Carnavale Resources Ltd (ASX:CAV, FRA:YBB) earlier this week outlined substantial progress toward development of its high-grade Kookynie Gold Project, with most of the technical work for a bankable feasibility study now complete.
Managing director Humphrey Hale said the remaining work was centred on mine scheduling, financial modelling, compiling the technical reports and preparing the study for publication.
The company’s updated mineral resource stands at 855,000 tonnes grading 4.4 grams per tonne gold for approximately 120,000 ounces. Hale said the increase in measured material within the proposed open pits was particularly important because it reduced project risk, improved confidence in mineability and could support the future conversion of resources into ore reserves.
Hale said Carnavale had “pretty much done all of the technical work”, including geotechnical, metallurgical, hydrogeological, archaeological and heritage studies. The mining lease had also been granted.
Further metallurgical details are expected to be released, with Hale indicating that recoveries could be similar to earlier test work of approximately 99%.
A key feature of Carnavale’s development strategy is its proposed low-capital model. Rather than constructing a standalone processing plant, the company is evaluating contract mining and third-party processing through a toll-treatment, toll-milling or ore purchase agreement.
Hale said a new processing plant could require around A$200 million in capital, making third-party treatment a potentially significant means of reducing upfront funding requirements. He added that the project’s grade could support transporting ore to a processor some distance from the mine.
Carnavale also plans to transition from initial open-pit production to underground mining, with the later phase potentially funded from cash flow generated by the open pits.
Exploration provides a further potential catalyst. The company is preparing a 5,000-metre drill program targeting the granite-greenstone boundary northwest of the Swiftsure pits. Hale said gravity surveys, structural analysis and earlier drilling had identified a prospective target in that area.
The company ended the quarter with approximately A$3 million in cash, which Hale said was consistent with its budget and sufficient to continue exploration work.
Near-term investor catalysts include completion and publication of the BFS, metallurgical results, progress toward a third-party processing agreement and results from the planned drilling campaign.
Interview highlights
- Carnavale Resources completed most of the technical work required for the Kookynie Gold Project bankable feasibility study.
- Remaining BFS work includes mine scheduling, financial modelling, report compilation, final drafting and publication.
- The updated mineral resource totals 855,000 tonnes at 4.4 grams per tonne gold for approximately 120,000 ounces.
- A larger measured-resource component within the proposed open pits has increased confidence in the project and may support future conversion into ore reserves.
- Completed technical work includes geotechnical, metallurgical, hydrogeological, archaeological and heritage studies.
- Hale said metallurgical results were expected to be similar to earlier testing, which indicated recoveries of about 99%.
- The mining lease has been granted.
- Carnavale plans to pursue a low-capital development model using contract mining and third-party toll treatment, ore purchase or toll-milling arrangements.
- Avoiding construction of a standalone processing plant could remove the need for approximately A$200 million in upfront capital expenditure.
- The company had approximately A$3 million in cash at the end of the quarter, in line with its budget.
- A 5,000-metre exploration program is planned to test targets near the granite-greenstone boundary northwest of the Swiftsure pits.
- Upcoming potential catalysts include completion of the BFS, metallurgical results, progress on third-party processing arrangements and exploration drilling.
Proactive: Carnavale Resources made substantial progress toward development of its high-grade Kookynie Gold Project during the June 2026 quarter. Here to discuss that progress, including technical work for a bankable feasibility study and the mineral resource, is Managing Director Humphrey Hale. Humphrey, good to see you.
Humphrey Hale: Good morning, Jonathan. Good to see you.
Proactive: Let’s talk about the last quarter. Can you talk us through the key achievements and what the company is working toward?
Humphrey Hale: Absolutely. We have been progressing the bankable feasibility study for the Kookynie Gold Project, including the Swiftsure and Tiptoe deposits.
We started that process at the beginning of the year and said we would aim to finish around the middle of the year. We are now at that point.
We have completed nearly all the technical work. The next step is to bring everything together, write the full study and analyse the financials.
We are currently creating pit shells for Tiptoe and Swiftsure using the updated resource. The resulting schedules will feed into the financial model, which is still to come, but it should not be too far away.
Proactive: What work remains to be completed for the BFS?
Humphrey Hale: The remaining work is primarily scheduling, financial modelling, compiling the reports, completing the write-up and publishing the study.
We have completed nearly all the technical work required for the study across several disciplines.
The mineral resource update was completed earlier in the year. It stands at 855,000 tonnes grading 4.4 grams per tonne gold for 120,000 ounces.
That represented a slight increase, but importantly, we added a significant amount of measured material within the open-pit resources. That helps de-risk the project, improves confidence in its mineability and should allow us to convert resources into reserves in the future.
We also completed geotechnical studies, which slightly improved the wall angles used in the scoping study pits.
The metallurgical work has also been completed, and we expect to release further details soon. We are expecting results similar to the earlier work, which indicated recoveries of around 99%.
The hydrogeological work to assess pit water requirements has been completed, along with archaeological and heritage work. The mining lease has also been granted, so we are very pleased with the progress.
Proactive: I also want to discuss the toll-treatment strategy. How does that help keep upfront development costs low?
Humphrey Hale: The project has a resource of approximately 120,000 ounces, and we expect to mine a subset of that.
It is a small, niche project with a high-grade core. Because of its scale, we do not need to build our own processing plant, which could require capital expenditure of around A$200 million.
Instead, we need to establish a toll-treatment agreement, an ore purchase agreement or another arrangement with a nearby processor.
The grade is strong. The overall resource grade is 4.4 grams per tonne, which means the material can potentially be transported a considerable distance while remaining economic.
That work has already started. We are using metallurgical consultants to assist us, and we expect to progress a toll-treatment, ore purchase or toll-milling agreement as part of the next steps following completion of the study.
Proactive: Exploration work is continuing, and the company has funding available. What does the upcoming 5,000-metre exploration program look like?
Humphrey Hale: We raised A$7 million in October last year to progress and complete the feasibility study, and we are almost there.
We have also published the quarterly report, which showed that the company had approximately A$3 million remaining in the bank. That was in line with our budget, so we are pleased with that position.
The funding allows us to undertake further exploration within the Kookynie Gold Project tenement package.
We have completed gravity surveys and structural analysis. Based on the earlier drilling, we believe there is a highly prospective exploration target on the granite-greenstone boundary, slightly northwest of the Swiftsure pits.
We have planned a drill program for the next quarter to test that target, which is exciting.
Nearby, Genesis Minerals (ASX:GMD) has had exploration success in granite north of the Puzzle pit. We are hoping that structures extending into the granite at Kookynie could create a similar exploration opportunity.
Proactive: To sum up, the BFS is almost complete, the resource is established and an exploration program is coming up. What should investors be watching for?
Humphrey Hale: The market has been fairly soft recently, but the company has a strong pipeline of news ahead as we complete the study and demonstrate the project’s potential value.
We believe there is good reason for investors to look at Carnavale, particularly given the exploration upside and the project’s high grades.
We will also have a booth at the Diggers & Dealers Mining Forum on August 3, 4 and 5. I will be there discussing the BFS, the exploration upside and the company’s development strategy.
Proactive: Anyone attending Diggers & Dealers should go and see Humphrey. Thanks for your time today, and we will speak again as further developments unfold.
Humphrey Hale: Thanks, Jonathan. Good to talk.