Kaiser Reef has continued its strong performance at the Henty gold mine in Tasmania, generating $14.28 million in net cash from operating activities during the March quarter. The company’s cash balance increased by over 5 per cent to $45.6 million by the end of the period.
Gold price surge boosts revenue
The company has capitalised on the rising gold price, which has surged more than 40 per cent year-on-year to approximately US$4,600 (A$6,420) per ounce. Kaiser reported underlying cash flow of $7.9 million for the quarter, driven by gold sales exceeding $35 million. A total of 5,561 ounces were sold from its two operations at an average realised price of $6,296 per ounce in local currency.
The March results follow a record December quarter, which saw $48.45 million in gold sales and $24.35 million in cash from operating activities. While December’s performance was boosted by a gold price near US$5,600 (A$7,800) and high-grade mining, the March figures are considered more normalised for the current production profile.
Production details
Gold production for the quarter totalled 5,534 ounces, down from December’s record of 6,526 ounces. Henty contributed 5,188 ounces, while the Victorian Maldon operation produced 346 ounces. Henty’s output was slightly below expectations due to softer stoping grades late in the quarter, but management has implemented corrective measures and expects a rebound in the June period.
The company also produced 4,810 ounces of silver, valued at US$74 per ounce.
Financial and operational highlights
Kaiser closed out call options to gain full exposure to the gold price, repaid debt, reinvested in the business, and grew its cash balance by $2.5 million during the quarter. Managing Director Brad Valiukas noted that a second shift at Maldon is about to commence, effectively doubling throughput, with the operation expected to become near self-funding, including exploration costs.
The Maldon region is considered significantly underexplored, having historically produced 1.75 million ounces of gold at an average grade of 28 grams per tonne (g/t).
Fully unhedged position
Kaiser delivered its last gold delivery under a capped price of A$5,300 per ounce, leaving the company fully unhedged. This provides greater leverage to the prevailing spot price, which is expected to remain strong, potentially accelerating positive cash flow.
Maldon developments
At Maldon, refurbishment of the decline has progressed, with underground works set to begin in early May. Additional activities include resistivity surveys to map historical workings, permitting and drilling at the Nuggetty and Nuggetty South prospects, and plans for airborne magnetic and radiometric surveys in the July quarter.
The Union Hill stockpile at Maldon contains 566,000 tonnes grading 0.48 g/t for 8,649 ounces of gold. The company plans to process approximately 10,000 tonnes per month at its Porcupine Flat facility until 2030 to supplement Henty production.
Henty mine resource and reserve
Henty processed 62,260 tonnes grading 2.94 g/t gold, with gold recovery of 88.2 per cent. The underground mine has a mineral resource of 4.11 million tonnes grading 3.32 g/t gold for 438,000 ounces, and a mineral reserve of 1.89 million tonnes at 3.28 g/t gold for 199,000 ounces. Although initially slated for a five-year mine life, the mine continues to extend its outlook.
Kaiser’s two-pronged, two-state gold production strategy positions the company for continued success.
