Kaminak Gold Corp. (TSXV:KAM) released a NI 43-101 feasibility study for its Yukon-based Coffee gold project.
According to the company, the study shows that Coffee is a “a robust, rapid pay-back, high margin, ten year open pit mining and heap leach project.” Kaminak thus plans to move forward into mine permitting to support mine construction, which is set for mid-2018.
Highlights of the feasibility study include:
- A pre-tax NPV5% and IRR of $762 million and 50% respectively;
- An after-tax NPV5% and IRR of $455 million and 37% respectively;
- A mine life of ten years with peak annual gold production of 228,000 ounces in project Year 4 and average, steady state, annual gold production of 193,000 ounces (Years 1-9);
- 2,157,000 ounces of gold mined at head grade of 1.45 g/t Au (Probable Mineral Reserve of 46.4 Mt at 1.45 g/t Au, containing 2.157 Moz Au.);
- 1,862,000 ounces of gold produced after average metallurgical gold recoveries of 86.3%;
- Total cash cost estimated at US$482 /oz Au (including royalties, refining and transport) and an all-in sustaining cost (as defined by the World Gold Council less Corporate G&A) estimated at US$550/oz Au, generating an operating margin of US$600/oz or 52%;
- Initial and sustaining capital costs, including contingency, for a 100% owner-operated mine are estimated at $317 million and $161 million (including $60 million in closure costs) respectively; and
- A payback of 1.5 years pre-tax and 2.0 years after-tax after the commencement of first commercial gold production;
Eira Thomas, president and CEO of Kaminak, commented:
This feasibility study firmly establishes the Coffee Project as one of the world’s best undeveloped gold projects by value and margin that works in the current gold-price environment. The Coffee Project further benefits from being a simple, open pit, heap leach mining opportunity, situated near infrastructure that delivers low all in sustaining costs and pays back capital in under two years. Kaminak feels privileged to be working in the pro-mining jurisdiction of Yukon where we enjoy strong relations with all levels of government, including our local First Nations, with whom we have worked alongside, collaboratively since 2010.
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