Kaiser revealed yesterday that its first full quarter of mining operations at its now-flagship Henty mine pumped out a solid 8115 ounces of gold at an impressive grade of 4.12 grams per tonne (g/t).
The company delivered on its stated goal to generate an annual run-rate of 30,000 ounces of gold, or 7500 ounces for the quarter.
Kaiser plans to eventually serve up 50,000 ounces of gold per annum from its Tasmanian and Maldon, Victorian operations combined. To bolster its steps towards that production number, the company kicked-into further drilling in Victoria in September, with results due this month.
Management is targeting zones under the historic Union Hill open pit to beef-up a sufficient resource to move into development mode. The Maldon project contains multiple historic underground mines, including Union Hill, which is fully permitted and sitting in care and maintenance mode.
The Maldon gold project is joined at the hip with an operating 200,000 tonnes per annum processing plant, potentially providing Kaiser Reef with yet another walk up production opportunity.
The company scooped up the profitable underground gold mine from $2 billion ASX-listed Catalyst Metals, agreeing to pay Catalyst $15 million in cash and $16.6 million in shares, handing Catalyst a maximum 19.99 per cent stake in the junior goldie.
Kaiser bankrolled the deal to pick up Henty with a successful $30M share placement. It also jumped on a $10M funding package from Auramet International and with the positive cashflow it’s generating, appears to be well-placed for working capital.
Since the acquisition, the company has made a $1 million loan repayment to one of its funders, Auramet International, and paid $800,000 in Auramet establishment fees and costs for the purchase of put options.
The put options purchase was a requirement to secure its debt facility with Auramet and has been fully paid, with the benefit of locking-in a guaranteed minimum price of $4400 per gold ounce.
Kaiser executed put options to cover 6000 ounces of gold, consisting of 750 ounces per month across eight months at $4400 per ounce. The 750 ounces represent about one-third of the company’s targeted monthly production of 2500 ounces, providing for a strong and prudent price protection instrument.
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.
Kaiser and Catalyst have forged an agreement for a 50/50 joint venture at the 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.
Henty has a current mineral resource of 4.1 million tonnes grading 3.4g/t gold for 449,000 ounces and 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 strong grade of 8.9g/t gold.
The gold price is continuing to run rampant, hurtling towards a US$4000 (A$6063) per ounce level. It touched an all-time high of near US$3970 (A$6008) in recent hours.
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