Feasibility Study

In October 2012 Kula Gold presented a Feasibility Study on the Woodlark Island Gold Project to the PNG Mineral Resources Authority.  This Feasibility Study concludes that there is a viable gold project based on pit designs optimised at a gold price of US$1200 per ounce supporting a 9 year mine life from a planned 1.8Mtpa gravity and carbon in leach (CIL) plant.

The Feasibility Study provides the foundation for permitting, financing and development of the Project.

The Project is based on 3 open pits containing Mineral Resources of 1.5 million ounces of gold. A JORC compliant Ore Reserve of 766,000 ounces was estimated by independent engineers L.J. Putland & Associate.

JORC Resource is 2.12 now million ounces of gold.

Highlights of the Feasibility Study

  • 9 Year Mine Life

    9 year life with mining inventory of 813,000 ounces

  • Ore Reserves

    Proved and Probable Ore Reserves of 10.99 Mt at 2.2 g/t Au for 766,000 ounces

  • Gold Production

    An average of 110,000 ounces of gold production over the first six years

  • Operating Costs

    Estimated year 1 to 6 cash operating costs of US$730 per ounce

  • Establishment Costs

    Total establishment capital cost of US$160 million

  • Financials

    At a US$1,600 per ounce gold price and a discount rate of 7% the Project has a:

    • Pre-tax NPV of US$237 million,
    • Pre-tax IRR of 34%
    • Capital payback period of 2.6 years

The Feasibility Study has demonstrated a low risk viable gold project based on 3 open pit mining areas optimised at a gold price of US$1200 per ounce supporting a 9 year mine life from a planned 1.8Mtpa gravity and carbon in leach (CIL) plant.

Consultancy Groups Involved with the Feasibility Study

  • Arccon Mining Services – Process Design
  • Knight Piesold – Land Based Tailings, Waste Dump Design and Water Management
  • Coffey Mining – Pit Optimisations and Pit Designs
  • LJ Putland & Associates – Pit Designs, Reserves and Mining Schedules
  • Peter O’Bryan & Associates – Geotechnical
  • Klohn Crippen Berger – Hydrology and Hydrogeology
  • Metcon – Metallurgy
  • Orway Mineral Consultants – Metallurgy
  • EBA Engineering Consultants Ltd – Deep Sea Tailings Design
  • RW Nice and Associates – Metallurgy