Red 5 Ltd (ASX:RED)’s ramp-up of its 100%-owned King of the Hills (KOTH) Gold Project in Western Australia is proceeding to plan, after the company poured first gold on June 5, 2022.
King of the Hills and the Darlot Gold Mine have been kind to the company, helping Red 5 deliver a positive final quarter of the financial year, with Darlot achieving FY22 production and cost guidance.
The new 4.7 million tonnes per annum King of the Hill processing plant is performing in line with expectations, with a total mill operating time in excess of 84% achieved during June 2022.
Further to this, the SAG mill is delivering throughput rates in excess of 600 tonnes per hour at moderate mill loads and power draw.
The open pit and underground mines are fully operational, with the first underground stope fired on June 20 2022.
Mill feed has been supplemented with higher-grade ore from Great Western.
There is more than 1 million tonnes of ore on the KOTH ROM pad, which is equivalent to in excess of two months of processing feedstock.
Darlot performing well
Darlot is also meeting expectations. In its final quarter of processing, Darlot has produced 64,261 ounces for FY22 (production guidance was 62,000-72,000 ounces).
The company expects Darlot’s full-year AISC (all in sustaining costs) to be in line with guidance of A$2,400-$A2,500 per ounce.
Trucking of Darlot underground ore to KOTH will begin in the current quarter.
Cash in the bank
At June 30, 2022, Red 5 had unaudited cash and bullion on hand of A$55.6 million (compared with A$47.4 million at the end of the March quarter), of which A$15.6 million is allocated to reserve accounts and bond guarantees.
Red 5 has fully drawn down on its A$175 million KOTH Debt Facility during the June quarter.
Managing director Mark Williams noted the delivery of the King of the Hills Project on time and on budget and the successful start of commissioning and ramp-up as a highlight of the past quarter.
“We are pleased to report on what has been a positive start to the ramp-up program at KOTH since our first gold pour on June 5, 2022.
“The new processing facility is performing well, with a total mill operating time of more than 84% for the month of June. The SAG mill is also operating in line with expectations, and the open pit and underground mines are both now fully operational.
“Darlot also delivered a positive final quarter of processing, allowing us to achieve guidance with 64,261 ounces produced for FY22.
“We now have an excellent platform to embark on this next chapter of Red 5’s growth. The successful ramp-up of production at KOTH will put us on an exciting growth trajectory over the coming quarters and we look forward to keeping the market informed about our progress during FY23.”