Kaminak de-risks Coffee; revives exploration roots
Last updated 5/15/2016 at Noon
Kaminak Gold Corp. May 5 posted a C$29 million budget for the 2016 program at its Coffee Gold project in Yukon Territory.
Nearly half of the 2016 budget (C$13.9 million) has been allocated to mine permitting; another C$6.2 million will be spent on pre-development and advanced engineering; and C$5 million has been earmarked for exploration.
The remaining funds will be set aside for general and administrative expenses, marketing and the opening of offices in Whitehorse and Dawson City.
A January feasibility study for Coffee indicates the C$317 million open-pit, heap-leach gold project would repay capital in two years and produce 184,000 ounces of gold annually over a 10-year mine life at all-in sustaining costs of US$550/oz. Kaminak expects mine permitting to start in the third quarter, with the goal of receiving all permits required to begin construction at Coffee by the second half of 2018.
Anticipating a roughly 18-month construction period, the company hopes to produce first gold at Coffee by year's end 2019.
Significant resource expansion potential remains both proximal to the main resource area and across the 150,000-acre Coffee property.
A C$2.6-million initial phase of drilling focused on testing new targets and expanding previously drilled nearby discoveries, but not included in the current mine plan, will begin in the coming weeks.
Priority targets include step-out drilling on known gold-bearing structures such as Supremo T3, which contributes more than one million ounces to the proposed Coffee mine plan and remains open along strike and to depth.
Proceeds of C$14.4 million from the exercise of 13,719,512 warrants issued as part of an October 2015 private placement will provide Kaminak with sufficient capital to carry out its 2016 work plans and end the year with roughly C$9 million.
"Initiating the permitting process for our first gold mining opportunity remains a top priority, but exploration to realize some of the significant resource expansion potential that exists proximal to the main resource area and regionally within the under-explored Coffee gold district, is also an important theme.
We are excited to be getting back to our exploration roots and focused on making new gold discoveries in 2016," explained Kaminak CEO Eira Thomas.