Speaking this morning, managing director Mark Williams said while the company had seen the “normal array of commissioning issues”, there was nothing unexpected.
“It has generally been quite smooth, and we are processing 550-580 tonnes per hour on a regular basis,” he said.
Recoveries and grades have been in line with expectations, and the power draw has been less than anticipated.
As the mill settles into steady state later this year the company is aiming to start improving the A$226 million development.
Chief operating officer Jason Greive said for the mill to reach its nameplate 4.7Mtpa rate it needed to regularly see daily processing rates above 13,500tpd.
“We are seeing that more frequently at the moment, and we have had whole days exceeding 14,000tpd, suggesting throughput of 5Mtpa,” he said.
“Given the moderate loads and power draw, and the fact we haven’t fully utilised the pebble crusher, there are a huge number of leavers can pull to get processing rates even higher.”
The front end of the plant, the mining contracts, mine plan, and fleet, were designed to be scaled upwards to between 6-7Mtpa.
Studies are about to begin to examine the lowest cost means of achieving that, starting with investments to debottleneck areas of the wet plant.
In terms of the underground mine development, Williams said it was progressing “quite well”, with the first stope fired last month.
“Where (contractor) Macmahon is challenged is in the other support labour, such as load and haul,” he said.
Staffing issues are notable across the Australian mining sector.
Greive said the company had the deposits to support a mix of open pit and underground operations for more than a decade, and was hopeful of getting to the 6Mtpa run rate fairly quickly.
Once it starts generating cash it will be able to invest more in regional exploration, with an early focus on targets in the Darlot tenements to the north and in the low-hanging fruit in the underground.
“We are well blessed with organic pipeline for many years to come,” Williams said.
Red 5 poured its first new bar at KOTH on June 5, declaring that the operation had been delivered on time and on budget. The older Darlot mill will now be suspended, and the high-grade ore trucked south for blending.
Quarterly production was reported at an improved 18,586oz at all-in sustaining costs of A$2153/oz.
Full year production was 64,667oz at $2479, within guidance of 62,000-72,000oz at $2400-2500.
Guidance for FY23 will be set once KOTH achieves steady state. A significant ROM stockpile has been built up to ensure the mill is never hungry.
Red 5 ended the June quarter with cash and bullion of $55.6 million and debt of $175 million.
Shares in the miner were off 6% this morning at 23c, valuing it at $577 million.
