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Kin Mining's engineering and metallurgy analysis for Leonora Gold Project indicates no fatal flaws

The company is working towards a development decision in the second half of next year.
Open pit at Leonora
Leonora is about 750 kilometres northeast of Perth

Kin Mining NL (ASX:KIN) has released the fatal flaw analysis engineering and metallurgy reports produced by Como Engineers for its Leonora Gold Project in Western Australia.

These reports confirmed no fatal flaws with aspects of Leonora’s proposed operation and identified several opportunities to capture additional value and reduce risk.

The junior gold developer remains focused on advancing the Leonora project to a lower-risk, higher-quality development decision in the second half of 2019.

READ: Kin Mining is derisking and optimising its +1M ounce Leonora Gold Project

Como's reports were commissioned by Kin in early April after completing the first two months of construction at Leonora, which had resulted in budget overruns.

The reports have a clearly defined scope and do not cover all components of the project that were included in the initial Leonora definitive feasibility study pre-production capital cost estimate of $35.4 million.

Como looked at Kin’s equipment list, plant layout, capital cost estimate and schedules and made several recommendations to address identified areas of concern.

Eleven areas of concern were outlined in the engineering report and a further six in the metallurgy report.

READ: Kin Mining identifies new targets for drilling at Leonora Gold Project

The engineering report was limited to analysis of the Lawlers plant dismantling and construction of the Cardinia processing plant.

The metallurgy report incorporated a general metallurgical review and reviews of design criteria, mass balance and flowsheets.

Importantly, based on the findings of the reports and its own review, Kin’s board does not have sufficient confidence in the accuracy of the project’s pre-production capital cost estimate to continue with the Cardinia plant construction.

This view is based on Como’s preliminary indications that the costs provided by Kin are underestimated by 10-20% and “a more detailed investigation into project cost estimate would need to be undertaken to formulate an accurate control budget for the project”.

READ: Kin Mining outlines $10.4 million rights issue for Leonora Gold Project

Kin’s Leonora project is in the highly prospective north-eastern Goldfields region of WA.

The project has a mineral resource of more than 1 million ounces, defined in both supergene and deeper primary mineralisation, with considerable potential to be increased with further drilling.

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