Carnavale Resources has lifted its Kookynie Gold Project resource to 120,000 ounces and is nearing completion of its Bankable Feasibility Study, with exploration drilling set to test new targets.
- Mineral Resource Estimate rises 2.5% to 120koz gold
- 67% of resource now measured and indicated
- Bankable Feasibility Study mostly complete, final report due Q3 2026
- 5,000m aircore drilling planned on structural targets
- Low capex model with contract mining and toll treatment
Resource Upgrade Boosts Project Confidence
Carnavale Resources Limited (ASX:CAV) has reported a modest 2.5% increase in its Mineral Resource Estimate (MRE) at the Kookynie Gold Project (KGP) in Western Australia, now standing at 855,000 tonnes grading 4.4 g/t gold for 120,000 ounces. Importantly, the proportion of higher-confidence Measured and Indicated resources has risen to 67%, with Measured resources alone accounting for 25% of the total. This upgrade, driven by a dense 10m x 10m infill drilling campaign, significantly de-risks the early open pit mining phase and underpins the ongoing Bankable Feasibility Study (BFS).
The resource remains open at depth, especially in the bonanza-grade zones at Swiftsure and Tiptoe pits, which start within 20 metres of surface and include oxide material suitable for early processing. The shallow open pit resource above the 320mRL cutoff comprises 409,000 tonnes at 3.9 g/t gold for 52,000 ounces, representing 43% of the total resource.
Feasibility Study Nears Completion with Technical Work Finalised
The BFS is progressing well, with most technical studies complete or close to completion. Geotechnical drilling, hydrogeological surveys, environmental assessments, and heritage surveys with the Nyalpa Pirniku traditional owners have all been concluded, clearing major development hurdles. Metallurgical testwork on fresh, intermediate, and oxide ore types has been finished, with final results expected in early August 2026. These tests will inform the processing strategy and toll treatment negotiations.
Carnavale is advancing mine scheduling and financial modelling based on a low capital expenditure approach that leverages contract mining and toll treatment at nearby third-party processing plants. The company has engaged JT Metallurgical Consultants to assess potential toll treatment agreements, aiming to avoid the costs and delays of constructing its own processing facility. Discussions with financiers are underway to secure funding ahead of production, with final capital requirements to be confirmed upon BFS completion.
Exploration Drilling Targets Structural Gold Zones
Exploration is set to ramp up with over 5,000 metres of aircore drilling scheduled for Q3 2026. The program will target structural contacts between the Puzzle granite and greenstone belts within the KGP tenement package, focusing on extensions east and northeast of the Swiftsure pit. These targets were identified through a combination of geological data, aeromagnetic imagery, and gravity modelling. Additional prospects like Champion South, McTavish North, and Valiant remain untested and offer potential to add ounces to the project’s resource base.
Underground Development Planned Post Open Pit
Carnavale intends to transition to underground mining following the open pit phase, with access proposed from within the Swiftsure pit. The October 2025 Scoping Study outlined an underground resource of approximately 68,000 ounces at 4.8 g/t gold below the 320mRL cutoff. Underground production is expected to commence immediately after open pit completion, funded by cashflow from early operations, providing a cost-effective pathway to unlock deeper mineralisation.
Financial Position and Next Steps
The company reported exploration expenditure of A$1.874 million during the quarter, reflecting the intensive drilling and technical programs supporting the BFS. Carnavale ended the quarter with cash reserves of A$2.991 million, sufficient to fund ongoing activities through the next 1.4 quarters. Management acknowledges the need for additional funding post-BFS to advance development and is actively engaging financiers.
The final BFS report, including definitive mine scheduling and financial modelling, is expected in Q3 2026. Metallurgical results and toll treatment agreements will be key to refining project economics. Exploration drilling outcomes will also be closely watched for their potential to expand the resource base and extend mine life.
Bottom Line?
Carnavale’s Kookynie Gold Project is shaping up as a low-capex, staged development with a solid resource base and a BFS nearing completion, but final economics hinge on metallurgical outcomes and funding arrangements.
Questions in the middle?
- Will metallurgical test results confirm expected gold recoveries to support toll treatment?
- How will exploration drilling outcomes impact resource growth and project valuation?
- What financing structure will Carnavale adopt to fund development and transition to underground mining?