Name of the Project
Leonora gold project.

Location
The project comprises the Mertondale, Cardinia and Raeside areas in the Mt Margaret mineral field, in the centre of Australia’s Eastern goldfields.

Client
Kin Mining.

Project Description
A scoping study has shown that it could produce an estimated 315 600 oz of gold over a seven-year project life.

It envisages a standard truck-and-shovel configuration.

At peak production, two separate fleets will operate – a 100 t excavator (Komatsu PC1250 or similar), paired with 90 t rigid body dump trucks (Cat 777 or similar); and a smaller 75 t excavator (Cat 374 or similar), paired with 40 t articulated trucks (Cat 740 or similar).

The larger mining fleet will operate in the large, but simple-to-mine pits of  Mertondale 3/4, Mert’s Reward, Tonto, Eclipse and Michelangelo/Leonardo.

The smaller mining fleet will be used in the remaining mining areas, which are narrow (entire mining area or cutback) in nature.

Once on site, there might be adequate flexibility to use either fleet in a particular area to produce the best outcome, such as prestripping waste using the larger fleet or at the base of the larger pits using the smaller fleet.

Processing will start two months after mining to allow for a build-up of stockpiles. At steady-state production, the processing plant will run at a throughput rate of one-million tonnes a year.

The operation is expected to deliver 30 500 oz of gold in its first year of operation, peaking at 65 800 oz in Year 5 of operation and declining to 10 500 oz in its final year.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Based on a gold price of AS1 500/oz, the project will have a net present value of A$56.3-million and an internal rate of return of 30%, with a payback of 45 months.

Value
An estimated A$55-million will be required to complete the project.

Duration
Not stated.

Latest Developments
Kin is hoping to raise A$3.8-million through a nonrenounceable rights issue. The company plans to place a maximum of 17.2-million shares, at 22c each, to raise the funds.

Sydney-based investment firm Kamara Group has agreed to underwrite the rights issue.

Proceeds from the rights issue will be used aggressively to pursue the company’s growth strategy to develop the Leonora gold project, expand the exploration programme, start definitive feasibility work at Leonora, and establish sufficient working capital.

The company would also pay out secured creditor Waterton Global Value for the acquisition of the Leonora project.

Earlier this month, Kin poured its first gold at the project as part of a trial mining programme at the Lewis deposit.

Trial mining at the deposit will assist in updating the feasibility study by enabling Kin to visually observe the structural controls on the mineralisation within the openpit, determine and apply realistic modifying parameters to move from resource to reserve, and determine optimal geotechnical parameters. Kin will also gain an understanding of soft oxide materials' handling through the mill, be able to verify ore grades and total gold recovery, and provide bulk samples for low-grade heap leaching work.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Kin Mining, tel +61 8 9242 2227 or email info@kinmining.com.au.