PERTH (miningweekly.com) – ASX-listed Red 5 is expected to cease ore processing at its Siana gold mine, in the Philippines, by the end of June or early July.
Mining operations were suspended in April on the back of uncertainty around regulatory and government mining policy, as well as an assessment of the likely resulting changes to openpit operations after taking into account delays in gaining approvals for the environmental compliance certificate amendment for the long-term tailings storage facility and other mining challenges.
Underground development work was also suspended.
Red 5 on Wednesday said the Siana processing plant resumed operations after the suspension and was currently processing existing medium- to low-grade ore stockpiles, in order to maximise the use of the existing tailings storage capacity and the existing stock of reagents.
Since mining at the Siana mine has been suspended, the company has been working with employees, contractors, host communities and stakeholders to implement the suspension plan, with the company forced to implement significant reductions in overhead and operating costs, including a reduction in staff numbers at the Siana mine site, as well as the Manila and Perth offices.
Based on Red 5’s current cash position, the company had sufficient funds to maintain the suspension for at least two years.
In the meantime, Red 5 will continue with an internal review of a 2016 feasibility study into the underground operation at Siana with the aim of identifying opportunities to further reduce capital and operating costs, with preliminary results already proving positive.
The underground operation is expected to produce about 504 000 oz of gold over an eight-year mine life, at an all-in cash cost of between $900/oz and $950/oz, with the capital drawdown expected to be around $46-million, compared with the $60-million outlined in the 2016 study.