Kairos Minerals Charts $574M Free Cash Flow Potential at Mt York Gold Project
Kairos Minerals has unveiled a robust scoping study for its Mt York Gold Project, projecting strong financial returns and gearing up for a major drilling campaign to expand its 1.4 million ounce resource.
- Scoping Study forecasts $574M free cash flow and $410M NPV at 5% discount
- 4 Mtpa processing plant with $276M pre-production capital estimated
- Planned 20,000-30,000m drilling program to grow and upgrade resources
- Cash position of $12.36M with an additional $10M expected from Pilbara Minerals
- Ongoing negotiations with Nyamal Aboriginal Corporation for mining lease
Robust Financial Outlook from Scoping Study
Kairos Minerals (ASX: KAI) has delivered a highly encouraging quarterly update, highlighted by the completion of a scoping study for its flagship Mt York Gold Project in the Pilbara region. The study, based on a conservative gold price of A$3,500 per ounce, outlines a technically and financially robust project with a projected free cash flow of A$574 million and a net present value (NPV) of A$410 million at a 5% discount rate. The internal rate of return (IRR) stands at an impressive 35.7%, with a payback period of just 2.7 years, underscoring the project's strong economic potential.
The study favours a 4 million tonnes per annum (Mtpa) conventional carbon-in-leach (CIL) processing plant, requiring an estimated pre-production capital expenditure of A$276 million. Over an eight-year mine life, the project targets production of approximately 657,200 ounces of gold at an all-in sustaining cost (AISC) of A$2,205 per ounce, positioning Mt York competitively within the gold sector.
Strategic Drilling Program to Expand Resource Base
Building on this foundation, Kairos is preparing for a significant drilling campaign scheduled to commence in March or April 2025. The planned 20,000 to 30,000 metre program aims to expand and upgrade the current 1.4 million ounce resource, focusing on the recently acquired 1.5 kilometre strike extension of mineralised stratigraphy on adjoining ground, secured through an agreement with Pilbara Minerals. Historical drill results in this area have shown promising grades, including intercepts of up to 16 metres at 2.43 grams per tonne gold.
Managing Director Dr Peter Turner emphasised the importance of this drilling phase, noting that increasing the resource size and confidence levels will be pivotal for advancing the project through pre-feasibility and beyond. The company has already secured heritage approvals from the Nyamal Aboriginal Corporation, facilitating unhindered access for exploration activities.
Strong Financial Position and Partnership Support
Financially, Kairos remains well-capitalised with cash reserves of A$12.36 million as of December 31, 2024, and anticipates an additional A$10 million from Pilbara Minerals within 2025. This funding will underpin the upcoming drilling program and ongoing project development activities. The company’s prudent cash management and strategic partnerships position it well to execute its growth plans without immediate capital raising concerns.
Progress on Mining Lease and Community Engagement
Negotiations continue with the Nyamal Aboriginal Corporation, the traditional owners of the Mt York land, to secure a mining lease agreement essential for project advancement. The company has completed heritage surveys and is actively working towards finalising the mining lease application, a critical regulatory milestone. These discussions reflect Kairos’s commitment to responsible development and community partnership.
Exploration Beyond Mt York
Beyond Mt York, Kairos is advancing exploration at its Kangan Project, where recent aircore drilling has intersected promising geological formations and groundwater resources, vital for future mining operations. Results from soil sampling at the Lalla Rookh Project are pending, with the company maintaining a disciplined approach to portfolio management and value accretion.
Overall, Kairos Minerals is strategically positioned with a compelling project economics profile, a clear path to resource growth, and solid financial backing. The coming months will be critical as drilling results and mining lease negotiations unfold, potentially reshaping the company’s growth trajectory.
Bottom Line?
Kairos’s Mt York project is poised for a transformative phase, with drilling and lease negotiations set to define its next growth chapter.
Questions in the middle?
- Will the upcoming drilling program significantly increase resource size and upgrade inferred resources to indicated?
- How will negotiations with the Nyamal Aboriginal Corporation impact the timeline for mining lease grant?
- Can metallurgical test work improve gold recovery rates beyond the current conservative estimates?