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 61 000 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
Not stated.

Duration
Not stated.

Latest Developments
Kin Mining has revealed cost blow-outs of between 30% and 50% at its Leonora gold project, in the wake of the unauthorised release of a preliminary engineering report on the project, undertaken earlier this year.

Kin announced plans in May to suspend plant construction activities at Leonora, to enable the company to undertake further work after this review confirmed a cost blow-out at the processing plant.

However, at the time the company did not reveal the extent of the cost increases, saying the board at the time did not have sufficient confidence in the accuracy of the capital cost estimate.

Prior to undertaking the preliminary review, Kin undertook an internal revision of the capital cost for the Leonora gold project, which revised the capital cost estimate from the original A$35.4-million estimated in the definitive feasibility study, to A$45-million.

However, a report by Como Engineers has found that the internal review underestimated the capital cost increase by between 10% and 20%, finding that the capital cost estimate for Leonora was, in fact, closer to between A$49-million and A$53-million.

The Como Engineers report outlines 11 areas of concern, which need to be addressed by additional work, and a further six areas of concern that require further work were identified in the metallurgy report.

However, no fatal flaws have been identified in the engineering or metallurgy reports. Kin is conducting additional studies and testwork in the areas identified to advance the Leonora project to a lower risk, higher quality investment decision in the second half of 2019.

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.