High-Grade Hits Add to Kin Mining Leonora Gold Story
THE INSIDE STORY: Most junior mining companies – not to mention shareholders – would be very pleased to be able to consider commissioning a new mine in a little over five years after listing on the Australian Securities Exchange. By Ron Berryman
Kin Mining (ASX: KIN) chairman Trevor Dixon is confident his company’s aggressive drilling campaign has delivered the right resources from the company’s Leonora Gold Project to take it from explorer to producer within that timeframe.
Dixon explained that when the company listed in 2013 the Initial Public Offering (IPO) included the Desdemona, Iron King, Randwick, Mt Flora, Murrin Murrin and Redcastle projects but the real excitement came when Kin was able to acquire the Leonora gold project.
“It slotted perfectly into the middle,” Dixon told The Resources Roadhouse.
“It was a beautiful fit for our business and this has been demonstrated by the outstanding results we have achieved through a vigorous drilling campaign.
“We’re extremely pleased with the land holding we have and we’re continuing to build on it.
“We see that as our real strength – we have a project we can develop and we have additional regional holdings that contain a robust pipeline of exploration and development projects.”
The Leonora gold project is located about 30 kilometres northeast of Leonora.
The Kin Mining project has three main areas:
Mertondale with current Indicated and Inferred resources of 5.59 million tonnes at 2.2 grams per tonne gold for 395,000 ounces of gold;
Cardinia – 4.68 million tonnes at 1.3g/t gold for 192,000 ounces of gold; and
Raeside – 1.57 million tonnes at 2.6g/t gold for 134,000 ounces of gold.
The project has a combined total of Indicated and Inferred Mineral Resources of 11.8 million tonnes at 1.9g/t gold for 720,000 ounces of gold.
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Kin mining has agreed to purchase an 800,000 tonnes per annum gold plant and expects to finish its Definitive Feasibility Study (DFS) by the end of August with plans to commission the mine by the end of 2018.
Dixon explained that when the company had listed in 2013 it immediately instituted a five-year plan.
“That’s how we like to run our business,” he said.
“We wanted to establish a clear, definable model.
“Our first five-year plan was to define enough resources to take into mining.
“We have achieved that and we are now embarking on a second five-year plan which is to achieve a highly profitable 50,000 to 100,000 ounces per annum mining operation.
“We have a development strategy and we have just completed an extensive program of Resource drilling.
“The results have been exceptional and for that reason we’ve extended the DFS to allow those figures to come in to build a more robust proposal for our project finance.
“It’s the conversion of the 720,000 ounce Resource base into Ore Reserve that’s most important to us now – that’s the key driver.
“It’s not the number of global ounces that we have as a business, it’s the amount of ounces we can take into an operation that can be demonstrated to be profitable ounces.
“We’re aiming to bring some 250,000 to 300,000 ounces into an operation that can be classified as profitable ounces.”
Recent drill results at Cardinia revealed this area to host multiple large gold systems that are underdeveloped.
High-grade primary mineralisation discovered beneath an extensive three kilometre long supergene blanket at the Lewis deposit delivered outstanding high-grade primary intersections from a Reverse Circulation (RC) drilling program, including:
16 metres at 37.6g/t gold from 47m, including 5m at 117g/t gold;
13m at 14.3g/t gold from 49m, including 3m at 50.7g/t gold;
17m at 6g/t gold from 20m, including 2m at 44.7g/t gold;
15m at 3.4g/t gold from 58m, including 2m at 21.3g/t gold; and
4m at15.3g/t gold from 33m, including 1m at 55.5g/t gold.
The recent RC drilling program at the Lewis deposit combined with historic drilling defined a mineralised structure that is estimated to have a strike length of at least 500m.
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Lewis had previously been regarded as being highly prospective for shallow, free-digging supergene gold mineralisation, however recent primary intersections suggest that the supergene resources could represent the top of a large mineralised shear system with potentially significant higher grade mineralisation at depth.
Drilling at the Fiona prospect also revealed additional primary zone targets with hits of up to 283g/t gold.
Highlights included:
8m at 51.4g/t gold from 10m, including 4m at 101g/t gold, including 1m at 283g/t gold;
9m at 6.1g/t gold from 21m, including 3m at 12g/t gold;
4m at 7.4g/t gold from 10m, including 3m at 9.5g/t gold;
10m at 3.6g/t gold from 25m; and
4m at 4.1 g/t gold from 24m, including 2m at 6g/t gold.
More recent follow-up drilling confirmed the high-grade nature of a southerly plunging shoot with indications of a potential further deeper shoot.
Highlights included:
30m at 2.4g/t gold from 20m, including 3m at 5.8g/t gold and 4m at 6.2g/t gold;
17m at 3.2g/t gold from 31m, including 4m at 5.1g/t gold;
9m at 3.5g/t gold from 31m, including 1m at 23.3g/t gold; and
1m at37.6g/t gold from 20m.
“So far, we have effectively tested the mineralised shoot at Fiona to a maximum depth of just 50 metres below surface, and there is excellent potential for this to continue at depth,” Dixon said.
“We are now incorporating Fiona into the Helens Mineral Resource, which is currently being updated.”
Kin has completed more than 30,000 metres of resource drilling on the project within the past 12 months focussed primarily on open pit resources.
What has emerged is a pattern demonstrating the resources are constrained to the amount of drilling that has taken place.
“What we are finding is the more you drill the more you find,” Dixon said.
The company recently raised $10.2 million through a share purchase plan and placement to fund further extensive RC drilling campaigns and complete the project Feasibility Study.
Kin Mining has exercised an option to purchase the Lawlers Carbon in Leach (CIL) gold plant for $2.5 million, which offers a lower capex and faster build than a new plant.
The DFS will also review the option to upgrade the plant to increase its capacity to 1.2 million tonnes per annum.
“We’ve just finished up an extensive drilling campaign and couldn’t be happier with the results, and we may see a bump in grade in our key resource areas,” Dixon said.
“Furthermore, the Feasibility Study is nearing completion which will deliver the platform needed to demonstrate the true value of the LGP.
“We have also just finalised the purchase of the Lawers plant so we now have all the components to pour gold bars.”
Kin Mining NL (ASX: KIN)
…The Short Story
HEAD OFFICE
342 Scarborough Beach Road
Osborne Park
Western Australia 6017
Ph: +61 3 9242 2227
Email: info@kinmining.com.au
Web: www.kinmining.com.au
DIRECTORS
Trevor Dixon, Donovan Harper, David Sproule, Joe Graziano