Gold aspirant Kin Mining has reigned in construction of its Leonora gold project in Western Australia as it conducts a review of the operation’s development costs and timeline.
Kin has been forced into the decision because of an expected increase to the $35.4 million development cost that was forecast in last October’s definitive feasibility study (DFS) for Leonora.
Following recent changes to the company’s board, which currently sees Trevor Dixon as its acting managing director, Kin has launched a review of the Leonora project after it was realised that the DFS cost estimate would need to be updated.
“If the company had continued with the development of the Leonora gold project the potential scope of increase in capital costs would have given rise to the requirement for a significant equity capital raising to fund the increase, along with expected exploration and corporate costs, during the construction period,” Kin explained in an ASX announcement.
Kin has engaged Como Engineers to undertake the review. Como will develop new cost and time estimates, along with an implementation plan for the project.
The company’s DFS for Leonora forecast an operation that would produce 372,000 ounces (oz) of gold over a seven-year mine life.
Kin was targeting first production at Leonora in the second half of this year, with 61,000oz to be produced in the first year and annual output to peak at 65,000oz.
In the near term, Kin plans to raise around $11 million in funding that will be used to pay current liabilities, curtailed construction works, review costs, an exploration program and corporate overheads for the next six months.