Monday, 6 February 2012

Kentor Gold: Murchison project on schedule for June 2012 first gold pour milestone

Kentor Gold (ASX: KGL) is set to join the ranks of Australian gold producers in less than five months, with the company on schedule for the first gold pour from the Murchison gold project in June 2012.

Initial production rates are forecast at 24,000 ounces per year from a combination of open pit and underground mining - and based on the current US$1720 spot price this would create gross revenue of over US$41 million in the first year of operation.

The first phase of production always has a higher cost due to lower throughput rates, but can often be quickly brought down, with Kentor forecasting a cash operating cost of A$1,223 per ounce - which still allows for a significant margin.

Kentor said, 'While (cash operating costs) high due to the low initial throughput rate of the process plant, the cost is expected to reduce significantly in the second phase with the small additional capital cost and in the subsequent phases.'

The first ore to be processed has on average 3 grams per tonne (g/t) gold.

Growth strategy planned

The restart of the CIL Plant will include the conversion from CIP to CIL, expanding to 260,000 tonnes per annum, which includes a capital cost $14.8 million ($2 million spent already).

Kentor has outlined the growth strategy for the Murchison gold project, which includes; the refurbishment and restart existing CIL Plant; add a heap leach circuit to treat low grade ore; expand plant to 500,000 tonnes per annum; flotation of copper gold ore.

Murchison gold project - strategically located and ready to roll

The Murchison gold project located in Western Australia, is the new name for the Burnakura and Gabanintha sites, which currently host an Inferred Resource of 15.1 million tonnes at 1.5g/t gold for 719,000 ounces.

Exploration is moving forward at speed, with a 20,000 metre reverse circulation program underway aimed at infilling then building the resource.

Key personnel ready for action

Simon Milroy, managing director of Kentor, told Proactive Investors today that the all key personnel required to elevate the company to producer status have been appointed.

Recruiting in the Murchison can often be difficult due to the high demand and low supply, but Kentor now has on board a General Manager, Mining Manager, Process Manager and a Commercial Manager.

Adding to this experience, operational roles will be filled over the next three months as Kentor builds to the first pour.

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