PERTH (miningweekly.com) – A feasibility study into the Leonora gold project, in Western Australia, has estimated a capital cost of A$35.4-million to produce some 372 000 oz of gold over a seven year mine life.
ASX-listed Kin Mining on Monday reported that based on the current ore reserve of 7.9-million tonnes, grading 1.5 g/t gold, the Leonora project could be developed into a 1.5-million-tonne-a-year operation, with life-of-mine operating cash costs estimated at A$957/oz, and all-in sustaining costs at A$1 038/oz.
“The definitive feasibility study (DFS) clearly demonstrates the technical and economic strengths of the Leonora gold project and this solid foundation provides Kin with the opportunity to build a significant new Australian gold production company,” said Kin MD Don Harper.
“The DFS has concluded that the Leonora project will enjoy low pre-production and operating costs, which underpin a low-risk, high margin gold operation with a short payback period and strong free cash flow.”
The study estimated that the project would have a pre-tax net present value of A$107.4-million, with life-of-mine revenues estimated at about A$596.1-million, based on a gold price of A$1 600/oz. An internal rate of return of 77% has been estimated.
Harper said on Tuesday that Kin would continue to undertake an aggressive exploration programme at the Leonora project in order to expand the resource, with high-grade targets already identified.
The DFS estimated that first gold production could occur about 11 months after the start of construction and commissioning, with Kin targeting a potential deadline of the second half of 2018.