Kin Mining NL has released the results of a pre-feasibility study that estimates the Leonora gold project in Western Australia will have a net present value of A$71 million before tax.

The project is expected to have an initial mine life of 6.5 years, producing 309,000 ounces of gold during that time.

The operation will comprise three open pit mining centers supplying a centrally located 750,000-tonne-per-annum processing plant that will be expanded to 1.2 million tonnes per annum in the third year.

Forecast production will be 43,000 ounces in the first year, ramping up to 52,000 ounces by year three. This is estimated to deliver A$494 million worth of revenue and operating cash flow of A$105 million.

The initial capital outlay is estimated to be A$35 million and payback is expected within about 18 months.

The Leonora operation is expected to have life-of-mine all-in sustaining costs of A$1,084 per ounce.

A feasibility study is due for completion by mid-2017, with 17,000 meters of drilling currently underway to convert the inferred resource to indicated.

First gold production is slated for mid-2018.