Red 5 on track for 2022 production

Goldminer Red 5 says it has completed more than half of the construction work required for its $226 million King of the Hills project in WA, where production is on track for mid-next year.

The 2.4-million-ounce KOTH project, located north of Leonora, is expected to add about 176,000oz to Red 5’s total annual production for the first six years of operations.

Red 5, which operates the nearby Darlot goldmine, produced 76,104oz in the year to June 30, in line with guidance.

The company today announced it had completed more than 50 per cent of the KOTH project, within budget, while confirming first gold pour for the June quarter of 2022.

The update comes about a week after Red 5 revised its production plan for WA, with ore to be processed from KOTH instead of at the Darlot hub (as per the company’s original operating strategy).

Mark Williams-led Red 5 expects KOTH will be a low-cost production centre, with processing costs forecast to be $11.83 per tonne.

Recently, the company finalised a $650 million contract with ASX-listed Macmahon Holdings, which will complete open pit and underground mining works at KOTH for an initial five-year period.

Red 5 acquired the project from Saracen Mineral Holdings in 2017. It completed a final feasibility study for a standalone bulk mining and processing operation in September last year.

Shares in Red 5 were down 2.6 per cent at 2:11pm AEST to trade at 18 cents.