Mining News: Northern Neighbors: Kaminak to permit feasible Coffee gold mine

Kaminak Gold Corp. Jan. 6 said a recently finished feasibility study indicates that its Coffee gold project in the Yukon Territory represents a robust, high-margin open pit mining and heap leach project that works in the current gold price environment. As such, Kaminak intends to proceed with mine permitting to support mine construction, which is planned for mid-2018. With C$28 million as of the end of the third quarter, the company says it is well-financed to undertake an aggressive work plan in 2016 to meet these objectives. At a gold price of US$1,150 per ounce and an exchange rate of C$1.00 to US78 cents, the Coffee base case estimate generates an after-tax net present value at a five percent discount rate of C$455 million and an internal rate of return of 37 percent. The proposed mine will operate over an initial 10-year mine-life with average annual gold production exceeding 200,000 ounces for the first five years – excluding an initial three-month ramp-up period – and average annual life-of-mine gold production of 184,000 ounces. Initial capital expenditures to fund construction and commissioning is estimated at C$317 million, with a life-of-mine capital cost of C$478 million, including C$60 million in closure costs. The all-in sustaining cash costs are estimated at US$550 per oz. of gold produced. The project is expected to have a significant impact on Yukon Territory’s gross domestic product, generating more than US$2 billion of gross revenue and contributing 480 permanent, high-paying jobs. Eira Thomas, Kaminak President and CEO 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,” said Kaminak President and CEO Eira Thomas. “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.”

- Shane Lasley