Red 5 announced the commencement of Bulk Mining at KOTH; Increased Production expected

  • Mar 29, 2019 AEDT
  • Team Kalkine
Red 5 announced the commencement of Bulk Mining at KOTH; Increased Production expected

An Australian gold producer, Red 5 Limited (ASX: RED) notified the market on 29 March 2019, that bulk underground mining has begun at its wholly owned King of the Hills (KOTH) gold mine, situated in the Eastern Goldfields area of Western Australia.

The Bulk mining work is anticipated to give an increased result of ore production, in combination with enhanced operational efficiencies and lesser operating costs across the upcoming 12-15 months.

The company is seizing the opportunity to exploit the new selective bulk mining stopes, which is anticipated to underpin ore production from KOTH within Red 5’s present Truck-to-Darlot business model, for the balance of FY19 and FY20. It confirms a solid production outlook for the mine, while RED concludes the current strategic review of a potential broader bulk mining opportunity.

The beginning of bulk underground mining comes after the successful mining at Lemonwood trial bulk stope in 2018. It delivered 31,778t at an average mined grade of 3.35g/t Au, and the recently concluded W4975 bulk stope (19,989t at 4.5g/t Au mined). Both stopes experienced minimal dilution resulting from stable, competent ground conditions.

Underground Bulk mining Strategy:

As per the company’s recent announcements on ASX, assay outcomes from the continued 30,000m underground diamond drill program at KOTH, have allowed the mining team at KOTH to increase the bulk stope designs, under the existing Truck-to-Darlot mine plan, in addition to validating and upgrading of the previously announced 1.88Moz bulk mining resource by RED.

The recently mined and proposed new bulk open stopes are in the north-eastern sector of the mine, with their location relative to existing underground workings. It recently reported about the drill-holes completed as part of the current 30,000m underground drilling program.

The bulk stopes, which have been designed using a +2.5g/t cut-off grade as part of the present Truck-to-Darlot business model, range in size from 30,000-80,000 tonnes and will underpin planned production of between 30,000-35,000 tonnes per month, supplemented by 15,000-20,000 tonnes per month from high-grade narrow vein stopes and development ore.

The bulk stopes will be mined utilising the existing mine fleet currently on-site at KOTH, with the increased tonnages mined arising from the improved efficiencies of bulk mining. Larger sized ore drives can be mined without the dilution that exists for narrow vein mining, allowing the larger loaders from the existing mining fleet to be used for stoping.

The increased efficiencies and economies of scale realised through the implementation of this underground bulk mine plan are expected to result in several cost savings.

With KOTH production targeting 600ktpa, initiatives are being evaluated to assess the benefits of whether to incrementally expand plant capacity at the Darlot processing plant (presently 1Mtpa with 600ktpa coming from Darlot) or focus on maximizing grade recoveries, subject to cost/benefit analysis.

Mr Mark Williams, Managing Director, RED said that the bulk underground mining strategy at KOTH denoted a significant component in the Company’s overall plan to unlock the broader value of the project.

The stock of the company closed at A$0.145 and was up by 3.571% as compared to its previous day’s close (as on 29 March 2019).


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