Kin Mining pushes reset button on Leonora gold project
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The new boss of junior explorer Kin Mining says the company is taking a more conservative approach to the development of its Leonora gold project in Western Australia.
Kin (ASX:KIN) revealed in April that it was dialling back the construction works at Leonora after a review found the company would need to spend more cash than the $35.4 million outlined in the October 2017 definitive feasibility study.
“Kin is in reset mode,” new managing director Andrew Munckton told Stockhead on the sidelines of this week’s Diggers & Dealers Mining Forum in Kalgoorlie.
“Kin headed down the relatively cheap, fast-track route. I come out of operations so I’m much more conservative about that.
“We suspended the construction because the construction got ahead of all the inputs to the process plant.”
Mr Munckton was appointed as managing director in April after Don Harper quit the role a couple of months earlier.
Mr Harper told Stockhead shortly after he tendered his resignation that he quit because he lost the support of the board while attempting to keep another director from being booted out.
Kin was facing a potential board spill from former chairman Terrence Grammer, along with former non-executive director Marvyn Fitton and Orbit Drilling, but that went away when the director in question, David Sproule, also resigned.
Since then an external review of the Cardinia plant construction plan confirmed there were no fatal flaws, but Kin has needed to revisit areas such as the ore and water supplies.
The company says it has identified “several opportunities” to improve returns and reduce risk.
“That’s a block of work over the next 12 to 18 months to determine exactly what that cost of the construction of the plant that’s left to go is going to be,” Mr Munckton explained.
“We’ve spent about $10 million on the construction so far and all of that will be useful in the reconfiguration of the project.”
Kin recently raised $11.3 million to help it expand the resource and more thoroughly define the ore supply and mine plan.
The most recent drilling was done at the Helens prospect to test mineralisation at depth. The current resource only extends down to about 70m and drilling has now been undertaken down to 150m.
Kin expects to deliver an upgraded resource in the first week of September.