Ann: Mt Morgan Ore Reserve Increases 16% to 1.4Moz, page-25

Just on some tailwinds that might help things along the way.

There are some shallow high grade sections in the upper ore body at Beresford that previously didn’t form part of the UG reserve. I suspect being near the first stopes they will have been captured into the new ore reserve and will be mined early in the mines life. Below are some drill interesects from this section of the ore body with a link to the announcement.

“High‐grade intersections from outside the planned upper levels of the Beresford Underground mine/Ore Reserve, between 100‐200m below surface, include:
- 7.0m @ 31.0g/t Au from 174.0m
- 1.7m @ 56.5g/t Au from 189.0m
- 1.9m @ 46.8g/t Au from 288.0m
- 2.9m @ 9.4g/t Au from 198.0m

These high grade zones outside the existing upper levels of the Beresford Ore Reserve (e.g. 7m @ 31.0g/t Au) show the potential for additional early production sources

Drilling confirms previous geological interpretations while also highlighting the opportunity to consider bulk mining in certain areas where combined intersections from parallel BIF units produce thicker intercepts (e.g. 16.7m at 7.0g/t Au)”

https://www.daciangold.com.au/site/PDF/1235_0/HighgradeIntersectionsOutsideBeresfordOreReserve

Also in July 2017 the company hedged 52,000ozs of gold at A$1,782/oz. My feeling is that by the time this hedge is exhausted the A$ gold price will be consistently trading at or over this level so in anycase the company will have read the tea leaves pretty well as far as far as the gold price goes, IMO.

https://www.daciangold.com.au/site/PDF/1231_0/DacianCapitalisesonStrongGoldPriceHedging52000oz

Thirdly, a lot of the costs arise from the processing plant (the UG mining costs are relatively low and should be fairly consistent considering the number of declines and the consistency of the ore body. The recent announcement said the company was considering a fourth decline at Westralia) and DCN elected to use a gas fired power station option on a tariff model over 8 years which no doubt must be cheaper than diesel generators over LOM IMO.Esh