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Kingwest Resources (ASX:KWR) - CEO, Ed Turner
CEO, Ed Turner
Source: Bulls N’Bears
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  • Kingwest Resources (KWR) has completed a scoping study for the Menzies Gold Project (MGP), which is located in the Goldfields region of WA
  • The scoping study outlines a project life of 31 months and production of 3.15 million tonnes at 1.7g/t gold for 174,700 contained ounces
  • The Menzies project is expected to generate about $330 million in net revenue at a gold price of $2300 per ounce
  • The project will cost around $250.4 million with net cashflow expected to be between $64 million and $95 million
  • The scoping study will be followed by a pre-feasibility study
  • Kingwest is down 8 per cent and shares are trading at 11.5 cents

Kingwest Resources (KWR) has completed a scoping study for the Menzies Gold Project (MGP), which is located in the Goldfields region of Western Australia.

The scoping study was completed to determine the potential and viability of an open-pit mining operation and third-party toll treatment of the Menzies deposits.

Earlier this month, the company updated the MGP Mineral Resource Estimate, which now stands at 11.05 million tonnes at 1.26g/t gold for 446,200 ounces at a 0.5g/t cut-off grade.

Pleasingly, the resource update supports pit optimisation and economic studies in the scoping study with 63 per cent of proposed mined material in the measured or indicated category.

“This is a milestone moment in the short history of Kingwest. We have now demonstrated the potential economics of the MGP and the near-term production possibilities which have attractive profit margins using the current gold price,” CEO Ed Turner said.

The scoping study outlines a project life of 31 months and production of 3.15 million tonnes at 1.7g/t gold for 174,700 contained ounces. From this, 2.39 million tonnes at 2.02g/t gold for 155,000 ounces will be processed.

However, after applying a 95 per cent recovery rate, total subsequent gold production is expected to be around 147,200 ounces.

Financially, the project’s total net revenue is estimated to be $330 million using a gold price of $2300 per ounce.

Project costs are estimated to be $250.4 million, with operating unit costs of $104 per tonne processed and $1688 per ounce produced.

Net cashflow is expected to be between $64 million and $95 million, and negative cashflow will reach a maximum of $13.5 million in the fifth month.

The planned future mining operation will include major infrastructure such as a 100-man camp, haulage contractor yard, offices, workshops and change rooms, as well as a Kingwest site office.

Detailed hydrology, geotechnical assessment, and detailed waste and ore dump will be included in a planned pre-feasibility study.

Kingwest is down 8 per cent and shares are trading at 11.5 cents at 1:02 pm AEDT.

KWR by the numbers
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