PERTH (miningweekly.com) – An updated prefeasibility study (PFS) into the Kal East gold project, in Western Australia, has increased the project’s pre-production capital expenditure from the A$87.9-million estimated in June of last year, to A$99-million.

The 2022 PFS study estimated 278 000 oz of gold could be recovered over a five-and-a-half-year period, based on an annual mining rate of 56 000 oz/y, generating revenues of A$696.1-million, and operating cash flows of A$105.9-million.

ASX-listed Black Cat Syndicate on Friday reported that the updated study still estimated the recovery of 278 000 oz, at a rate of 56 000 oz/y on average, over a mine life of five-and-a-half years.

The updated study estimated that revenues of A$807.5-million would be generated, as well as operating cash flows of A$167.9-million after all capital and before tax.

“The updated study demonstrates that Kal East is robust and generates strong cash flow. Attractive metrics are returned from less than half of the current 1.3-million-ounce resource base. The resources included in the study remain open with strong potential for additional ore reserves,” said MD Gareth Solly.

“Paulsens represents a logical starter operation for the company to build cash flow from a proven project with a short ramp-up to gold production. Once Paulsens is up and running, we will turn our attention to building our other regionally strategic processing facilities at Coyote and Kal East potentially using internal cash flows. Our ambition to elevate Black Cat into a multi-operation gold producer is rapidly taking shape.”

The company earlier this month estimated that the Paulsens restart project would require a capital investment of A$34.3-million to bring the project back into production, with Black Cat targeting an initial production of 136 000 oz, at 4.2 g/t gold, with head grade in the top ten for Australian gold producers.

The project is expected to recover 42 000 oz/y, over an initial three years, with significant potential to increase the yearly production rate. First gold from the operation could be produced within six months from the start of process plant refurbishment, with the project expected to have a pay-back period of 14 months.