Milestone Moment For Western Australian Gold Miner
Kingwest Resources Limited (ASX: KWR) has completed a positive Scoping Study at the Menzies Gold Project (MGP), located on the Goldfields Highway approximately 130km north of Kalgoorlie in Western Australia.
This Scoping Study is on the open pit mining and third-party toll treatment of the Menzies gold Mineral Resources. It does not consider possible future high-grade underground resources.
The company has recently completed an extensive infill drilling campaign in conjunction with its exploration activities. The infill drilling has facilitated the completion of new Mineral Resource Estimates (MRE’s) which underpin this Scoping Study.
CEO, Ed Turner, said the positive results of this Scoping Study support further work on assessing the potential economic exploitation of the MGP.
“This is a milestone moment in the short history of Kingwest,” Mr Turner said.
“We have now demonstrated the potential economics of the Menzies Gold Project and the near-term production possibilities which have attractive profit margins using the current gold price.
“This is a culmination of dedicated and focussed exploration over the last 18 months by our small team who will continue to search for further additions to these near surface resources in order to continue to add value to the Project.”
Estimated values of key parameters of the Kingwest Scoping Study include:
- Recent Mineral Resource Estimate (MRE) update provides high confidence in Scoping Study outcomes with 63% of proposed mined material in Measured or Indicated JORC category
- Project life of 31 months
- The first year of production will include 76% of the material in the Indicated category
- Production of 3.15Mt @ 1.7g/t Au for 174.7k contained oz Au
- Trucking and third-party toll treatment of 2.39Mt @ 2.02g/t for 147.2k recovered ounces
- Mining open pits contains oxide, transition and fresh ore sources
- Metallurgical test work samples provide gold recoveries between 93% to 99%
- Estimated Net revenue (after royalty payments) of A$330M at A$2,300/oz and 95% recovery
- Net cash flow from the project estimated to be between A$95M and A$64M, EBITDA
- An estimated unit operating production cost of A$1,688/oz Au
- Maximum Negative Cashflow of $13.5M in month five,
Mr Turner said the positive Scoping Study has highlighted the strong economic case for recommencing open cut mining at Menzies. All of the Mineral Resources included in this study are within granted Mining Leases.
The total estimated net revenue for the project is estimated as A$330 million using a gold prices of A$2,300/oz.
Total costs for the project were estimated as A$250.4M with total operating unit costs of A$104/t processed, and A$1,688/oz produced. The estimated free cash produced is between A$95M and A$64M with the maximum negative cashflow of A$13.5M occurring in month five with the mining lasting 31 months in total. The mining material included in this study includes 63% in Measured or Indicated JORC category.
