PERTH (miningweekly.com) – A scoping study into the Coyote gold project, in Western Australia, has found that the project could support the production of 200 000 oz over a mine life of five years.

ASX-listed Black Cat Syndicate on Tuesday reported that on average, the project was expected to recover 44 000 oz/y, with peak production to reach around 55 000 oz/y in years three and four.

The scoping study estimated a pre-production capital requirement of A$80-million, with all-in sustaining costs estimated at around A$1 586/oz, which is in the lower third of Australian gold producers. The study also estimated that the project would generate revenues of A$565-million and would have an internal rate of return of 60% at a gold price of A$2 900/oz.

Black Cat told shareholders that the capital requirements for the Coyote project could be funded from cashflow generated at the Paulsens operation.

“Like Paulsens, Coyote has established infrastructure that allows a low-risk restart with a short timeframe to recommencing operations. From only five months of drilling since acquisition we have defined a five-year mine life at a sustained processing rate 25% higher than previous operations,” said Black Cat MD Gareth Solly.

“Known mineralisation outside the current Coyote central resource, proximal to proposed underground development, will be targeted in future drill programmes. The processing rate in the study is conservative and is limited by the throughput capacity of the carbon-in-leach (CIL) circuit.

“Debottlenecking the CIL circuit will enable the mill to process up to 700 000 t/y and expedite cash flow from stockpiles generated in years one and two of mining, containing over 45 000 oz. Future studies will refine processing facility design and mining schedules to optimise cash flow,” said Solly.

“Further near mine and regional discovery drilling has the potential to sustain and increase processing rates. Based on the positive results of this scoping study, we expect to complete additional targeted drilling as we progress to a more detailed restart study. Once Paulsens is in operation, focus will shift to potentially sequentially developing Coyote and then Kal East.

“Our intention is to partially or fully fund future development with cash flow generated from Paulsens,” Solly added.

The recently released re-start study at Paulsens estimated that it would require a capital investment of A$34.3-million to bring the project back into production, with the company targeting the recovery of some 42 000 oz/y over an initial three years.