Kaminak ups ounces at Coffee gold project in Yukon

The update comes after a 70,000-metre infill drilling program on the four main Coffee deposits, Supremo, Latte, Double Double and Kona.

The updated estimate of mineral resources for Coffee is 52.4 million tonnes at an average grade of 1.68 g/t Au for 2,824,000 oz of contained gold in the indicated category and 42.7 million tonnes at a grade of 1.52 g/t Au for 2,088,000 oz of contained gold in the inferred category. That’s using lower cut-off grades of .5 g/t Au for oxide, upper and middle transitional zones and a 1 g/t cut-off for lower transitional and sulphide material.

The resource in the indicated category represents an almost-fourfold increase in tonnage and number of ounces (most of the prior January 2014 resource was inferred).

All field work has been completed and engineering work is underway for a feasibility study by JDS Energy and Mining expected in the first quarter of 2016. The company has redesigned and relocated the heap-leach pad, which it says will save money and reduce construction time from 22 months to 18 months, introduced two stages of crushing and has switched over to LNG to generate power on-site. Kaminak earlier announced it would get supplies to the site using a northern road route to Dawson City.

A June 2014 PEA done at US$1,250 gold showed mine construction costs of $305 million and all-in sustaining costs of US$688/oz over an 11-year mine life, with average annual production about 167,000 ounces of gold.

Kaminak Gold is well-funded, with $13.9 million in cash as of June, and has Lukas Lundin and Ross Beaty as 7.3% shareholders after the duo invested in Kaminak last summer. With 143.7 million shares out, Kaminak’s market cap at the Tuesday close of 83 cents was about $120 million.

News release: Kaminak increases grade, oxide ounces and indicated resource at Coffee

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BY JAMES KWANTES