Highlights

  • Metallurgical testwork for the Kookynie Gold Project returned gold recoveries of 98% to 99% at a 106-micron grind.
  • The Bankable Feasibility Study for the open pit outlined a production target of 35.6koz from 220kt of ore at 5.0g/t.
  • The company reported its first JORC 2012 Ore Reserve for the project, covering the Swiftsure and Tiptoe deposits.
  • Aircore drilling commenced near Swiftsure, while permit applications were lodged with approvals anticipated in the first half of 2027.

Carnavale Resources Limited (ASX:CAV) has released its activities report for the quarter ended 30 September 2026, outlining progress at the Kookynie Gold Project (KGP), located about 60km south of Leonora and 180km north of Kalgoorlie in Western Australia. The quarter covered metallurgical testwork, the start of exploration drilling, and the lead-up to the Bankable Feasibility Study (BFS), which was released after quarter end. Carnavale holds an 80% interest in the KGP, with joint venture partner WR holding the remaining 20%.

Bankable Feasibility Study and First Ore Reserve

The BFS for the open pit operation outlined a production target of 220kt of ore at 5.0g/t gold for 35.6koz, with a planned mine life of 18 months that the company intends to extend through underground mining. Based on a gold price of A$6,000 per ounce, the study estimated pre-tax undiscounted free cash flow of A$104 million, a pre-tax NPV8 of A$87 million and an all-in sustaining cost of A$2,721 per ounce. Peak funding was estimated at A$24 million, excluding contingency, with payback expected in month 10 of operations.

Alongside the BFS, Carnavale reported its first JORC 2012 Ore Reserve for the project. The reserve comprises 220kt at 5.0g/t for 35.6koz across the Swiftsure and Tiptoe deposits, with the majority sitting in the Proved category. The broader Mineral Resource, estimated in May 2026, stands at 855kt at 4.4g/t for 120koz. An update to the October 2025 underground Scoping Study restated a 47koz underground production target, although the company noted that, at ±35% accuracy, no underground Ore Reserve can be declared.

Metallurgical Testwork Supports Conventional Processing

Testwork completed at IMO Metallurgy in Perth examined three master composites covering oxide, transitional and fresh material, along with nine variability samples. Gold recoveries exceeded 96% across all domains at both tested grind sizes, while gravity recoveries were above 70%. At the 106-micron grind used in the BFS, recoveries reached 98% for oxide and transitional ore and 99% for fresh ore.

According to the report, the ore is suitable for a typical Goldfields carbon-in-leach plant, with no preg-robbing, refractory or deleterious element issues identified. Tailings characterisation is ongoing, and early results indicate no expected negative impact on a conventional tailings storage facility.

Exploration, Permitting and Financial Position

More than 4,000m of aircore drilling is testing structural targets along the greenstone-granite boundary about 2km northwest of Swiftsure. Separately, over 3,000m of sterilisation drilling was completed to clear planned infrastructure sites, with results expected in around six weeks. Applications for the Mining Development and Closure Proposal, Native Vegetation Clearing Permit and Works Approval have been lodged, with approvals anticipated in the first half of 2027.

Managing Director Humphrey Hale described the BFS as "a milestone for Carnavale." The company's stated next steps include securing a third-party processing arrangement, running tenders for mining and haulage contractors, arranging project funding and reaching a Final Investment Decision. Carnavale held A$2.27 million in cash at quarter end, with A$536,000 spent on exploration during the period.

Key Takeaways

  • The Kookynie BFS and first Ore Reserve mark a shift from exploration towards potential development for Carnavale.
  • Metallurgical results point to high recoveries using conventional carbon-in-leach processing.
  • Open pit production is scheduled for the second half of 2027, subject to permits, funding and a positive Final Investment Decision.
  • Cash of A$2.27 million at quarter end means funding arrangements remain a key area to watch.