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Craig Nolan
Kaiser Reef has waved off its final delivery-capped gold at a pre-arranged price of A$5300 per ounce and is now in the enviable position of being fully leveraged to the spot price for future production.
Having agreed to purchase the underground Henty Gold Mine in Tasmania in May of last year, the now-wildly cash-flow-positive mine was first secured with the assistance of funder Auramet International, along with a $30 million capital raise.
Auramet stepped up to the plate to cough up $10 million via a mix of secured and unsecured financing, including a monthly agreement to provide 1000 gold-ounce call options at an exercise price of A$5300 per ounce, delivered to Auramet for a period of six months.
This helped Kaiser retain a strong working capital position, allowing it to roll up its sleeves and launch into plans to ramp up full-throttle production at Henty.
With the final 1000-ounce parcel delivered to Auramet at the end of February, the company has now regained full exposure to the unhedged gold price, which currently sits at a whopping A$7570 (US$5350) per golden ounce.
‘Following the completion of the Henty acquisition in May 2025, Kaiser has transformed into a profitable gold miner.’
Kaiser Reef managing director Brad Valiukas
Kaiser has also trimmed its gold loan to just 832 ounces, with eight monthly repayments of 104 ounces set to fully extinguish the liability by the end of October.
The company’s decision to secure the underperforming Tassie underground gold mine has been a strategically brilliant move, with cash flow from production providing a solid boost to its bank account and overall financing position.
Kaiser’s latest quarterly report for December highlighted a significant cash balance increase of $13.7 million, even after allowing for a $3.3 million impact from the sale of gold at the reduced price of A$5300 per ounce, per the capped price arrangement.
Kaiser Reef managing director Brad Valiukas said: “Following the completion of the Henty acquisition in May 2025, Kaiser has transformed into a profitable gold miner with a robust balance sheet and a strong pipeline of exploration and development opportunities.”
Valiukas said Auramet’s support at the time of the acquisition saved significant equity dilution and with the final delivery of call options, the company is in a strong position to further strengthen the balance sheet.
The company revealed last month it plans to use its ongoing cash haul to bump up production at Henty by 16 per cent to deliver an impressive 35,000 gold ounces from 2027, optimising plant output and accessing high-grade ore by opening up additional stopes.
Henty’s underground mine has an existing mineral resource of 4.11 million tonnes grading 3.32 grams per tonne (g/t) gold for 438,000 ounces. It holds a mineral reserve of 1.89 million tonnes at 3.28g/t gold for 199,000 ounces.
Although the mine was initially slated to have a five-year mine life, it has continually blown projections out of the water, producing an impressive 1.3 million ounces of the precious yellow metal since 1996.
Kaiser also plans to kick its Victorian Maldon operation back into gear, re-opening its Union Hill underground mine and processing low-grade stockpiles. An expected boost to production ounces is also expected from processing gold from old dumps sitting near the Union Hill mine.
Trial processing of the waste achieved 90 per cent recoveries, with an average of 1.6g/t gold from a sizeable ore sample of 3,567 tonnes.
The Maldon project comes complete with its own 200,000 tonnes per annum fully operational gold processing facility to handle the incoming loads.
Notably, historical production from the project has pumped out a stunning 28g/t gold.
With plans back on the table for a two-pronged approach to maximise the production of gold ounces, Kaiser appears to have a solid one-two punch combination at its disposal, with its high-grade Tassie and Victorian operations ready to pump out the gold.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
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