Carnavale’s BFS points to high-grade Kookynie gold production

• Maiden reserve underpins high-grade Swiftsure and Tiptoe starter pits
• Contract mining and regional processing shape the proposed development
• Underground studies, approvals and funding remain ahead

Special Report:Carnavale Resources could generate cashflow from high-grade, low-capex open pits at its Kookynie gold project about 60km south of Leonora, WA, with production targeted to begin in H2 2027, according to a bankable feasibility study (BFS) released today.

Under the study, about 220,000t of ore with an average grade of 5g/t, containing 35,600oz of gold, will be mined over 18 months from the proposed Swiftsure and Tiptoe starter pits.

This is forecast to produce $104m in pre-tax free cash flow while net present value and internal rate of return are $87m and 417% respectively, using a base-case gold price of $6000/oz.

AISC is forecast at A$2,721/oz, with pre-tax payback in month 10 of operations.

Peak funding is estimated at A$24m, including A$2.4m in pre-operating capital.

Carnavale Resources (ASX:CAV) holds an 80% interest in the Kookynie Gold Project, with joint venture partner Western Resources holding the remaining 20%.

The BFS production and financial forecasts are presented on a 100% project basis.

High grades meet regional processing

Kookynie is modelled as a contract mining operation that will truck ore to a third-party processing plant, avoiding the need to build a dedicated plant for the starter mine.

The BFS assesses conventional carbon-in-leach processing options and assumes a 100km haulage route in its financial model; a processing agreement remains to be secured.

Mining and haulage contractors are also yet to be selected, with a competitive tender process planned.

About 70% of the 35,600oz maiden ore reserve is proved and 30% probable, with scheduled pit ore sourced entirely from higher confidence measured and indicated resources.

This is part of the broader resource of 855,000t at 4.4g/t, or 120,000oz of contained gold.

Swiftsure makes up a significant chunk of this, hosting a high-grade zone of about 60,000t grading more than 29g/t for 56,000oz.

Gold mineralisation is mainly associated with quartz veins near diorite and dolerite contacts, with steeply plunging high-grade shoots.

Both deposits remain open at depth and along strike.

A starter stage with deeper potential

CAV intends to use cash flow from the open pits to support possible underground development at Swiftsure.

The underground opportunity is excluded from the BFS, and no underground reserve has been declared.

A refreshed scoping study retains the previous 47,000oz underground production target and estimates potential pre-tax free cash flow of A$111m at A$6000/oz.

The shallower BFS pit design leaves about 11,000oz of indicated resources beneath Swiftsure outside the pit reserve and not included in the refreshed underground target.

CAV expects technical work to assess the underground potential and those resources to be completed in the first half of 2027.

The company has submitted applications for key environmental approvals and expects decisions in the first half of 2027.

Open-pit production is scheduled to start in the second half of 2027, subject to statutory approvals and a positive final investment decision; processing arrangements, contractor agreements and project funding are still to be secured.

This article was developed in collaboration with Carnavale Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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