PERTH (miningweekly.com) – Gold miner Red 5 has warned that production targets for both the June quarter and the 2020 financial year will be missed following a recent crusher breakdown at its Darlot processing plant, in Western Australia.
The ASX-listed company on Wednesday said that while the processing plant had consistently operated above design capacity, the recent crusher breakdown had resulted in some 3 200 oz of lost production.
Along with the lower-than-forecast average mining grades achieved at Darlot, the breakdown would result in production during the June quarter reaching around 21 000 oz, compared with the previous guidance of between 26 000 oz and 30 000 oz.
For the full year, production is expected to reach around 93 000 oz, compared with the targeted 98 000 oz to 102 000 oz.
Meanwhile, Red 5 on Wednesday said that with the recent acquisition of satellite tenements, in particular the mine-ready Great Western project in April this year, the company has reviewed the truck-to-Darlot business model.
The decision has been taken to start openpit mining at Greater Western from the December quarter of this year, and progressively scale back and suspend underground ore production from the King of the Hills mine in the second half of the 2020 calendar year.
The suspension of the underground production would coincide with the planned start of site construction for the proposed bulk mining operation at King of the Hills, and would preserve shallow underground ore reserves for the proposed new four-million-tonne-a-year standalone mill.
Red 5 said that any underground development at King of the Hills that continues into the 2021 calendar year, would be focused on developing the mine for the planned new bulk mining operation.
“The decision to commence openpit mining at Great Western and scale down underground mining at King of the Hills during the second half of 2020 is consistent with our previously articulated growth vision of establishing a major new production hub at King of the Hills and developing an expanded long-life mining and processing hub at Darlot,” said MD Mark Williams.
“While we are disappointed that Darlot production has again been impacted in the short term, we are confident that the measures implemented will stabilise production and improve predictability to put us on track to achieve our 2021 forecast.
“This transitional production strategy is a critical step towards establishing two independent long life production hubs in the Eastern Goldfields as the foundation for a significant midtier Australian gold producer,” Williams said.
A final feasibility study for King of the Hills remains on track for the September quarter.