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Kaiser Reef Limited’s (ASX:KAU) A1 operations transitioning to owner operatorship, Decline development commenced

Summary

  • Kaiser has terminated the hire agreement for the mining fleet and purchased equipment to facilitate the owner operatorship transition.
  • The first cut for decline development has been made at the Queens Lode.
  • Kaiser intends to ramp up the production in the medium term via the commencement of mining operations at the advanced exploration targets at Queens Lode.

ASX listed gold producer Kaiser Reef Limited (ASX:KAU) shared an upbeat operational update for the premium A1 gold mine.

Since the DOCA was effectuated in late January, the company has terminated the contract for hiring equipment and moved to a wholly owned mining fleet. This move with substantially reduce the company’s ongoing operating costs. Kaiser has now commenced the decline development to access the Queens Lode as part of its effort to ramp up the operations.

Must Read: Kaiser Reef Limited (ASX:KAU) committed to ramping up gold production and exploration at Victorian assets

The gold operations had resumed operations in January this year. Kaiser intends to ramp up the production in the medium term via the commencement of mining operations at the advanced exploration targets at Queens Lode.

Twin Boom Jumbo at A1 operations Source: Kaiser Reef company announcement 27 April 2021

Recently, Kaiser announced the discovery of fresh high grade gold mineralisation at Queens Lode prospect during the underground drilling program. The gold grades of up to 67 g/t were intersected during the latest drilling program.

Must Read: Kaiser Reef Limited (ASX:KAU) committed to ramping up gold production and exploration at Victorian assets

Transition towards Owner Operatorship

The company has terminated the hire agreement for the mining fleet to take over the full ownership of the mining equipment in an effort to optimise the A1 operations. Kaiser intends to lower operating cost and secures modern mechanised mining equipment for mining operations at Queens Lode in the upcoming months.

Read Here: Kaiser Reef Limited (ASX:KAU) Story, next leg of growth at A1 gold mine

Underground Loader Source: Kaiser Reef company announcement 27 April 2021

The equipment purchased will facilitate the owner operatorship transition and includes a Caterpillar R1300 Underground Loader, 2 Elphinstone R1700 Underground Loader, an Elphinstone R1700 Underground Loader, a Jumbo Twin Boom Drill and a Kempi Diamond Drill.

Decline Development Begins at Queens Lode

Further, the gold producer updated that the first cut for decline development has been made at the Queens Lode. The infill drilling program has signalled presence of wides lodes of mineralisation open at depth and to the South. Previously, this style of mineralisation has been mined and suggest a larger source of ore than the currently mined narrow-vein lodes.

Important Read: Kaiser Reef (ASX:KAU) Sailing Smoothly With Significant Results from Initial Programs

Coring samples from the drill hole (#417) displaying intense alteration of diorite host with quartz veins Source: Kaiser Reef Company Announcement 26 March 2021

In December 2020, prior to the transfer of ownership to Kaiser in January, the company began an underground drilling campaign. On 26 March 2021, the drilling programme announced positive assay results including –

A1UDH-419:

  • 7.4m with 6.04 g/t Au from 18m
  • 21.0m with 5.03 g/t Au including 8.5m with 9.26 g/t Au from 58m

A1UDH-417:

  • 7.4m with 3.60 g/t Au from 13.7m

A1UDH-413 (not at Queens Lode):

  • 0.6m at 67.9 g/t Au from 13.5m

The mineralogy at Queens Lode is thicker and is hosted within intense mineralisation amenable to mechanical mining styles. The initial results of the Queens Lode drilling are positive and hold the potential to achieve higher output at A1 gold operations.

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