Deccan Gold Mines has transitioned from a long-stalled explorer into a producer of gold, with the first revenue and profit now visible at its 26% owned associate, the Jonnagiri Gold Project in India, and with its 60% owned Altyn Tor mine in Kyrgyzstan set to enter full commercial production from September 2026. In Q1 FY27 (April-June 2026), Jonnagiri produced 112 kilograms of dore and 90 kilograms of bullion, sold 59 kilograms of gold, and generated Rs 87 crore of revenue and Rs 25 crore of profit after tax at the associate level. The company targets 500-600 kilograms from Jonnagiri in FY27 and 750-800 kilograms in FY28, while Kyrgyzstan is guided at 150-160 kilograms in FY27 and 300-350 kilograms in FY28, implying a combined gold output of roughly 1.1 tonnes by FY28. Jonnagiri's EBITDA margin is expected to stabilize at 65-70% within one to two quarters, underpinned by an all-in sustaining cost near $1,020 per ounce against a prevailing gold price of about Rs 150,000 per 10 grams, making the economics exceptionally strong despite the company's small equity share of the project.
The persistence of these economics rests on structural advantages that are hard to replicate quickly. Jonnagiri is India's first private gold mine in roughly 80 years, with government support including help on land acquisition and a project inaugurated by the chief minister, while the country imports about 800 tonnes of gold annually, creating a clear political and strategic rationale for domestic production. At Altyn Tor, the company has secured 1.6 million tonnes of tailings and low-grade stockpiles averaging 1.0-1.1 grams per tonne, providing four to five years of feed without the need for costly mining, and its all-in sustaining cost is $1,045 per ounce. The Kyrgyzstan government has even offered an additional gold project with about 10 tonnes of contained gold, citing Deccan's ability to obtain community support and permissions where a state company could not. These barriers are complemented by a diversified portfolio across nickel-copper-PGE, tungsten, and lithium-tantalum in India, Mozambique, and Spain, but the near-term profit engine is the two gold mines.
By mid-2028, the company should be a two-mine gold producer with a combined annual output of around 1,100 kilograms, if guidance is met. Jonnagiri is currently running at about 1,000 tonnes per day, and management is seeking approval to expand to 2,500 tonnes per day, which would support a run rate of up to 2 tonnes per year around FY29-30; the expansion approval is expected within 6-8 months from May 2026. Altyn Tor is targeting full-scale commercial production from September 2026, with the revised resource estimate due by June 2026 and a new mine design by August 2026, and underground drilling below the existing pit targeting grades above 3 grams per tonne could raise long-term output to 700-800 kilograms. Beyond gold, the Bhalukona nickel-copper-PGE project in Chhattisgarh has shown a 1.3 kilometre mineralized zone with 2.6 metres at 1.01% nickel, and management plans to submit a mining lease application by April 2027, but production there is unlikely before 2029. The Mozambique lithium-tantalum plant is targeted for end-2027, though it will initially be small at 200 tonnes per day, meaning the 18-24 month picture is defined by gold ramping, not by critical minerals.
Management has a well-documented history of over-promising and under-delivering, with every major milestone since 2023 slipping by at least a year, but the August 2026 call marks the first time actual production and sales are on the table. The company raised Rs 315 crore via a rights issue, cleared Rs 219 crore of debt, and became debt-free; it has now announced a further Rs 137 crore raise to accelerate drilling across Balukona, Logrosan, and Mozambique. The guidance for Jonnagiri was upgraded from 500 kilograms to 600 kilograms for FY27, while Kyrgyzstan was slashed from 350 kilograms to 150-160 kilograms because of commissioning delays, showing both progress and continued unpredictability. The associate, Geomysore, is not expected to pay dividends in FY27 as profits are reinvested in expansion and land acquisition, so Deccan's cash flow from Jonnagiri will only arrive later, likely from FY28-29; meanwhile, cash flow from Kyrgyzstan will come as debt repayment with 15% interest in the initial period. The company has committed to full-scale Kyrgyzstan production in September 2026, with the managing director visiting the site to finalize the date, and the Eskom-resembling winter risk remains a watch point.
The quantified earnings path for FY27 implies Deccan's share of PAT of around Rs 120 crore from Jonnagiri (26% of an estimated Rs 470 crore PAT) and Rs 60 crore from Kyrgyzstan (60% of Rs 100 crore), a combined Rs 180 crore, which would represent a massive jump from the current loss-making base. For FY28, with Jonnagiri at 750-800 kilograms and Kyrgyzstan at 300-350 kilograms, consolidated PAT could approach Rs 300 crore, assuming margins hold at 65-70% EBITDA and gold prices stay near $4,000 per ounce. The key falsifier is execution: if Altyn Tor slips into winter again or fails to achieve steady-state production by December 2026, or if Jonnagiri cannot sustain 500 kilograms for FY27, the entire thesis collapses. The second watch point is funding for the Rs 400-500 crore Bhalukona plant and the Rs 650-700 crore treatment plant, which have no committed financing, but those are further out and do not affect the 18-24 month gold ramp. The tension between rising gross margins and repeated deadline slips resolves operationally: the underlying resource quality and cost curve are real, but the company's ability to deliver on its own schedule has been the binding constraint, and that is exactly why the next two quarters of production data will determine whether this is a genuine turnaround or another chapter of missed guidance.
companyname: Deccan Gold Mines Limited ticker: DECNGOLD sector: Gold and Critical Minerals Exploration & Mining Deccan Gold Mines Limited (DGML) is India's first listed company focused exclusively on gold and critical minerals. It operates across five countries with a portfolio that ranges from producing mines to early-stage exploration. The company's history includes the Ganajur gold deposit in Karnataka, which it discovered but lost to litigation; that case is still pending in the Supreme Cou...
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FY2027 gold production guided at 600kg from Jonnagiri and 160kg from Kyrgyzstan driven by expanded mining operations and processing facility commissioning
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