Goldfields project developer Kin Mining (ASX:KIN) has taken a step closer to their production goals with an application for mining at Cardinia lodged early this week.
The junior miner anticipates a start to production at the Leonora Gold Project within 12 months, kicking off with the indicated +120,000oz Bruno-Lewis Resource.
Acquired from the administrators of Navigator Resources in late 2014, Kin Mining’s Leonora Project holding contains three project areas with JORC 2012 compliant resources totalling 722,000 ounces and a further 282,000 ounces outside of existing pit-shell designs.
Speaking at the 2015 Sydney Resources Round-up, managing director Trevor Dixon said the Bruno-Lewis resource offered a strategic advantage for fast tracking to profitable production with the exploration and pre-feasibility study already completed by Navigator.
“We’re ahead of schedule on our initial five year plan,” Dixon said.
“We will fund our operations going forward via the Lewis project, which is a low-cost, near-surface oxide ore body, it’s a free-dig inexpensive exercise looking to produce gold at $730 per ounce, leaving us with a healthy margin.
“All-in sustaining costs should come in at around $1000 per ounce.
“Our cash cost summary tells us we should produce $3.2 million worth of free cash over the first 12 month period.
“We’re currently in the permitting stage and anticipate entering the excavation phase in first quarter 2016.”
Dixon said the project was acquired for approximately $3 per resource ounce, with a purchase price of $2.7 million.
“All the drilling was done by Navigator, in fact in the past Lewis has been subject to three mining approvals which was why it was so compelling, it was the shortest route to productive cash flow,” Dixon said.
“That’s real coup for us, given that to drill out, assay, get JORC compliance, would certainly cost more in the order of $6-8 per resource ounce.
“We’ve constrained ourselves to open-pitable resources, and believe it’s amenable to low cost vat leaching methods, which will keep our processing costs down in the trial mining period.”
The Leonora Project has a history of successful mining dating back to the 1890’s with the Merton’s Reward prospect, a resource which produced 60,000 ounces at an average grade of 21g/t, and still contains indicated resources of more than one million tonnes at 2.7g/t.
“We’ve only just listed really, after 20 months, but we’re really quite happy with where the business lies, it’s solid resource base,” he said.
Image: Kin Mining managing director Trevor Dixon, Non-executive director/company secretary Joe Graziano.