The first stage of an engineering cost review focused on the plant construction costs, which comprise 55% of the overall capex.

Previous estimates were completed in 2012 at the height of the construction boom, and Geopacific said at the time it became involved in the project last year that cost savings were likely.

Mincore Engineers completed the work and found that plant costs could be cut by $US25 million to $68 million.

Geopacific managing director Ron Heeks said the like-for-like comparison confirmed the company’s initial belief.

“Now that we understand the plant construction costs, we are looking at other infrastructure costs like roads, accommodation, and the port, to determine the extent of savings available there,” he said.

“We expect these savings to be greater on a proportional basis.”

The second stage of the cost review is underway, while the company has also identified the potential for a refined process path.

Capital costs for a 1.8 million tonne per annum operation over nine years were estimated at more than $200 million in the 2012 feasibility study.

Geopacific is also conducting drilling to upgrade the 766,000 ounce ore reserve to more than 1.2 million ounces to support a larger, longer-life operation.

Three rigs are currently operating with assays due in the coming weeks.

The project already has a 2.1Moz resource at 1.5 grams per tonne gold.

Geopacific can earn up to 75% from Kula by spending $A18.65 million in stages over the next 3.5 years.

Geopacific has the opportunity to move to an 80% stake in the project by securing financing.

Shares in Geopacific were unchanged at 3.8c, while Kula shares remained at 2.1c.