Carnavale Resources Ltd (ASX:CAV) made substantial progress toward development of its high-grade Kookynie Gold Project during the June 2026 quarter, completing most technical work for a bankable feasibility study (BFS) and confirming a 120,000-ounce mineral resource with increased confidence in the proposed open pit inventory.
The company is targeting a low-capital development model based on contract mining and toll treatment at a nearby third-party processing facility, before transitioning to underground mining funded by cash flow from the initial open pits.
Carnavale expects to publish the completed BFS during the September 2026 quarter.
Carnavale Chairman, Andrew Beckwith at the IMO laboratory inspecting metallurgical samples.
Resource confidence strengthened
An updated mineral resource estimate for Kookynie stands at 855,000 tonnes at 4.4 g/t gold for 120,000 ounces, representing a 2.5% increase from the July 2025 estimate.
Importantly, 67% of the resource is now classified in the higher-confidence Measured and Indicated categories.
This includes:
- 182,000 tonnes at 5.1 g/t for 30,000 ounces in the Measured category;
- 278,000 tonnes at 5.6 g/t for 50,000 ounces in the Indicated category; and
- 394,000 tonnes at 3.2 g/t for 40,000 ounces in the Inferred category.
The shallow resource above the 320-metre reduced level, which is considered to have open pit potential, totals 409,000 tonnes at 3.9 g/t for 52,000 ounces.
Around 58% of this shallow inventory is classified as Measured, while mineralisation begins within 20 metres of surface. Carnavale said the upgraded confidence should support the estimation of ore reserves upon completion of the BFS.
A high-grade bonanza gold zone has also been confirmed within the proposed open pit depths and remains open at depth.
MRE for Kookynie Gold Project including Swiftsure and Tiptoe lodes by location.
Feasibility study nearing completion
Carnavale completed or substantially advanced the majority of technical work required for the BFS during the quarter.
Geotechnical investigations, hydrogeological assessments, environmental surveys, archaeological and heritage work, pit optimisation and detailed pit designs have been completed.
The geotechnical program included six diamond holes around the proposed Swiftsure and Tiptoe pits, with ground conditions assessed as good to very good in fresh rock.
Metallurgical testing has also been completed, with final reports expected in early August. The program assessed gold recoveries and processing characteristics across oxide, transitional and fresh material, supported by more than 150 kilograms of diamond core and over 600 kilograms of reverse circulation samples.
Carnavale is now finalising the mine schedule, site layout and financial model in conjunction with Cube Consulting.
Managing director Humphrey Hale said the remaining work centred on completing the mining schedule and BFS financial model.
“I am very pleased with progress on the BFS during the first half of the year, with the majority of the technical work completed for the study except for final reports,” Hale said.
“The remaining work to complete the BFS will be to finalise the mining schedule and prepare the BFS financial model.”
Low-capital development strategy
The Kookynie development strategy is based on compact open pits at the Swiftsure and Tiptoe deposits, followed by underground mining accessed from the base of the Swiftsure pit.
Carnavale does not intend to build a processing plant, reducing the project’s upfront capital requirements.
The company has engaged JT Metallurgical Consultants to assess potential toll treatment or ore purchase arrangements with processing facilities in the Eastern Goldfields.
Several operating plants are located within trucking distance of Kookynie, and discussions with potential processing partners have commenced.
Carnavale has also begun discussions with potential financiers, although the final capital requirement and funding timetable will depend on completion of the mine schedule and financial model.
The company intends to fund underground development and infill drilling from open pit operating cash flow, allowing deeper resources to be progressively brought into production.
Exploration drilling planned
Alongside the feasibility work, Carnavale plans to begin more than 5,000 metres of aircore drilling during the September quarter.
The 19-line program will test priority structural targets east and northeast of the proposed Swiftsure pit, particularly along the prospective contact between the Puzzle granite and surrounding greenstone geology.
Targets were generated using previous drilling, recent resource infill results, aeromagnetic imagery and gravity modelling.
Additional exploration potential remains at Swiftsure and Tiptoe, where high-grade shoots remain open at depth, as well as at Champion South, McTavish North and Valiant.
Exploration success could add further ounces to the proposed development beyond the current resource.
Plan of proposed Priority exploration targets with proposed aircore lines (black) over structural interpretation and airborne gravity.
Next steps
Carnavale’s immediate priorities are to receive the final metallurgical and waste rock reports, complete the mine schedule and financial model, and publish the Kookynie BFS during the September quarter.
The company will also advance negotiations with toll treatment providers and potential financiers while undertaking the planned aircore exploration program.
Carnavale ended the quarter with A$2.99 million in cash after spending A$1.87 million on exploration and evaluation activities. It said expenditure had been elevated by the accelerated drilling and technical programs required to complete the BFS and was expected to reduce as the study moved into final documentation.