Kin's scoping study proves project viability

PERTH (miningweekly.com) – A scoping study into the Leonora gold project, in Western Australia, has revealed that the project could produce some 315 600 oz of gold over a seven-year project life.

Project owner Kin Mining has projected that the project would require a capital injection of A$55-million and, based on a gold price of A$1 500/oz, would have a net present value of A$56.3-million and an internal rate of return of 30%.

Over the seven-year mine life the project was expected to generate revenue of A$461.6-million and free cash flows of A$142.7-million.

Kin MD Trevor Dixon said on Monday that the release of the scoping study was an important milestone for the company and transformed the Leonora project from being a valuable in-ground resource to potentially an economically viable mining operation.

“This study demonstrates to the market that Kin Mining has a genuine likelihood of becoming a gold producing company in the near future.”

The scoping study considered a standard truck and shovel configuration for the Leonora project and, at peak production, two separate mining fleets would be operational over several mining pits.

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

The operation was expected to deliver 30 500 oz of gold in its first year of operation, peaking at 65 800 oz in the fifth year of operation and declining to 10 500 oz during its final year.

Dixon said on Monday that the scoping study indicated that refining of the mining fleet and scheduling could have value-add implications for the project.

“We are encouraged by the overall strength of the cash flow generation possible and are now looking at ways to deliver the best outcome for the project.”