PERTH (miningweekly.com) – Gold miner Red 5 has reported increased gold production and sales for the December quarter, compared to that achieved in the September quarter.
Gold production for the quarter increased from 20 283 oz in the three months to September, to 21 534 oz in the three months to December, while gold sales over the same period increased from 19 932 oz to 22 412 oz.
However, the company on Thursday lowered its full year production guidance to between 80 000 oz and 85 000 oz, down from the previous estimate of between 90 000 oz and 98 000 oz, owing to lower than expected mining rates and grades from the Darlot underground mine, predominantly associated with mining the remnant areas.
“The Darlot gold mine posted a quarterly production result of 21 534 oz at an all-in sustaining cost of A$2 181/oz for the December quarter. Our transitional production plan for the Darlot mining hub kicks off in earnest this quarter, with mining at the Great Western satellite deposit,” said Red 5 MD Mark Williams.
Mining approvals have been received for the Great Western satellite openpit, and mining is expected to start in February. Ore from the pit will substitute the ore feed into the Darlot mill from the King of the Hills underground operation, which is being preserved for the new processing plant, due to start operations in the June quarter.
“Development of King of the Hills is progressing well with construction teams on site and progress on schedule. We anticipate having the debt financing facility in place this quarter, and we are pleased to be working with a Tier 1 banking syndicate to achieve this objective,” said Williams.
All approvals for the start of construction of the King of the Hills processing facility are also in place.
The initial mine plan for King of the Hills estimated a mine life of 16 years, with gold production in years one to six expected to average 176 000 oz/y, while peak annual gold production of 203 000 oz/y will be achieved in 2024, benefitting from underground mining of one-million tonnes a year in years one to four.