Name of the Project
King of the Hills (KOTH) gold project.

Location
The Eastern Goldfields region of Western Australia.

Project Owner/s
Gold producer Red 5.

Project Description
Red 5 has approved the final feasibility study for a proposed, standalone 4.7-million-tonne-a-year bulk mining and processing operation at KOTH, with an initial mine life of 16 years and the potential to expand this to six-million tonnes a year.

Life-of-mine production is estimated at 2.5-million ounces of contained gold.

Gold production in years 1 to 6 is expected to average 176 000 oz/y, while peak gold production of 203 000 oz/y will be achieved in 2024, benefiting from the underground mining of one-million tonnes a year in years 1 to 4.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a pretax net present value, at an 8% discount rate, of A$1.1-billion and an internal rate of return of 64.3%, with a payback of 25 months and a gold price of A$2500/oz.

Capital Expenditure
The feasibility study has delivered a capital cost of about A$226-million.

Planned Start/End Date
First production is scheduled for the June quarter of 2022, with three months of mine prestrip.

Latest Developments
The ramp-up of gold production from the KOTH operation has progressed slower than expected in the three months to September, gold miner Red 5 has reported.

The project produced 26 710 oz of gold during the quarter, up from the 18 586 oz produced in the June quarter, with gold sales increasing from 16 587 oz to 30 005 oz in the same period.

However, the ramp-up schedule for the September quarter was impacted on by Covid-absenteeism, delaying progress towards higher-grade openpit benches and underground production stopes.

Additional crews have been in place since August to allow for the mining schedule to catch up by December 2022.

Further, there was unplanned downtime at the processing plant, with mill shutdowns required in September to reconfigure the semiautogenous grinding (SAG) mill to process an increasingly hard primary rock charge as ore feed.

Since the end of the September quarter, the ramp-up of throughput at the SAG mill and within the processing circuit has performed more in line with expected production rates.

At the start of October, Red 5 completed a capital raising to assist with working capital and to fund the next phase of its growth programme, including a planned expansion of the KOTH processing plant to increase throughput capacity from the current 4.7-million-tonne-a-year nameplate to a targeted 5.5-million tonnes a year.

In the September quarter Red 5 also delivered an updated resource and reserve statement that reinforced the endowment of the KOTH orebody, with a 7% increase in the KOTH mineral resource to 4.7-million ounces of contained gold and a 12.5% increase in the ore reserve to 2.7-million ounces.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Red 5, tel +61 8 9322 4455 or email info@red5limited.com.