Carnavale Resources is approaching the final stretch of its bankable feasibility study for the 80%-owned Kookynie Gold Project, backed by a 120,000-ounce resource and strong metallurgical recoveries. The project still requires financing, a toll-treatment agreement and final economic modelling before it can move from promising study to mine development.
- 120koz Kookynie resource at 4.4g/t gold
- Recoveries above 96% across three ore domains
- Mining and Heritage Agreement signed
- A$2.99m cash at 30 June 2026
- BFS and funding arrangements remain outstanding
Kookynie Moves Towards Final Feasibility Study
Carnavale Resources Limited (ASX:CAV) is approaching a decisive point at its Kookynie Gold Project, with the technical work for a bankable feasibility study substantially completed and final reports expected shortly. The Western Australian project now carries a 120,000-ounce mineral resource at 4.4g/t gold, including 30,000 ounces in the Measured category, but it remains a pre-production asset with no mineral reserves calculated.
The May 2026 resource estimate covers 855,000 tonnes across the Swiftsure and Tiptoe lodes. About 58% of the material above the 320mRL open-pit threshold is classified as Measured, a confidence upgrade based on 138 reverse-circulation holes drilled over roughly 8,384 metres. Carnavale says the drilling is intended to support reserve estimation and reduce operating risk during the early payback period.
Metallurgy Supports Third-Party Processing Model
The metallurgical results are among the stronger elements of the report. Testwork on oxide, transitional and fresh samples produced recoveries above 96% at both tested grind sizes, with 24-hour cyanidation recoveries ranging from 96.3% to 99.0%. Laboratory gravity recovery exceeded 70% across all three domains, while Carnavale says the samples showed no issues involving preg-robbing, refractory mineralisation or deleterious elements.
That performance matters because Kookynie is being designed around contract mining and toll treatment rather than a company-built processing plant. Strategic Metallurgical Consultants has begun assessing nearby Goldfields processing facilities and discussions with potential operators, but no toll-treatment or ore purchase agreement has been secured in the annual report.
Mining Agreement and Lease Clear Development Hurdles
Carnavale and its 20% joint venture partner, Western Resources, signed a Mining and Heritage Agreement with Wangkatja Tjungula Aboriginal Corporation for the Nyalpa Pirniku native title holders during the year. The agreement establishes a heritage management framework and provides for compensation, potential employment and contracting opportunities, milestone payments and a 1% gross-revenue royalty once production begins.
The mining lease hosting the Swiftsure and Tiptoe resources was granted in February 2026. Carnavale has also completed geotechnical, hydrogeological, environmental, heritage and pit-design work, while applying for an access corridor to connect the project with the Kookynie-Malcolm Road.
Scoping Study Economics Still Set the Reference Point
The headline economics currently available to investors come from the October 2025 scoping study, not the pending BFS. That study outlined a 61-month open-pit and underground operation producing an estimated 93,000 ounces of gold after processing, with A$501 million in revenue and A$237 million in pre-tax free cash flow at an assumed gold price of A$5,500 an ounce. It estimated a pre-tax NPV8 of A$188 million and a 14-month payback period.
Those figures remain conceptual until the BFS incorporates final contractor quotes, mine scheduling, financial modelling and any updated cost or revenue assumptions. The study also relies on only part of the resource base, and the company has not yet converted the resource into an Ore Reserve.
Cash Position Leaves Funding as the Next Test
Carnavale reported a net loss of A$1.23 million for the year, down from A$3.03 million, and held A$2.99 million in cash at 30 June 2026. Operating and investing activities consumed A$4.33 million during the year, while a placement and entitlement offer generated a combined A$5.66 million before costs. The company has begun discussions with potential financiers, but says the amount and timing of required funding depend on the completed schedule and project model.
The annual report also records a remedied auditor-independence breach involving a financial interest held by the spouse of a recently appointed audit-firm partner. The partner was not involved in the engagement, the interest was disposed of and HLB Mann Judd concluded that the breach did not compromise the audit’s objectivity; the audit opinion was unmodified.
The immediate catalyst is the promised Q3 2026 BFS. Its value will lie less in repeating the resource story than in answering the practical questions still open: how much capital Kookynie needs, which plant will process the ore, what reserve can be declared and whether the project can be funded without materially changing the share structure.
Bottom Line?
Kookynie has cleared several technical and tenure hurdles, but the investment case now turns on the BFS converting strong resource and metallurgical data into a financeable mine plan.
Questions in the middle?
- What Ore Reserve will Carnavale establish from the 120koz resource?
- Can the company secure toll-treatment and financing terms that preserve the scoping study economics?
- Will the final BFS capital requirement exceed the company’s current cash resources by a significant margin?