Kingsgate Consolidated Limited (ASX: KCN) is pleased to provide a summary of the results of the Definitive Feasibility Study (“DFS”) of the Nueva Esperanza silver and gold heap leach project in Chile. The study supports the technical viability and financial robustness of the project as well as identifying further upside potential within the existing resource base and the already identified exploration targets within the Mining Lease.
- Proved and Probable ore reserves total 17.1 million tonnes at 97 g/t silver and 0.27 g/t gold (113 g/t silver equivalent (AgEq) or 1.89 g/t gold equivalent (AuEq))
- Average annual production of 7,500,000 oz of AgEq (approximately 125,000 oz AuEq)
- Initial +6 year mine life with significant potential for extensions
- Capital costs of US$140 million including a US$10 million contingency
- Average cash operating costs of US$11.44/oz AgEq or US$687/oz AuEq (incl. royalties)
- First production is targeted in first half of 2016 calendar year
Kingsgate is currently working with its consultants to finalise environmental approvals. This process is well advanced and final approvals are expected within six months.
The DFS also provides the basis to assess the optimum financing strategy for the project. Discussions are underway with potential debt financiers with several financing options being considered.
Gavin Thomas, Kingsgate’s Managing Director and CEO said, “We are delighted by the results of the feasibility study, which support our long held belief in the underlying quality and inherent value of the Nueva Esperanza project.
The final Nueva Esperanza Definitive Feasibility Study is a result of over three years continuous evaluation and several iterations to determine the optimal process route delivering the most financially robust outcome.”
“We remain optimistic in the mineral endowment of the immediate vicinity, which has the potential to provide Kingsgate with a long, sustainable operating presence in this region.”
“The decision to begin construction is anticipated in the second half of this year and will put Kingsgate back on a growth path and validate the underlying value of the project acquisition”, he said.