The project is forecast to produce at an average rate of 55,000 ounces of gold per annum from its JORC resource of 1.02 million ounces and JORC ore reserve of 373,000 ounces.
The resources are spread across three deposits, Mertondale, Cardinia and Raeside - all which show good potential for resource growth.
With the AUD gold price near its all-time highs at A$1,750 per ounce, Kin has timed its move into production very well.
Awarded the 2017 “Best Emerging Company” at Diggers & Dealers
LGP sets a solid foundation for Kin who was awarded Best Emerging Company at the renowned Diggers & Dealers resources conference in 2017.
The definitive feasibility study (DFS) confirms LGP will be a high margin gold mine:
• Pre-production capital cost of $35.4 million including 18% contingencies;
• Pre-production capital payback period of 11 months;
• Estimated annual production of 55,000 ounces per annum over 7-year mine-life;
• Life of mine (LOM) all-in-sustaining cost (AISC) of A$1,038 per ounce; and
• Pre-tax net present value (NPV) of A$107.4 million.
Leveraged to a rising gold price
The project’s DFS valuation used a gold price of A$1,600 per ounce meaning when the gold price is above this level, the project’s value increases.
Significantly, using a gold price of A$1,750 per ounce, the NPV increases 35% to $145.8 million.
The LGP’s value is further highlighted by its AISC cost of A$1,038 per ounce of gold produced, which clearly highlights the high-margin project.
Exploration continues in tandem with construction
Kin continues to pursue its aggressive drilling campaign as Kin ramps up to production.
Drilling has commenced at the group’s Kyte orebody to extend on its indicated resource of 21,000 ounces of gold.
Expanding the JORC resource can increase project economics
Defining and increasing the mineralisation at Kyte aims to enhance the project economics and, in turn, provide the opportunity for early payback of the debt facility.
Increasing the resource at Kyte will also provide greater flexibility within the mine plan.
Drilling is also planned at other prospects where high-grade gold was encountered in 2017.
Kin’s interim managing director Trevor Dixon said: “Significant exploration is underway on Kin’s highly prospective tenure, giving an exciting opportunity to grow our project.
“The LGP is a project that, given its favourable economics, is set to be a low-cost gold producer with considerable upside for shareholders.”