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Tight labour market hits Red 5

29th April 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Gold miner Red 5 this week reported that operator and skills shortages in Western Australia had continued to impact mining operations in the March quarter, with production falling from the 16 519 oz produced in the December quarter to 13 185 oz in the three months to March.

Gold sales declined from 15 839 oz to 14 644 oz in the same period.

“The March 2022 quarter marked another strong quarter of construction and operational readiness activities at King of the Hills, with openpit and underground mining progressing well and our first gold bar now just weeks away,” said Red 5 MD Mark Williams.

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 yearly 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.

“I believe that our ability to successfully deliver this major project, against the backdrop of an unprecedented labour and supply market and the recent widespread impact of Covid-19 into Western Australia, is a great achievement.

“Red 5 has been able to successfully attract and embed a high-calibre site management and operational team, which I believe reflects the high-quality and long-term nature of the King of the Hills operations,” Williams said.

“On the operational front, gold sales from the Darlot and Great Western gold mines over the March 2022 quarter totalled 14 644 oz at an all-in sustaining cost (AISC) of A$2 55/oz.

“The successful commissioning of the new 4.7-million-tonne-a-year processing plant at King of the Hills signals the start of a new operating regime for our Eastern Goldfields operations, with ore to be sourced from the King of the Hills openpit and underground mines, the Darlot underground mine and the Great Western openpit, a move that is expected to deliver a step-change decrease in our operating costs moving forward.

“It was also pleasing to deliver a series of positive near-mine exploration results from Darlot during the quarter, with the results demonstrating significant potential to extend Darlot’s underground resource base and define future mining areas,” Williams said.

Looking ahead at the full year, Red has maintained its production guidance at 62 000 oz to 72 000 oz. As a result of labour shortages and cost inflation in the current market, AISC guidance for the full year has been adjusted to between A$2 400/oz and A$2 500/oz, up from the previous estimate of between A$2 300/oz and A$2 400/oz.

Edited by Creamer Media Reporter

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