announced gold production in the December quarter of 12,039 ounces, down from 21,525 in the September quarter of 2022.

According to Dacian, the operational hiatus will allow the company to improve water security and tailings storage capacity, and assess and develop third-party ore source options. Dacian intendeds to create a low-risk, sustainable mine plan before Mt Morgans can reopen.

“It was a very difficult decision to suspend operations at Mt Morgans,” Dacian non-executive and independent chair Craig McGown said.

“However, the risks in the current operating environment have been emphasised during our final operating month with a maintenance shut being extended on the back of supply chain and labour shortage challenges.

“We will now balance cash preservation with active exploration and development of a mine plan to support a future restart of operations at Mt Morgans.”

The cost of placing the mine on care and maintenance is estimated at $4–5 million and will be funded from existing cash and gold on hand.

Dacian reports a cash balance of $34.8 million, as well as $2.8 million in gold on hand, at the end of March.

While Dacian has announced that the closure will result in some redundancies, the company plans to work to redeploy employees under a shared management services agreement with Genesis Minerals, its largest shareholder.