07/11/2018 - 12:00

Kin responds to leaked report

07/11/2018 - 12:00

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The board of Kin Mining says costs at its Leonora gold project could have blown out by up to 50 per cent, after the explorer today released an engineering report that was leaked online earlier this week.

Kin suspended construction of the project in May.

The board of Kin Mining says costs at its Leonora gold project could have blown out by up to 50 per cent, after the explorer today released an engineering report that was leaked online earlier this week.

Kin suspended construction of the $35 million project in May, after the report by Como Engineers detailed an increase in capital costs to between $40 million and $45 million.

The company didn't release the full details of the report at the time, but made the decision to do so today after discovering it had been leaked.

The gold aspirant said it was now investigating how the document had been obtained and made public.

“The Kin board is concerned by these events and takes its continuous disclosure obligations very seriously,” the company said in a statement to the ASX today.

Kin estimated capital expenditure at the project could have risen even further than the Como forecast.

“By applying a notional 10 per cent to 20 per cent increase to the internal revised estimate for those aspects of the plant considered in the engineering report, the Leonora gold project pre-production capital costs had potentially increased to $49 million – $53 million, or 38 per cent – 50 per cent above the original definitive feasibility study pre-production capital estimate of $35.4 million delivered in October 2017,” Kin said.

“Based on the findings of the Como Engineers’ reports, and its own review, the Kin board did not have sufficient confidence in the accuracy of the LGP pre-production capital cost estimate to continue with the Cardinia plant construction.”

The news comes less than a month after a group of dissident shareholders led by former director David Sproule sought a board spill, including the removal of new chief executive Andrew Munckton.

The shareholders have requesting a meeting to consider a series of motions to remove all five directors and appoint three replacements, including Mr Sproule.

Shares in Kin were 2.44 per cent lower at 8 cents each at 2.30pm AEDT.

 

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