Carnavale Resources' Kookynie Gold Project BFS delivers A$104M pre tax cash flow

So, this culminates in in what is, you know, the definitive bankable feasibility study with as you said, 104 million in free cash pre tax for the open pits.

Carnival Resources has completed a bankable feasibility study for an initial open pit development at the Kukani gold project. Here to discuss the details is managing director Humphrey Hale. Humphrey, good to see you again.

Good morning, Jonathan, good to see you.

it's a pleasure to have you here so especially on a day like today with the BFS out. Talk us through I guess the numbers. There's 104 million in pre tax free cash flow over an 18 month mine life. Talk us through those numbers and and and the other key results.

Yeah, thank you Jonathan. It's um it is a milestone for the project. It's uh it's something that we discovered as a brand new uh deposit back for well I think 202 early 2022 we put out some development was and pushed it forward. So this culminates in in what is, you know, the definitive bankable feasibility study with as you said 104 million in free cash pre-tax for the open pits. Um it's a short mind life, it's not very big in the pits, but it's high grade. So the Swift Shore pit is 5.8 grams per ton on average with the tiptoe pit in addition around 2.7. So, you know, strong grades for the open pits, strong cash flow over a very short life which which pushes the company forward.

Um and low capts of course, because we don't build a mill, we're transporting to a third party and that means our maximum drawdown to develop the project but the capital required is in the order of 24 million Aussie. So it's uh allows a company to move forward quite quickly and naturally we're we're working hard with uh third-party off takers and all purchase agreements to toll treatments to to go to the next step.

We'll we'll touch on the third party processing a little bit more in a second, but I want to go back to Swifthore and tiptoe in particular. Um open pits, uh what makes them so attractive I guess as that starting point for development?

Yeah, well open pits in the in the goldfields are very straightforward. You you can use a contract minor. The uh it's well understood and it's a small scale equipment. It's very readily very readily available. Um we've we've put our permits in. Um and the grade I think is ultimately the the strong suit here. We we have average grade that is better than most in in in the goldfields processing. So we we certainly make good business sense uh to to be able to develop this whether it's for ourselves or ultimately someone decides they want to take us out at some point. I mean our plan is to get in here and and uh develop it, create some more cash for shareholders. um in that way and it and it's not far away. You know, with the permits in, we could be uh breaking ground comfortably sort of mid year next year. so um this is this is a quick thing.

Yeah, and as you mentioned earlier, I mean part of part of that good sense is is that plan to use third party processing rather than build a stand standalone plant.

100%. Yeah, so, I mean, the the larger mills that we would use have a lower cost uh per ton to to to process. They do it quicker. um and naturally we don't have to deploy any capital to dilute our shareholders. So in all ways it's sensible to go out to a third party processor for this project.

So what potential now do you see for extending the project underground at Swifthore, um after this initial open pit open pit phase?

Yeah, so we did the open pit bankable feasibility study to simplify things to get things moving forward. The project has significantly more resources underground. Um so in the scoping study we had another 49,000 oz. uh that would give a cash flow on the bankable study uh revenue stream in the order of another 111 uh million bucks. So, you know, you can you can add those two together in some way to get some level of valuation. But in addition, the open pits are slightly smaller uh from our scoping study work to our now definitive study and that's left another 11,000 ances to be included in the underground. and they're very high grade at the bottom of the pit, easily accessible and highly profitable. So in those same metrics, you might consider that 11,000 ounces of of a three grand profit margin could give you at least another 30 million in cash flow. So that brings the project cash flow up to about 245 million, which is which is very significant. We have a plan, obviously now, uh that we've got the pit set and locked and and the permits in to upgrade the the standard of the underground um work such that it can be continued straight away after the development of the open pit. and that should come in uh by Q next year, first quarter, and that's that should add those those answers into an underground reserve hopefully.

So, really good numbers. What are what are the main steps now, I I guess for you guys to to complete before targeting production in that second half of 2027?

Yeah, the big thing Jonathan is um is all about finding a place to to treat the or and that that'll lock in the revenue stream. And then that will lock in our ability to to fund it. So once we have the revenue stream sorted out, then we can fund it. We've we've been talking with a large number of groups that can process our all whilst we've been doing the study and now the work has been done and the detail is there, we can lay out schedules, grades, tons, uh all types uh and and and really, you know, work out the details there. So we'll be moving on to that next stage. Well, immediately we're already there, we're already doing it. So just finding the best outcome.

Yeah, yeah, plenty to look forward to, especially as we we head towards Christmas and into 2027. Uh there's a lot a lot going on and plenty of momentum. Uh Humphrey, thanks for your time today and uh and yeah, uh good luck with with with everything. We'll we'll speak again shortly.

Thank you, Jonathan.