Red 5 Ltd (ASX:RED)'s King of the Hills (KOTH) development is now more than 83% complete and on track for first gold in the June quarter of this year.
More than 60,000 metres of underground and open-pit grade control drilling was conducted there in the December quarter.
The company's quarterly gold production from Darlot and Great Western operations was 16,519 ounces, up on the September quarter's 16,377 ounces and gold sales totalled 15,839 ounces, which was slightly down on the previous period's 15,922 ounces.
On schedule
“We finished 2021 at a frenetic pace, with the workstreams at King of the Hills progressing on schedule and within budget to deliver first production by the June quarter of this year,” Red 5 managing director Mark Williams said.
“Red 5’s decision to fast-track development of the KOTH Project back in 2020 is paying off, with the company in the unique position of being ahead of the curve in terms of the cost inflation currently being experienced across the resources sector.”
The KOTH development is progressing within budget and on schedule, with all critical equipment for the SAG mill, gyratory crusher, conveyors and power station now in place.
Mining contractor Macmahon is on site and ready to kick off mining in February, with its recruitment activities all proceeding to schedule.
“Our operations team is working closely with our mining contractor, with equipment and crews now mobilising on site ready to start mining in advance of the commissioning of the plant," Williams said.
"Macmahon’s recruitment remains on plan, and our first 13-week mining schedule has been developed and is ready to be implemented.”
Exploration and resource development
The company also continued work at its underground mine at the Mission and Cable prospects, 10 kilometres north of Darlot, again performing in line with its plan.
Production guidance for the financial year for Darlot remained at 62,000-72,000 ounces at an AISC of A$2,300-A$2,400 per ounce.
“Darlot production was 16,519 ounces of gold for the quarter at an all-in sustaining cost (AISC) of $2,556 per ounce," Williams said.
“Expectations are that production from Darlot and Great Western will be stronger in the second half of the financial year and in due course, will realise the cost savings of future ore processing at the low-cost KOTH mill as part of our KOTH Hub Strategy.”
Promising results at Darlot
High-grade assays returned from resource and exploration drilling at the project yielded good results:
Cable - 0.74 metres at 164.4 g/t gold from 111 metres in hole 21CBDD002; 2.0 metres at 20.4 g/t from 133 metres in 21CBDD003); and 4.0 metres at 13.4 g/t from 111 metres in 21CBRC0019.
Mission - 4.0 metres at 14.7 g/t gold from 53 metres in 20MIRC0002; 3.0 metres at 10.5 g/t from 167 metres in 20MIDD003; 11.0 metres at 3.4 g/t from 13 metres in 20MIRC0018; and 0.35 metres at 142.5 g/t from 138 metres in 20MIDD001.
The first stage of the Great Western underground drill program was completed in mid-December, with results demonstrating that the resource remains open at depth.
“We are now integrating these latest assays into an updated geological model for the Cable and Mission deposits ahead of the delivery of a maiden JORC 2012 mineral resource estimate,” said Williams.
Labour issues
Operator shortages in the West Australian labour market continued to impact mining activities.
Management is working proactively to minimise the risk of COVID at its operations, but to date there has been no material impact on the company’s operations.
The company recorded one Lost Time Injury (LTI) and two Restricted Work Injuries (RWI) in the December quarter.
Keeping up the pace
The company will be forging ahead in the final few months of construction, aiming to maintain the pace it has set for itself to drive the project home on time and within budget.