PERTH (miningweekly.com) – A preliminary feasibility study (PFS) into the Kal East gold project, in Western Australia, has confirmed a robust base-case production plan.
ASX-listed Black Cat Syndicate on Friday reported that 278 000 oz of gold could be recovered over a five-and-a-half-year period, based on a yearly mining rate of 56 000 oz/y.
The PFS estimated that the project would require capital investment of A$87.9-million, while the all-in sustaining cost has been estimated at A$1 510/oz. The study estimated that the project could generate revenues of A$696.1-million, and operating cash flows of A$105.9-million.
The study was based on a resource estimate of 8.2-million tonnes, containing 599 000 oz of gold, with the potential to increase the project’s output with ongoing drill programmes.
“In just four years, Black Cat has gone from a junior explorer with 80 km2 of ground and nil resources to a multi-project near-term gold producer with Kal East and the nearly finalised acquisitions of Coyote and Paulsens,” said MD Gareth Solly.
“This initial Kal East ore reserve and the base case production plan from the PFS is encouraging and shows attractive metrics from only a portion of the growing 1.3-million-ounce resource base. Our stated objective was to define an initial three-year ore reserve which has been exceeded with clear near-term growth potential.”
Solly said that recent mining cost increases have been factored into the study capital and operating costs and Kal East remains highly competitive against other operating Western Australian gold operations.
The company has deferred the decision to build the Kal East processing facility until labour availability conditions improve and allow construction to commence.
“The project is fully permitted and we will use the deferral period to further enhance the Kal East opportunity. The resources included in the base case remain open with strong potential for additional ore reserves. We are also considering options to mine and toll treat the Myhree/Boundary deposits to generate early cashflow while working on restart plans at Coyote and Paulsens.
“Coyote and Paulsens are regionally significant assets in gold-rich regions. The installed infrastructure at these projects has an estimated replacement value of more than A$140-million. The in-situ high-grade resources at each project have the potential to deliver rapid cashflow due to the anticipated low capital restart costs. Black Cat is working towards a five-year vision and plan to have all three of our operations producing gold,” said Solly.
Funding to develop the Kal East project would be required, Black Cat said on Friday, with the company noting that a capital raise would be a realistic option for the project.