PERTH (miningweekly.com) – A prefeasibility study (PFS) for the King of the Hills gold project, in Western Australia, has estimated a capital cost of A$218-million to develop an openpit mine supporting a long-term bulk mining operation.

Underpinned by a maiden openpit mineral reserve estimate of 1.45-million ounces, ASX-listed Red 5 on Thursday said that the project could support an average annual production of 140 000 oz over a mine life of ten years.

The PFS is based on the construction of a four-million-tonne-a-year carbon-in-leach processing plant on site, which would provide the processing capacity for the integrated King of the Hills bulk mining strategy, consisting of the King of the Hills openpit operation, satellite starter pits, as well as maintaining or expanding output from the existing bulk underground mine.

The PFS estimated an average annual all-in sustaining cost of A$1 167/oz over the life of the mine.

Red 5 MD Mark Williams said that the delivery of a maiden Joint Ore Reserves Committee-compliant openpit ore reserve, and the supporting PFS, was a significant milestone for the company, marking a key step towards realising the objective of transforming Red 5 into a substantial midtier gold producer with a diversified production base and production profile.

“To put the PFS numbers into perspective, King of the Hills now has a bulk mineral resource for the eastern margin contact zone of 3.11-million ounces, inclusive of a maiden openpit ore reserve of 1.45-million ounces, and has the potential to become Western Australia’s next significant gold mine.

“This openpit PFS is a key stepping-stone, setting a firm foundation for us to unlock the broader value at King of the Hills by developing an integrated openpit and underground bulk mining operation.”

Williams said that the PFS would be used as the basis for a final feasibility study, which will also incorporate concurrent bulk underground mining as well as satellite starter pits, to provide a more complete picture of the project.

“The final feasibility study will also include the bulk underground resource, which currently stands at 1.1-million ounces, the regional oxide resource, as well as any additions to the resource base as a result of ongoing underground and regional exploration programmes.”

The final feasibility study is scheduled for completion in mid-2020.