Downes said the company has a strong pipeline of exploration and development opportunities, a solid balance sheet and is well positioned to capitalise on the surging gold price.
The gold price has been running rampant on a relentless charge towards US$4000 (A$6063) per ounce, touching an all-time high today in excess of US$3900 (A$5911).
Kaiser says the 8115-ounce gold stash produced last quarter came from 68,675 dry tonnes processed and a solid 89.1 per cent recovery rate.
The company is seeking to ramp-up numbers at Henty even more, with plant modifications mostly completed, an upgrade to tailings detoxification capacity and it will shortly begin increased throughput trials. Additional crushing capacity has been installed.
Management has been working to boost its mineral resources and reserves at Henty, with details expected later this month.
Henty has a current mineral resource of 4.1 million tonnes grading 3.4g/t gold for 449,000 ounces. This is supported by current ore reserves of 1.2Mt going 4g/t for 154,000 ounces of gold.
The mine’s historical production is 1.4 million ounces at a stellar 8.9g/t gold.
Kaiser acquired the potential company-making Henty project by agreeing to pay ASX-listed $2b market capped Catalyst Metals $15 million in cash and $16.6 million in shares, handing Catalyst a maximum 19.99 per cent stake in Kaiser.
After being in control of the operation for six months, Kaiser will further pay Catalyst 50 ounces of gold per month, capped at 3000 ounces and a 0.5 per cent royalty on gold produced from the Darwin Target Zone.
Acquiring Henty has been a winner for Kaiser, which pulled in more than $10.1 million in free cash flows in the June quarter, boosting its bank balance to an impressive $24.7 million at the end of June. In July it grew to more than $28 million cash at bank.
Notably, the company only took hold of the control levers at Henty on May 15.
Management has several options available to it due to the strong cashflow position it finds itself in. Debt reduction, share buybacks and the payment of dividends are all potential options. It says no decisions have been made on any potential action at this point.
Kaiser and Catalyst have also forged an agreement for a 50/50 joint venture at Kaiser’s Maldon processing plant, providing both companies with an opportunity to lift production ounces.
The JV allows for Catalyst to co-develop the plant, which is strategically placed between Victoria’s gold-rich regions around Bendigo and Ballarat.
Increasing the capacity of the Maldon plant could fire up both firms’ processing plans, allowing Kaiser to feed gold-bearing ore from its Maldon project, should it prove up sufficient ounces.
Meanwhile, Catalyst could send material into the plant from its Four Eagles project north of Bendigo, which has 70,000 ounces of gold at an astonishing 26 g/t at its Boyd’s Dam deposit.
With the gold price roaring along and no end in sight yet, coupled with a beefed up Henty plant and valuable experience gained from a few months of mining, Kaiser might be about to hit its straps now.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
