The company’s new chief operating officer, Richard Hay, said there had been significant COVID-19 absenteeism between June and August, impacting mining rates and grade, but Red 5 had worked with Macmahon Contracting to deliver a catch-up plan.
“As a result, we have already recovered most of the lost ground,” Hay said.
The mill also suffered equipment failures, requiring a shutdown in September to reconfigure the SAG mill to process an increasingly hard ore feed, but despite those issues the plant has operated at annualised rates above its nameplate 4.7 million tonnes per annum.
Outgoing COO Jason Greive said the mill was tracking well compared to other facilities’ ramp-up experiences, and he expects that once debottlenecking is complete it may be able to operate around 5.5Mtpa.
Work will then look towards expansion, with Red 5 claiming its processing costs of $12.50/t make it one to the most competitive mills in the Leonora region of Western Australia.
The mill is a strategic asset that could help Red 5 play the role of kingmaker in the current Game of Thrones-style manoeuvring as players in the region seek to consolidate ground and increase gold resources.
Its three mines at Darlot and KOTH are now operating at capacity, and the KOTH open pit is reconciling well to reserve models, Hay said.
Production for the September quarter was 26,700 ounces, up from 18,586oz in the June quarter.
The new mill poured its first gold on June 5.
Costs will be reported once commercial production rates are achieved.
Red 5 ended the quarter with debts of A$175 million, cash and bullion of $38 million, inclusive of $16 million allocated to reserve accounts and bond guarantees.
A $66 million capital raise is in the final stages to fund the ramp-up and growth options for its 6.6Moz of resources.
While the KOTH open pit has a mine life out to at least 2037, the KOTH underground has just five years of visibility, limited by drilling.
