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Profitable gold producer, Kaiser Reef, has used the strong gold price to flick the switch on growth, unveiling a clear-eyed strategy to lift gold production, extend mine life and unlock district-scale upside across the company’s Henty mine in Tasmania and its Victorian operations at Maldon.
The company’s plans centre on squeezing more ounces out of existing infrastructure while methodically rebuilding exploration momentum in some of Australia’s most storied goldfields. Crucially, Kaiser says all of the work will be funded from operating cash flow.
At its flagship Henty gold mine in Tasmania, the company plans to boost its production run rate by 16 per cent to 35,000 ounces from 2027 onwards on the back of plant optimisation and ore access. The high-grade mine currently has a resource of 4.1 million tonnes grading 3.3 grams per tonne gold for 438,000 ounces of gold.
The mine was initially projected to have a five-year lifespan but has continued to operate, producing over 1.3 million ounces of gold since its opening in 1996.
‘Kaiser has transformed, over the last nine months, into a profitable gold miner.’
Kaiser Reefs managing director Brad Valiukas
Notably, despite a lengthy history of ownership changes, exploration potential still remains excellent, with new lodes and extensions regularly discovered.
Trending south-westward, the prospective six-kilometre-long mineralised corridor contains old workings such as the Tyndall copper mine and the Lake Newton alteration zone.
Kaiser Reefs managing director Brad Valiukas said: “Kaiser has transformed, over the last nine months, into a profitable gold miner with a robust balance sheet and a strong pipeline of exploration and development opportunities. We are well- positioned to both capitalise on a strong gold price and add significant further value to our assets with targeted investment.”
At its Maldon gold project in Victoria, Kaiser says it is pursuing a dual strategy of increasing production from low-grade stockpiles and opening the Union Hill underground mine, while advancing its district-scale exploration program by pinpointing new priority drill targets.
The high-grade project comes with its own 200,000 tonnes per annum fully operational gold processing facility and boasts historical production of 1.75 million ounces of gold at a remarkable 28g/t.
Other work will include re-establishing the utilities at Union Hill, enabling the company to zero in on drill positions for an underground ore definition program in the September quarter. Although the Union Hill mine is currently on care and maintenance, it still hosts a resource of 186,000 ounces grading 4.4g/t gold.
Recent diamond drilling intersected several standout hits, including 5.8m grading 5.37g/t gold from 39m, 6.9m running at 6.05g/t gold from 30m and 8.6m going 4.99g/t gold from 18.4m.
The drilling successfully demonstrated grade continuity, delineated mineralisation in unmined portions of the pit and confirmed the presence of high-grade spur veins.
Kaiser Reef has also been turning old gold waste dumps near its Union Hill mine into cash. Trial processing of 3567 tonnes of dump material averaged 1.6 grams per tonne (g/t) gold, with the company achieving a recovery rate of 90 per cent. This is a big improvement on its earlier trial sampling of 2628 tonnes, which returned a grade of 0.86g/t, suggesting there may be plenty more reprocessing upside.
For now, Kaiser’s jewel in the crown is the very profitable Henty gold mine. With cash to finally conduct meaningful exploration across its two operations, the company appears well-positioned to add more ounces to its already impressive portfolio of assets.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au