Ausgold Limited (ASX: AUC) has reached a watershed moment with the acquisition of 860 hectares of critical freehold land for its Katanning Gold Project in Western Australia. The $35 million deal ends a protracted legal dispute and removes the final barriers standing between the company and full project development.
The land acquisition represents far more than a property transaction – it’s the key that unlocks the project’s true potential. This strategic parcel hosts a material portion of Katanning’s Mineral Resource and covers areas that were artificially excluded from the June 2025 Definitive Feasibility Study due to access constraints.
Ausgold is pleased to advise that it has signed a binding agreement with unrelated parties under which it will acquire a substantial freehold land package which is critical to the development of its Katanning Gold Project in WA. https://t.co/SsNFI81r9F$AUC #gold #Katanning pic.twitter.com/W1mPucdmCg
— Ausgold Limited (@Ausgold_Au) August 21, 2025
Legal Victory Clears Development Path
The settlement brings closure to Plaints 688801 and 719694, court proceedings that have been running since August 2023. These legal challenges had prevented Ausgold from accessing some of the most prospective areas of its mining licence ML70/211.
“Securing this land is the key de-risking event for the development of the KGP,” stated Executive Chairman John Dorward. “Land access issues, which have impaired the optimal development of the Katanning Gold Project up this point, have now been removed.”
The acquisition includes approximately 212 hectares of ML70/211 plus substantial buffer areas that significantly improve prospects for future expansion beyond the current mine plan.
Multi-Rig Drilling Campaign Commences
With immediate land access secured, Ausgold is mobilising multiple drill rigs to test previously inaccessible high-grade zones. The exploration program will target:
- Down-plunge extensions of the Central Zone ore shoots
- The White Dam lode, which has returned some of the project’s highest-grade results
- Regional prospects that have been off-limits during the legal dispute
Historical drilling in these areas returned exceptional results, including 16 metres at 19.25 g/t gold and 26 metres at 6.60 g/t gold from the Central Zone. The White Dam lode previously delivered intercepts of 7 metres at 10.94 g/t gold and 3 metres at 18.81 g/t gold.
DFS Re-optimisation Unlocks Value
The expanded land position allows Ausgold to re-optimise its Definitive Feasibility Study, which already demonstrated robust economics for a 10-year operation producing 1.14 million ounces of gold. The updated mine plan aims to:
- Add additional life-of-mine gold production from previously constrained areas
- Reduce mining costs by relocating waste dumps to more favourable locations
- Incorporate areas of the Central Zone that were excluded due to tenure limitations
This optimisation could significantly enhance the project’s $1.37 billion post-tax cash flow and 53% internal rate of return, based on a gold price of $4,300 per ounce.
Golden Market Backdrop
The timing couldn’t be better for gold developers. Gold prices have surged more than 26% in 2025, recently touching $3,400 per ounce amid ongoing geopolitical uncertainty and central bank buying.
Goldman Sachs Research predicts gold will reach USD 3,700 per ounce by year-end, driven by continued central bank purchases and ETF inflows. The ASX gold sector has been a standout performer, with investors seeking exposure to companies with development-ready projects like Katanning.
Strategic Financial Structure
The $35 million consideration is structured to support project development without compromising financial flexibility. Ausgold will pay $15 million by 26th August 2025, with the remaining $20 million due upon Final Investment Decision or August 2026, whichever comes first.
With $45 million cash on hand as of 31st July 2025, the company maintains a strong balance sheet to fund the acquisition and ongoing development activities. The staged payment structure aligns with project milestones and preserves capital for construction.
Market Response and Outlook
The breakthrough has attracted attention across the Australian mining sector, with investors recognising the strategic value of removing development constraints. Katanning’s location 275 kilometres southeast of Perth, combined with established infrastructure and skilled workforce availability, positions the project advantageously for rapid development.
The company expects to commence mining preparations following vendor vacation by 28th February 2027, aligning with anticipated construction timelines. First production remains targeted for late 2027, positioning Ausgold to capitalise on the current strong gold price environment.
Industry Significance
The Katanning Gold Project sits within the underexplored Katanning Greenstone Belt, which hosts some of Australia’s largest gold deposits. With the access issues resolved, Ausgold can now fully explore the district-scale potential of its 3,500 square kilometre land holding.
The project’s 1.25 million ounce ore reserve and forecast production of 140,000 ounces annually during the first four years positions Katanning among Australia’s significant new gold developments. The successful resolution of land access constraints demonstrates the value of persistence in securing critical project infrastructure.
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This transformative deal represents a turning point for Ausgold, removing the final impediment to realising the full potential of one of Western Australia’s most promising gold developments. With drilling commencing and feasibility optimisation underway, the company is well-positioned to deliver substantial value to shareholders in the current favourable gold market environment.
