Kin Mining continues to emerge as one of Western Australia’s most exciting gold mining prospects at the Leonora project in the Eastern Goldfields.
The gold development company has released the Leonora project’s definitive feasibility study (DFS), which forecast a development cost of $35.4 million to produce around 372,000 ounces of gold over a seven-year mine life.
Kin is targeting first production at Leonora in the second half of 2018. The DFS estimates that 61,000 ounces of gold will be produced in the first year, with output peaking at 65,000 ounces a year.
The operation will involve three open pits, which will supply a 1.5 million tonnes per annum (Mtpa) carbon-in-leach (CIL) processing plant. Leonora’s life-of-mine (LOM) operating cash costs have been estimated at $957 an ounce and all-in sustaining costs at $1038 an ounce.
Kin technical director David Sproule said the company had taken a conservative approach at Leonora, but it was optimistic about the foundation that the DFS set.
“It (the DFS) develops a good solid platform to cash flow and the opportunity to grow the project, both in life and output by exploration success,” Sproule told Australian Mining.
“It is good high-margin gold project that’s in an environment where I believe the price should increase over time. It also has a very modest capex with the build methodology we are using.”
The DFS predicted that Kin would pay back the $35.4 million capital costs within the first 11 months of operation, clearing the way for significant free cash flow for the company.
Sproule said the cash flow generated at Leonora would allow the company to invest in further exploration to grow the project.
“The free cash that it generates for the company will allow us to put a lot of that into the ground and really expand this project in a region that has a strong recent history of some very long life mines,” Sproule said.
“Hopefully with further exploration success, particularly expanding the high-grade zones, we should be able to significantly expand the output from the operation with little to no further capital spend.”
The DFS forecast LOM revenue of $596.1 million and surplus operating cash flow of $167.9 million.