Deccan Gold Mines is sharpening its focus on critical minerals, with overseas exploration underway for tungsten in Spain and lithium in Mozambique, even as it ramps up gold production from its existing assets.
The company’s Jonnagiri gold mine is currently producing 35–40 kg of gold a month and is targeting annual production of 700–750 kg by FY28. The company also operates a gold refinery.
Speaking exclusively to businessline, Dr Hanuma Prasad Modali, Managing Director of Deccan Gold Mines, said the company would need further investment to scale up production, including the transition from its current open-pit operation to underground mining.
“Underground operation would require sinking the shafts, ventilation among others,” he said.
Jonnagiri mine targets higher production
The company plans to increase the plant’s processing capacity to 2,500 tonnes, which would require additional equipment and infrastructure. The expansion would also increase the volume of tailings generated, given that the ore currently contains only about 2 grams of gold per tonne of rock.
The company expects the underground operation to yield higher-grade ore of around 3–3.5 grams per tonne, supporting an increase in production to 700–750 kg a year.
However, he shared that the higher production would come only after about four years. Production of around 300 kg a year is expected to continue for at least four years, after which the company plans to ramp up output, either gradually or in a faster step-up, to its peak capacity of 700–750 kg.
Based on its existing resources, the Jonnagiri project is expected to have a mine life of around 12–15 years.
Kyrgyzstan project offers near-term production opportunity
Deccan Gold Mines is also looking to generate near-term production from its Kyrgyzstan project, where it sees an opportunity to process existing tailings and low-grade stockpiles.
The project had been operated for 15–20 years, leaving behind tailings containing an estimated 700–800 kg of gold. It also has around one million tonnes of low-grade stockpiles. Together with about 600,000 tonnes of material at another location, these resources could support operations for four to five years at relatively low operating costs, Modali said.
The company expects to recover around 40–50% of the gold during the crushing stage, with a further 40% recovered through the chemical leaching process. Overall recovery is expected to be around 90%. Thus, from ore containing 1 gram of gold per tonne, the company expects to recover about 0.9 grams.
Finland project targets 6–8 tonnes of gold resources
Beyond its existing gold assets, the company is also preparing to drill its gold project in Finland. The Finnish Geological Survey had previously drilled the project and identified around 4 tonnes of gold resources, Modali said. Deccan Gold Mines plans to begin drilling this month, targeting 6–8 tonnes of resources.
The drilling and feasibility work, followed by setting up processing facilities, is expected to take about two years, with production targeted to begin around 2029–30.
Company eyes ₹2,500-crore capital requirement
Modali said the company could require around ₹2,500 crore in capital over the next two to three years if half of its exploration-to-development projects succeed. The company is evaluating debt and market-based funding, while it plans to seek government subsidies for its critical-minerals projects.
“I think we have to go to the market at some point. But for the critical minerals, again, we will seek government subsidies,” Modali said.