Carnavale Resources Ltd (ASX:CAV, FRA:YBB) earlier this week upgraded the mineral resource estimate for its Kookynie Gold Project in Western Australia, improving confidence in the shallow high-grade portions of the deposit as the company advances toward a bankable feasibility study and planned near-term production.
The updated resource now stands at 855,000 tonnes grading 4.4 g/t gold for 120,000 ounces, representing a modest 2.5% increase over the previous estimate. More significantly, the company said the latest drilling campaign successfully converted portions of the resource into higher-confidence classifications aimed at supporting early mine development.
Managing director Humphrey Hale said the resource remained “a good high-grade resource in anybody’s name” and noted that the drilling program focused heavily on infill work within planned open pit areas to de-risk the project’s early years.
Carnavale is targeting completion of its bankable feasibility study by the end of July and continues to aim for first gold production before the end of the year. Hale said previously released scoping study economics outlined a project net present value of approximately A$188 million and forecast free cash flow exceeding A$230 million based on a gold price assumption of around A$5,500 per ounce.
With gold prices now significantly higher, Hale indicated that project economics could strengthen materially.
The company also highlighted particularly high-grade zones within the deposit, including approximately 56,000 ounces grading around 29 g/t gold. Hale described this material as “very profitable stuff” and said the project would continue progressing despite broader market caution toward junior resource stocks.
According to Hale, investors remain hesitant due to macroeconomic uncertainty, including interest rates, fuel prices and geopolitical risks, but Carnavale intends to maintain momentum regardless of market conditions.
He said the company’s strategy was to unlock value from the Kookynie asset while continuing exploration aimed at expanding the resource base. Hale also pointed to broader corporate growth ambitions under chairman Andy Beckwith, suggesting the company could look to add further assets over the medium term.
Carnavale’s progress toward development positions the company differently from many early-stage explorers, with the updated resource and ongoing feasibility work continuing to reduce project risk ahead of a planned transition into producer status.
Key highlights
- Carnavale Resources upgraded the Kookynie Gold Project MRE to 855,000 tonnes at 4.4 g/t gold for 120,000 ounces.
- The updated resource represents a 2.5% increase from the previous estimate.
- Infill drilling improved confidence in shallow high-grade mineralisation and supported resource reclassification.
- The company aims to complete its bankable feasibility study by the end of July.
- Carnavale is targeting gold production before the end of the year.
- Previous project economics outlined an NPV of approximately A$188 million and free cash flow above A$230 million.
- Higher current gold prices could significantly strengthen project economics.
- High-grade zones include around 56,000 ounces grading approximately 29 g/t gold.
- CEO Humphrey Hale said Carnavale plans to continue growing beyond the Kookynie project over the medium term.
- Hale emphasised that the company remains focused on advancing development despite cautious market sentiment.
Proactive: Welcome back to Proactive Investors. Humphrey Hale, CEO of Carnavale Resources Ltd, joins us to discuss the company’s revised MRE for the Kookynie Gold Project.
Humphrey Hale: The headline resource released today is 855,000 tonnes at 4.4 grams per tonne gold for 120,000 ounces. It supports the previous scoping study released in October last year and is a strong high-grade resource.
Proactive: What has changed in the updated MRE?
Humphrey Hale: It is a slight increase of about 2.5% over the previous estimate. The drilling was mainly infill drilling into the existing resource, designed to move indicated resources into measured within the open pits, de-risk the early years and confirm continuity in the highest-grade zones.
Proactive: What do you think the market is not understanding?
Humphrey Hale: Investors are keeping their powder dry because of interest rates, fuel prices, geopolitical uncertainty and broader market caution. Carnavale is continuing to push ahead and aims to move as quickly as possible to take advantage of current gold prices.
Proactive: What is the development timetable?
Humphrey Hale: Carnavale aims to be in production before the end of the year and complete the feasibility study by the end of July, which will outline the profitability of the project.
Proactive: How do current gold prices affect the economics?
Humphrey Hale: Previous project economics included an NPV of around A$188 million and free cash flow of more than A$230 million, based on a gold price of about A$5,500 per ounce. Gold is now closer to A$6,500 per ounce, which should improve those economics.
Proactive: Where does Carnavale go next?
Humphrey Hale: Carnavale is unlocking value from the current asset and will continue developing the project while exploring for more ounces. In the medium term, the company wants to add something bigger and better to the Carnavale story.
Proactive: Any final thoughts for investors?
Humphrey Hale: Carnavale is something investors should look at if they like gold. “I love gold, so take a look.”