Name of the Project
Leonora gold project (LGP).

Location
The project is located in the North-Eastern goldfields of Western Australia.

Client
Kin Mining.

Project Description
A definitive feasibility study (DFS) has confirmed that the LGP is technically sound and highly profitable.

The LGP boasts indicated and inferred resources of 22.3-million tonnes grading 1.4 g/t gold for 1.02-million ounces of contained gold, and a maiden ore reserve of 7.9-million tonnes grading 1.5 g/t for 373 000 oz.

Development is based on three openpit mining centres:
• Cardinia (mainly oxide and transitional ores), which comprises the Bruno-Lewis Link, Lewis, Kyte, Helens and Rangoon deposits;
• the Mertondale area, which comprises the Mertons Reward (transitional and fresh ores), Mertondale 3-4 (oxide, transitional and fresh ores) and Tonto (transitional ore); and
• the Raeside deposits of Michelangelo and Leonardo (transitional and fresh ores).

These deposits will supply a 1.5-million-tonne-a-year conventional carbon-in-leach (CIL) processing plant, centrally located at Cardinia.

Kin envisages that all mining will be undertaken by owner-miner operators using equipment supplied and maintained by a contract mining equipment supplier. 

All drill, blast and grade-control activities will be undertaken by contractors. Kin will provide all technical and managerial direction.

The mining strategy is focused on initially delivering oxide and transitional ore sourced primarily from the Cardinia deposits.

Mining operations will include the Mertondale pits in Year 3 and Raeside material in Year 4.

The DFS incorporates the refurbishment and upgrade of the 800 000 t/y Lawlers plant, acquired from Gold Fields this year, to 1.5-million tonnes a year through the installation of a refurbished 2.5 MW ball mill and six new 1 500 m3 CIL tanks. 

The proposed plant incorporates a two-stage crushing circuit that feeds the ball mill, with gold extracted using gravity and CIL processes.

The DFS has determined that the LGP can produce an initial 61000 oz in its first full year of production, reaching maximum production of 65 000 oz in Year 7.

Potential Job Creation
The mine is expected to have a permanent workforce of about 64 people.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of A$107.4-million and an internal rate of return of 77%, with a preproduction payback of 11 months.

Value
The preproduction capital cost is A$35.4-million, which includes 18% in contingencies.

Duration
Not stated.

Latest Developments
Kin Mining is hoping to raise a further A$10.4-million for its LGP.

The company announced  a two-for-five pro-rata nonrenounceable entitlement offer priced at 8c a share on October 9. The offer price represented an 11% discount to the last trading price of Kin shares, and a 17% discount to the ten-day volume-weighted average share price.

“Since the suspension of project development activities earlier this year, Kin has set about restoring the credibility of the Leonora gold project in a methodical and progressive fashion. This raising and the planned use of the expected funds represents the next step in this process,” Kin MD Andrew Munckton has said.

The proceeds from the entitlement offer will be used to optimise the Leonora project, accelerate the exploration of new targets with the potential to deliver further significant resource growth as well as repay the outstanding $3-million Sprott facility.

The entitlement offer follows an A$11.3-million capital raise that was undertaken in May, with funds from that raising also going towards exploration at Leonora.

Kin placed the Cardinia processing plant on care and maintenance in June, after a preliminary review confirmed cost blow-outs at the processing plant.

Kin announced the curtailment of construction at the Leonora project in in April this year, warning shareholders of an expected increase in the existing preproduction capital cost estimate of A$35.4-million, after a review found that the capital cost estimate in the 2017 DFS would have to be adjusted.

A preliminary report covering the engineering and metallurgical aspects of the Cardinia plant site confirmed that, while there were no fatal flaws to the Cardinia facility, a number of elements in the processing plant would require additional testwork and design to optimise project returns.

The company has indicated that while additional work is being undertaken on the Leonora project, it will continue with its active exploration and drilling programme at the Leonora site.

“A range of technical workstreams are in progress to optimise the scope and refine the elements of the Leonora gold project. Alongside this work, Kin continues to target both significant further resource growth and a greater understanding of the gold endowment potential that the . . . project offers,” Munckton has said.

These activities are collectively targeted to ensure that the project is rapidly moved towards a revised feasibility study in late 2019 that can define a robust and highly attractive project development case, he has said.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Kin Mining, tel +61 8 9242 2227 or email info@kinmining.com.au.