Posts

Red 5 Limited Lowers Darlot Gold Mine Production Expectations Due to Labour Shortage

THE BOURSE WHISPERER: Red 5 Limited (ASX: RED) reflected the reality of the effect a booming industry can have by reporting lower-than-planned production at the company’s Darlot gold mine due to mining rates continuing to be negatively impacted by machine operator and labour shortages now prevalent across the mining industry.

Red 5 advised it has revised production guidance for the Darlot gold mine for FY2021 to 74,000 – 78,000 ounces (previously 80,000 – 85,000 ounces) at an All In Sustaining Cost (AISC) of $2,240 – $2,290 per ounce (previously $2,150 – $2,280/oz).

The company explained labour availability at both the Darlot underground mine and the Great Western open pit mine has continued to impact production.

In the March 2021 Quarter, Red 5 commenced mining at the Great Western mine, however due to a shortage of machine operators and truck drivers, the contractor has been unable to ramp up mining activities at the planned rate.

This has delayed the delivery of higher-grade ore to the Darlot Mill into FY2022.

Red 5 management is now undertaking a comprehensive review of the Darlot mining operations, with production and cost guidance for FY2022 to be provided in the September Quarter 2021.

“Red 5 continues to make excellent progress on the King of the Hills gold project, however we continue to face challenges at our Darlot gold mine,” Red 5 managing director Mark Williams said in the company’s ASX announcement.

“The difficulty of sourcing skilled labour for both Darlot and for our new Great Western mine has impacted our ability to achieve our FY21 production guidance.

“As previously announced, King of the Hills remains on schedule and budget and is expected to commence gold production in the June Quarter 2022.”

 

 

 

Email: info@red5limited.com

 

Web: www.red5limited.com

 

Red 5 Hits KOTH Milestones

THE BOURSE WHISPERER: Red 5 Limited (ASX: RED) achieved two major milestones in the development of the company’s 2.4 million ounces King of the Hills (KOTH) gold project in Western Australia.

Red 5 has had its KOTH Mining Proposal approved by the WA Department of Mines, Industry Regulation and Safety (DMIRS), being the final permit required for the restart of mining activities to proceed in 2022.

The company has also approved Phase 2 of the Engineering, Procurement & Construction (EPC) contract, allowing EPC contractor, MACA Interquip (ASX: MLD), to ramp-up the mobilisation of its construction teams.

“The KOTH construction and development teams are continuing to achieve solid progress, with the overall project under budget and on track to deliver first gold production on schedule by mid-2022,” Red 5 managing director Mark Williams said in the company’s ASX announcement.

“The manufacture and delivery to Australia of all key long-lead items for the plant is also well on track, which will help to ensure that key construction and installation milestones can be achieved once construction of the plant moves into full swing in the second half of this year.

“We are very encouraged by the important milestones being achieved, and we are looking forward to the next step-up in activities during the June 2021 Quarter as the key elements of this new large, long-life Australian gold mine continue to take shape.”

 

TO READ THE FULL ANNOUNCEMENT: CLICK HERE

 

Email: info@red5limited.com

 

Web: www.red5limited.com

 

Ardea Resources and Red 5 Limited Combine to Enhance Promising Gold Tenure

THE BOURSE WHISPERER: Ardea Resources (ASX: ARL) and Red 5 Limited (ASX: RED) have struck a Joint Venture Agreement in two of the former’s prospective gold exploration projects located in close proximity to the latter’s Darlot gold mine in the Eastern Goldfields region of Western Australia.

Adrea Resources declared the JV (ARL 20% / RED 80%) was part of its strategy to prioritise exploration and development work on the company’s Kalgoorlie Nickel Project (KNP) tenure.

For its part, Red 5 declared the Farm-in JV Agreement supports its multi-strand strategy to expand the Darlot Mineral Resource base, which includes regional ‘bolt-on’ acquisitions, such as the two prospects in question, in addition to comprehensive exploration being undertaken as part of the Darlot Mining Hub Strategy.

Red 5 can earn up to an 80 per cent interest in Ardea’s Mt Zephyr and Darlot East gold projects, through its 100 per cent-owned subsidiary, Darlot Mining Company Pty Ltd, that is required to spend $1.5 million within a 2-year period to earn an initial 60 per cent interest in the tenements.

Should this be achieved, Darlot may then elect to spend an additional $800,000 to earn an additional 20 per cent interest, for a total 80 per cent earned interest in the tenements.

Ardea is free carried by Darlot up to a Decision to Mine, after which it may elect to contribute pro-rata or dilute.

Should Ardea’s diluted interest falls below 10 per cent, it will convert to a 1.5 per cent Net Smelter Royalty (NSR).

The Mt Zephyr project covers an area of 900 square kilometres and is considered by Red 5 to represent an excellent gold discovery opportunity, located within 100 kilometres trucking distance from the Darlot Mill.

Mt Zephyr hosts several areas of known mineralisation, including the Dunn’s Find prospect (gold associated with Banded Iron Formation) and the Gale prospect (gold associated with granodiorite intrusion), which Red 5 considers to demonstrate early-stage similarities to its 4.1 million ounces King of the Hills (KOTH) gold deposit.

The Darlot East project comprises two Exploration Licences in an under-explored area located eight kilometres to the east of the Darlot Mine.

“Following the recent delivery of the Final Feasibility Study for the development of a bulk mining and processing operation at King of the Hills, Red 5’s growth vision is based on the establishment of two separate production hubs at KOTH and Darlot,” Red 5 managing director Mark Williams said in the company’s ASX announcement.

“This Joint Venture Farm-in Agreement with Ardea Resources provides an exciting opportunity for the discovery of gold resources within economic haulage distance of the Darlot processing plant, which is currently operating at one million tonnes per annum throughput.

“Ardea’s grassroots exploration programs have delineated a series of highly-prospective targets, including the high-priority Gale prospect, which shows interesting early-stage analogies to our 4.1 million ounces KOTH deposit.

“Red 5 now has a combined granted tenement footprint of 1,919 square kilometres in Western Australia’s Eastern Goldfields (including 423km2 under application), giving us a commanding position in this world-class gold district and an exceptionally strong growth pipeline of exploration projects.

“We are looking forward to getting on the ground to commence drilling and exploration programs at both the Mt Zephyr and East Darlot projects.”

 

TO READ THE FULL ARDEA RESOURCES ANNOUNCEMENT: CLICK HERE

TO READ THE FULL RED 5 LIMITED ANNOUNCEMENT: CLICK HERE

 

Email: ardea@ardearesources.com.au
Email: info@red5limited.com.au

 

Web: www.ardearesources.com.au
Web: www.red5limited.com.au

 

Red 5 Moves KOTH Feasibility Closer to Completion

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) reported its Final Feasibility Study (FFS) for the proposed stand-alone integrated bulk open pit and underground mining and processing operation at the company’s King of the Hills (KOTH) gold project in Western Australia is on schedule for completion in the September 2020 Quarter.

Red 5 is currently reviewing the design and costings for the Process Plant and other on-site infrastructure.

Mine planning studies are continuing with the final KOTH open pit, satellite deposits, underground mine designs and mine schedules expected to be finalised early in the September 2020 Quarter.

An updated KOTH Ore Reserve to follow is anticipated to form part of the Final Feasibility Study.

“We continue to systematically progress towards completion of the FFS, with mining and engineering studies well advanced and project approvals on schedule,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“Strong progress is being made with planning for site early works and ordering of long-lead items, with the delivery of a recently-purchased accommodation village and offices expected to coincide with the planned commencement of site early works in the second half of CY2020.

“Over the coming weeks we expect to complete our review of the designs and costings for the Process Plant and other on-site infrastructure, and finalise the tailings storage management report, while also progressing heritage surveys over key infrastructure corridors.

“The successful completion of these workstreams will put us on track to deliver the FFS on schedule in the September 2020 Quarter, marking a major milestone towards the development of one of Australia’s most exciting new gold development projects.”

 

Email: info@red5limited.com

Web: www.red5limited.com

 

Red 5 Exercises Acquisition Option Over Cables and Mission Deposits

THE BOURSE WHISPERER: Red 5 Limited (ASX: RED) has exercised an option to complete the acquisition of the Cables and Mission gold deposits in Western Australia.

Red 5 described the acquisition as strategic, given that the “bolt-on” deposits are located around ten kilometres north of the company’s Darlot gold mine.

Red 5 explained the acquisition forms part of a multi-strand strategy to expand the Darlot Mineral Resource base, which includes ongoing near-mine and regional exploration as well as consolidation of strategic opportunities.

Before completing the acquisition of the Cables and Mission deposits, Red 5 carried out due diligence and confirmatory Reverse Circulation (RC) drilling to validate historical drilling and determine the potential of the Cables and Mission deposits.

Confirmatory Reverse Circulation drilling by Red 5 confirmed the mineralisation with best intercepts of:

20MIRC0001
7 metres at 5.7 grams per tonne gold;

20MIRC0002
4m at 14.7g/t gold; and

20CBRC0003
5m at 3.7g/t gold.

The Cables and Mission transaction follows Red 5’s recently announced acquisition of the Great Western gold deposit.

“The acquisition of the Cables and Mission deposits represents another strategic low-risk opportunity to continue growing the company’s Resource base in the area surrounding the Darlot gold processing plant,” Red 5 managing director Mark Williams said in the company’s annooucnement to the Australian Securities Exchange.

“The acquisition includes a JORC 2004 Inferred Resource which we plan to upgrade to JORC 2012 compliance, while at the same time commencing exploration activities aimed at testing the broader potential of the tenements, which are located in close proximity to our existing Darlot operations.

“Significantly, the rock units hosting the Cables and Mission deposits are similar to those that host the Centenary orebody, which has been mined for many years from underground at Darlot.

“The Cables and Missions transaction follows the recent acquisition of the Great Western gold deposit, both of which are planned to provide additional sources of ore feed for the Darlot processing plant in the coming years.”

 

Email: info@red5limited.com

Web: www.red5limited.com

 

Red 5 Defines Satellite Resources at KOTH

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) announced maiden JORC 2012-compliant Mineral Resource estimates for the Cerebus-Eclipse and Centauri near-mine deposits at the company’s King of the Hills (KOTH) gold mine in Western Australia.

Red 5 have placed some importance on these satellite deposits within its proposed mining strategy for the KOTH project, as it considers they could hold potential to provide open pit mill feed and cash flow in the early stages of a proposed bulk mining operation.

The numbers stack up as follows:

Cerebus-Eclipse: Indicated and Inferred Resource of 2.8 million tonnes at 1.2 grams per tonne gold for 112,000 ounces; and

Centauri: Indicated and Inferred Resource of 1.7 million tonnes at 1.5g/t gold for 81,300 ounces.

Combined with previously reported Mineral Resource estimates for the near-mine Rainbow and Severn deposits in May 2019, the Cerebus-Eclipse and Centauri Mineral Resources bring the company’s total Satellite Open Pit Mineral Resource base at KOTH to approximately 308,200 ounces.

“Delivering strong Mineral Resources at both Centauri and Cerebus-Eclipse is another big step forward for our bulk mining strategy,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“These deposits have the potential to deliver early mill feed and cash flow from shallow open pits which can be accessed and developed relatively quickly during the early stages of bulk mining operations.

“In addition, we see the potential to continue to expand our Satellite Open Pit Resource inventory, with regional drilling underway to progressively test key targets – including at Cerebus-Eclipse and Centauri – each of which has the potential to yield further Resources.”

 

Email: info@red5limited.com

Web: www.red5limited.com

 

Red 5 Completes Great Western Acquisition

THE BOURSE WHISPERER: Red 5 Limited (ASX: RED), through its wholly-owned subsidiary, Darlot Mining Company Pty Ltd, has exercised an Option Agreement to acquire a 100 per cent-interest in Mining Lease M37/54.

The Mining Lease includes the Great Western gold deposit.

Red 5 has executed a Sale and Purchase Agreement (SPA) with the tenement holder, Terrain Minerals (ASX: TMX).

The company believes the acquisition supports its stated multi-strand strategy to expand the Darlot Mineral Resource base, which includes regional ‘bolt-on’ acquisitions in addition to aggressive exploration being undertaken as part of its Darlot Mining Hub Strategy.

The Great Western gold deposit is located 80 kilometres trucking distance south of Red 5’s Darlot processing plant, which is currently operating at one million tonnes per annum.

Red 5 considers the acquisition of the Great Western gold deposit and surrounding Mining Lease represented a high-quality strategic addition to its Mineral Resource base within trucking distance of the Darlot mill.

Terrain Minerals had previously completed a JORC 2012-compliant Mineral Resource estimate for the Great Western deposit totalling 709,000 tonnes at an average grade of 2.7 grasm per tonne gold for 62,000 ounces of contained gold.

“Having completed the due diligence drilling, we believe the Great Western deposit represents a highly prospective addition to our Darlot Mining Hub Strategy, with an existing 62,000 ounce Mineral Resource and exploration upside, particularly at depth,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“With an acquisition cost of $40 per Resource ounce, it boosts our Mineral Resource base within economic trucking distance of the Darlot mill.

“We will continue to seek further such opportunities – both through our exploration programs as well as through strategic acquisitions – with the aim of establishing five to ten years of Ore Reserves either at or within trucking distance of the Darlot mill as part of the company’s Darlot Mining Hub Strategy.”

 

Email: info@red5limited.com

Web: www.red5limited.com

 

Red 5 Completes $125M Raising to De-Risk KOTH

THE BOURSE WHISPERER: Red 5 Limited (ASX: RED) bucked recent trends by announcing a $125 million share placement to sophisticated and professional investors.

Red 5 made the placement at a price of 18 cents per share, saying that it would underpin the company’s next pivotal phase of its growth pathway to becoming a multi-asset, mid-tier Australian gold producer.

Red 5 declared the Placement de-risks the funding requirements to develop the proposed integrated bulk open pit and underground mining and processing operation for the King Of The Hills (KOTH) gold project in Western Australia, where a Final Feasibility Study is due for completion in the September 2020 Quarter.

“We are delighted with the strong support received from existing and new investors, particularly given the current challenging equity market environment,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“In particular, I would like to thank our existing shareholders for their ongoing support and welcome a number of new institutional investors to our register.

“This strong outcome reflects the market’s confidence in the growth pathway we have mapped out, which will see Red 5 evolve into a multi-asset, mid-tier gold producer over the next two years.

“The capital raising significantly de-risks our funding requirements at King of the Hills, which is now well established as one of Australia’s premier emerging gold projects.”

 

Email: info@red5limited.com

Web: www. red5limited.com

 

Red 5 Makes Progress on KOTH FFS

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) made sure everybody remains up to speed with progress of the Final Feasibility Study (FFS) that is underway at the company’s King of the Hills (KOTH) gold project in Western Australia.

Red 5 declared it has made substantial progress across all workstreams to facilitate the completion of the FFS, which is due in the September 2020 Quarter is for the proposed stand-alone integrated bulk open pit and underground mining and processing operation at King of the Hills.

The company explained that results from assaying of some 32,000 metres of historical diamond drilling core, together with results from ongoing underground drilling programs, will underpin the completion of an update to the current 3.1 million ounces Mineral Resource estimate for KOTH.

This update is now expected to be delivered earlier than forecast and reported this month.

“We have completed a significant amount of work already, with the next major deliverable to be an update to the current 3.11 million ounce Mineral Resource estimate, which we expect to be able to report this month,” Red 5 managing director Mark Williams said in the company’s announcement to the Australian Securities Exchange.

“The Resource model will enable us to finalise mine planning and the completion of an updated bulk open pit and underground Ore Reserve for King of the Hills.

“We are delighted to have appointed an experienced Construction Manager who will join the team later this month.

“We are also close to finalising the infrastructure and site layout, with results from sterilisation drilling expected shortly.

“A clear pathway for project approvals has been defined with no significant hurdles expected given this is a brownfields mine development with a long operating history.

“Collectively, these programs put us well on track to complete the Final Feasibility Study for the integrated bulk open pit and underground mining operation in the September Quarter 2020.”

 

Email: info@red5limited.com

Web: www.red5limited.com

 

THE DAILY ROADHOUSE

 

Ramelius Resources Makes Move on Spectrum Metals

THE BOURSE WHISPERER: Ramelius Resources (ASX: RMS) and Spectrum Metals (ASX: SPX) have struck a Bid Implementation Agreement (BIA) that will result in Ramelius offering to acquire all of the issued and outstanding ordinary shares in Spectrum that it does not already own.

Red 5 Increases Darlot Reserve and Resource Estimates

THE DRILL SERGEANT: Red 5 Limited (ASX: RED) updated the JORC Code 2012-compliant Ore Reserve and Mineral Resource estimates for the company’s Darlot gold mine in Western Australia.