PERTH (miningweekly.com) – The share price of gold miner Red 5 slid by more than 11% on Tuesday as the company amended its production guidance for the March quarter following operational issues at the Darlot mill, in Western Australia.

Red 5 on Tuesday lowered its March quarter production to between 12 000 oz and 15 000 oz, from an initial guidance of between 16 000 oz and 19 000 oz, on the back of issues relating to the gear and clutch on Mill 1 at the Darlot mill.

During the three months to December, the Darlot mill delivered 17 777 oz of gold.

The Darlot gold mine, which Red 5 acquired in October last year, sold 16 150 oz of gold during the December quarter, at an all-in sustaining cost of A$1 291/oz. The miner on Tuesday reported a revenue of A$37.4-million during the quarter under review, with net loss after tax for the period reaching A$2.4-million, compared with a loss of A$72.2-million in the previous corresponding period.

“We are encouraged by the performance of the Darlot operation and confident in our Eastern Goldfields consolidation strategy to maximise throughput at the Darlot mill by processing ore from both the Darlot and King of the Hills underground mining operations,” said MD Mark Williams.

Development activities at the King of the Hills underground mine started in January this year.

Williams said that Stage 2 of the consolidation strategy would centre on increasing the company’s reserve and resource base in the Eastern Goldfields through regional exploration within the 25 700 ha tenement footprint acquired with the Darlot and King of the Hill transactions, as well as assessing additional business development opportunities which the company was executing.

Red 5 would continue to pursue other acquisition opportunities in the areas around its core assets, Williams said, while also advancing permitting approvals for its Siana gold project, in the Philippines.

Red 5 shares traded at a low of 5.6c a share on Tuesday, down from an opening price of 6.8c a share.