New exploration model shows drill targets up to 2km beyond existing mineralization: Dacian Gold Ltd (ASX: DCN) stock moved up about 3% on June 28, 2018, and has been up 5% in the last five days. The group has indicated to have production of 30?40Koz for FY2018 that is said to further increase to 180?210 Koz for FY2019. DCN is targeting over 200Koz pa for over 10 years. Its cash liquidity has been indicated at A$73 million. Recently, the group unveiled its new exploration model highlights extending for up to 2km beyond the existing resources and mining areas of the potential of the 1.6Moz Westralia Ore System, at its 100%?owned Mt Morgans Gold Operation in WA.
 
The new results from a 24,566m, 38?hole infill and extensional diamond drilling program below the Beresford North Ore Reserve have contributed to an improved understanding of the controls of the mineralisation at Westralia. This new geological model is based on the now?confirmed high?grade shoot trends, that confirm the Westralia Ore System to be up to 5km long with new drill target areas extending for 2km beyond the existing mineralisation at depth. The company has planned to aggressively pursue newly generated drill targets in FY19. Moreover, this is a major milestone for the Westralia Deposit and for DCN, and there is confidence that the ongoing drilling will extend Mineral Resources, Ore Reserves and mine life at Westralia and also Mt Morgans. Additionally, the current 1.6 million ounce Mineral Resource is comprised of 905,000 ounces of Measured and Indicated Mineral Resource and 700,000 ounces of Inferred Mineral Resource. As part of its 2016 Mt Morgans Feasibility Study, DCN had estimated a 492,000 ounce Ore Reserve at Westralia within the Beresford and Allanson deposits.
 

Investments Pillars for FY18 (Source: Company Reports)
 
DCN also confirmed that the high-grade shoot seen within the Beresford South Ore Reserve continues for a further 250m below the Ore Reserve. The Beresford South drilling had confirmed that high?grade shoots at Westralia can extend for many hundreds of metres. Going forward, Westralia Ore Reserve update has been planned for 2H CY2018. The company will commence drill testing in newly defined target areas at Westralia aiming to increase Mineral Resource, Ore Reserves and mine life. Meanwhile, the stock has fallen 14.7% in three months as on June 27, 2018. There is a possibility that the group might be considered for some takeover deal given the fundamentals. We have a “Hold” on the stock at the current price of $ 2.740.

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