JOHANNESBURG (miningweekly.com) - Australian gold producer Red 5 reported a strong first quarter, producing 17 777 oz in the three months to December 31, 2017, paired with sales of 16 150 oz from its recently acquired Darlot mining operation, in Western Australia.

All-in sustaining cost for the quarter was A$1 291/oz.

The ASX-listed miner said on Wednesday that it expected even further growth in the year ahead, underpinned by the acquisition of the 131 000 oz Darlot mine from South Africa's Gold Fields in October last year.

"Encouraging results from the remnant mining programme in the upper and mid-levels of the mine, with stopes in the first three extensions to existing mining areas exceeding expectations in terms of mined tonnages and grade," the company said in a statement.

The Darlot processing plant also delivered strong performance, with periods of throughput reaching up to 100 t/h and opportunities identified to increase capacity.

Meanwhile, Red 5 reported that the first stockpiled ore from the King of the Hills (KoTH) gold project, in Western Australia, was successfully trucked and milled at Darlot.

An underground mining contract awarded to experienced underground mining contractor, Pit N Portal Mining Services, and underground mining started in early January following receipt of mining approvals.

Initial results from heap leach amenability testwork on lower grade ores showed potential for a longer-term growth project at KoTH which would be pursued this year.

A Joint Ore Reserves Committee-compliant maiden mineral resource estimate has also been completed for Darlot, delivering a significant increase in contained gold ounces over the previously reported Samrec estimates, with measured, indicated and inferred mineral resource of six-million tonnes at 4.6 g/t gold for 895 000 oz of contained gold.

The resource includes a maiden probable ore reserve of one-million tonnes at 4.0 g/t gold for 131 000 oz of contained gold, delivering additional mine life for the Darlot mining operations.

Multi-pronged exploration and resource definition programmes started post quarter end at Darlot and KoTH to further expand and de-risk the resource and reserve base, with numerous high-priority targets identified, including targeting immediate extensions of the CDA Oval deposit immediately along strike of and below current workings.

Grade and resource drilling also started in January at KoTH with drilling initially targeting the northern section of the mine.

Gold production for calendar year is expected to be in the range of 85 000 oz to 95 000 oz.