Kin Mining has suspended construction of the $35 million Leonora gold project in Western Australia due to fears of a significant cost blowout.
The company last month reigned in construction of the project as it conducted a review of the development’s costs and timeline.
Kin has received a preliminary report from Como Engineers on engineering and metallurgical aspects of the Cardinia plant site, which confirmed no fatal flaws in the facility.
However, the report did identify several elements of the processing that require additional testwork and design to optimise project returns.
The report also confirmed the board’s expectation of an increase in costs to deliver the project. An additional report from new Kin chief executive, Andrew Munckton, aligns with the findings of the Como report.
“Based on the information contained in the Como and CEO reports, the board has determined that the best path forward for the Leonora gold project is a suspension of plant construction activities until additional testwork, engineering design scheduling and cost estimates can be completed,” Kin stated in an ASX announcement.
Kin still plans to launch an $11 million capital raising in the near future to fund current liabilities, exploration, the suspension of construction and other activities.
The company will continue its exploration and drilling program while progressing additional activities to enhance and optimise the value of the project when construction resumes.