Leonora needs A$35m for development

PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Leonora gold project, in Western Australia, has estimated a capital cost of A$35-million, owner Kin Mining has revealed.

The PFS estimated that the project will have an initial mine-life of six-and-a-half years, with production expected to reach 43 000 oz in the first year of operation, and ramp up to 52 000 oz by the third year.

The study is based on the development of three openpit mines, supplying a centrally located 750 000 t/y conventional carbon-in-leach processing plant, which will expand to a 1.2-million-tonne-a-year capacity by year three of operations.

Some 6.8-million tonnes of ore, grading 1.5 g/t gold, will be processed at the Leonora operation, delivering 309 000 oz of gold.

Leonora is estimated to have a pre-tax net present value of A$71-million.

Kin CEO Don Harper said on Thursday that the PFS highlighted the technical and economic strengths of the Leonora project, making it the foundation on which to build a significant new Australian gold producer.

“The study shows that the Leonora project will enjoy low up-front costs, which will, in turn, underpin a low-risk, high-margin operation with a short payback period of 18 months.”

Harper said that the strategy will enable Kin to generate early profits and accelerate production, while at the same time allowing the company to grow mine life through an aggressive exploration programme.

The project will now move to the feasibility study phase, which will be completed by mid-2017. A 17 000 m drilling programme to convert inferred mineral resource to the indicated category will also get under way.

Should the feasibility study prove positive, first gold at Leonora will likely be produced in mid-2018.