Positive scoping results for Norseman gold project

Kalgoorlie-Boulder Resources Ltd could start producing gold from its Norseman gold project in 2010 following positive scoping study results that have pegged capital costs at $75 million.

Results released today have shown the project is forecast to generate a net project cash flow of $143 million over a seven year period after allowing for capital costs. The company said it expected a capital payback period of 32 months.

The mill will be able to process 1.8 million tonnes per annum of ore from an open pit operation, and will be capable of producing around 100,000 ounces of gold over a seven year mine-life. Operating costs have been pegged at $660 per ounce.

The project has a net present value of $80 million.

The company said it aims to extend the mine and mill life of the project to at least 10 years through future exploration on high priority targets already delineated, joint ventures and potential acquisitions.

Kalgoorlie-Boulder said the establishment of its mill for the project will be of strategic value as it will be the lowest cost and largest mill operating in a 60 kilometre radius, which provided an advantage of treating other company's ore in a toll treatment or JV arrangement.