Kaminak Gold Corp. halted trading of its stock Wednesday while it unveiled a promising feasibility study for is Coffee gold property south of Dawson City.

The study indicates the open pit operation would be hugely profitable even at today’s price for gold.

It would take just two years to pay back the $317 million in capital funding required to open the mine, according to the feasibility study which was conducted and reported in accordance with strict guidelines established by the stock market.

Kaminak Gold is looking at 2018 to begin construction.

It will be submitting its project for screening by the Yukon Environmental and Socio-economic Assessment Board this summer, according to the announcement.

“This feasibility study firmly establishes the Coffee Project as one of the world’s best undeveloped gold projects by value and margin that works in the current gold-price environment,” Kaminak president Eira Thomas said in Wednesday’s release.

“The Coffee Project further benefits from being a simple, open pit, heap leach mining opportunity, situated near infrastructure that delivers low all in sustaining costs and pays back capital in under two years.

“Kaminak feels privileged to be working in the pro-mining jurisdiction of Yukon where we enjoy strong relations with all levels of government, including our local First Nations, with whom we have worked alongside, collaboratively since 2010.”

In a telephone interview this morning from her office in Toronto, Thomas said she fully believes the company can raise the necessary financing and get through the regulatory process to meet its target of beginning construction in 2018.

The project is simple, with high-grade gold and metallurgy that will allow for 86 per cent recovery of that gold, she pointed out.

Thomas said because it’s a heap leach project, there’s no need for a mill and no need for a tailings pond or dam.

“It’s very simple, and that is a big factor in driving costs down,” she said. “It’s simple, and we also like to say it’s low-risk.”

The feasibility study estimates the cost of producing an ounce of gold would be $550 an ounce, which leaves a net return of $600 per ounce in today’s market.

Such a cushion provides a comfortable buffer to absorb low market conditions while placing the company in a nice position to benefit even more from any upswing in gold prices, she said.

Thomas said there is no question the project is viable, and Kaminak will do everything it can to get the mine into production.

Kaminak asked the Toronto Stock Exchange to halt trading Wednesday morning in anticipation of the announcement. Trading resumed this morning. At noon today, Kaminak was trading at 94 cents a share.

The Coffee Project has been the focus of Kaminak Gold since 2009.

That’s when it acquired the property from renowned Dawson City prospector Shawn Ryan, who retains a two per cent royalty.

The company drilled its “discovery hole” in 2010 and began the feasibility study in 2014 based on a positive preliminary assessment. Mine life is currently estimated at 10 years.

The Coffee property is located 130 kilometres south of Dawson, on the west side of the Yukon River.

Kaminak plans to use and improve 214 kilometres of existing road that services the placer mining industry, plus build 37 kilometres of new road to access the Coffee property.

Barges would be used in the summer months to cross the Stewart and Yukon rivers and ice bridges would be used in the winter.

The feasibility study estimates peak employment during construction would hit 480.

Operations during production would require an estimated 435 employees, on rotating shifts of two weeks in and two weeks out.

Power would be provided by a nine-megawatt generating plant driven by diesel engines with an option of using liquefied natural gas if it becomes more attractive, according to the feasibility study.

The study says the Coffee Project is expected to produce more than 200,000 ounces of gold annually for the first five years, and 184,000 ounces annually over the life of the mine.

The Kaminak president said the single-lane road access to the mine is also relatively straightforward and simple.

There would be no need to haul concentrate, as the gold recovered in the heap leach would be poured in bars on-site, Thomas said.

She said once all the equipment has been brought into the mine site, bringing in fuel and supplies would be the only need for the road.

“Our aim is to have that road ready for construction in the second quarter of 2018,” she said.

Thomas said Kaminak Gold is quite engaged currently with the First Nations, government and the regulatory agencies.

The intent is to make everybody so familiar with the project that there would be no surprises for anybody by the time Kaminak files with the assessment board this summer, she said.

Thomas said as soon as the board determines it has all the information it requires to screen the project, as soon as Kaminak passes the adequacy test, the company intends to file its plans with the Yukon Water Board.

Kaminak, she said, expects the separate screenings by the water board and YESAB would move forward at the same time.

Thomas said she realizes the regulatory regime in the Yukon has been an issue for the exploration and mining industry. But mines have been permitted here, she pointed out.

Kaminak’s officer in charge of the permitting process has extensive experience and has successfully permitted eight or nine mines in the North, said the company president.